The Pay TV market has seen an erosion of 4.6 million households in the last 12-15 months due to consumers migrating to free-to-air services, said Zee Entertainment Enterprises Ltd (ZEEL) MD & CEO Punit Goenka. “Pay TV market has seen an erosion of 4.6 million households which have moved to free-to- air (FTA) services. This is largely caused due to the pandemic, and is, therefore the reason for the de-growth seen in subscription,” said Goenka while talking to analysts, during the Q3 earnings call, about the decline in the domestic subscription revenue.
According to Goenka, this shift to FTA still continues. “It has been a steady de-growth. It’s not like it happened in one quarter or anything, it’s happening over a period of time,” he shared. Asked if channel pricing played a role in this decline in the number of subscribers or lack of new content during the pandemic led to the migration, Goenka said it was difficult to say that right now.
“Lack of fresh content is there. The second part is that during the first wave of the pandemic, we saw a lot of migration happen from big cities to smaller cities where people went back, and that’s how the loss of the subscriber base happened,” he said. Commenting on the comeback of these subscribers, Goenka said, “I’m certain if we offer quality content, consumers will start migrating back because this is still the cheapest form of entertainment available in this country.
He further added, “I’m not really worried about the fact that if we raise prices, people will just stop watching Pay TV. But of course, we have to be conscious of how price increases take place in a country like India.”
According to Goenka, one can’t really define which category of customer left and which category of consumer came back. “That data is not available with us, but I do certainly believe that, as and when television penetration increases, we will see consumers converting to Pay TV going forward as well. And keep in mind, today, one of the largest consumption sectors, apart from GEC, is movie. And that’s where we have seen the most impact during the pandemic. So, there is a segment of audiences that consumes only films and those people may be the ones migrating away.”
Talking about the revenue outlook from subscription for FY23, Goenka said it’s difficult to predict given the fact that there is still a very uncertain environment because of NTO 2.0.
“From the time they clear the NTO, we need a 45-day window to implement it. There is still a lot of uncertainty, and as I’ve maintained, we will see disruption for a quarter or maybe a little bit more than a quarter before we can start seeing steady growth.” When asked about the broadcasters’ decision to keep their flagship channels outside the package or bouquet and how will they convince the households to separately subscribe to the planking channel, Goenka pointed out that no household is buying broadcaster bouquets. “They buy the bouquets created by DPOs.”
“Even today, there are very few households, the number will be single digit, that actually do ala carte and buy their bouquet. In majority, maybe 95 per cent of the cases, it’s the DPOs’ bouquet that gets bought. And I don’t see that changing going forward just because we have changed our bouquet. So it will still be the DPOs who will create the bouquets. But yes, pricing for the consumer will certainly go up.”
