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January 14, 2009

"Media sector is set for consolidation "

Outlook Business has an interview with
Puneet Goenka, CEO of Zee Entertainment Enterprise.
I don’t expect anybody to fold up, but consolidation will definitely happen. Some may band together, while others may go to new owners. All those who are conscious about spends will definitely survive. The newer players face greater risks as they’re also under pressure to perform.

...Zee is the most profitable media company in all of Asia. That is because we concentrate on revenues as much as we do on spends. In fact, our dependence on advertising revenues is significantly lower than most other media companies. Almost 60% of our revenues come from our distribution business, which includes cable, DTH and international markets (subscription-based).

...Historically, Zee has always been a cost-conscious company. Our priority today is to find ways to squeeze more revenues. The cheapest source of entertainment during a recession is television. Instances from the past prove that TV viewing has always seen an increase in a depressed market. Going by that logic, I am hopeful that the distribution side of our business will grow 25% in the coming year and will compensate for the drop in advertising revenues. Our international distribution business will grow by at least 10-12% in the coming year.


Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports. Email the author at arun@ventureintelligence.in