Media
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<strong>Media</strong><br />
Impact of higher retail price-led reduced reach on advertisement revenue<br />
overplayed: Our interactions with media agencies indicate that an estimated ~2,000<br />
GRPs/week is typically budgeted for the Hindi GEC category (33% viewership share<br />
across categories). Even if higher retail prices for driver pay channels lead to a<br />
reduction in reach, GECs will continue to be the preferred vehicle to get maximum<br />
and cheapest reach for advertisers. Hence, TV ad budgets are unlikely to move<br />
dramatically, implying that cost per reach could go up.<br />
Decoupling of capacity-related rental income and subscription income to reduce<br />
DPOs’ dependency on subscription: TRAI’s move to assure DPOs upto a maximum<br />
of INR130/subscriber/month (ex-taxes) rental income (for 100 SD channels) +<br />
INR20/month for every additional 25 SD channels is expected to ensure the recovery<br />
of network and capacity-related costs, thereby reducing DPOs’ dependence on<br />
subscription. Currently, MSOs/DTH players clock an average consumer-level ARPU of<br />
INR260-280/subscriber/month. The assured rental effectively safeguards 45-50% of<br />
industry ARPU.<br />
Capping of HD channel pricing at 3x SD channel pricing – a non-event: TRAI has<br />
capped HD channel pricing to 3x of corresponding SD channel pricing. This is unlikely<br />
to impact any stakeholder – the pricing of HD channels is currently 1.5-2x the pricing<br />
of corresponding SD channels.<br />
Exhibit 1: Existing vs New genre-wise price caps (INR)<br />
Existing Framework<br />
New Framework<br />
Genres MRP Ceiling Genres MRP Ceiling<br />
GEC (English) 6.52<br />
GEC (Hindi) 10.58 GEC 12.0<br />
GEC (Regional) 6.72<br />
Infotainment 6.74 Infotainment 9.0<br />
Kids 5.62 Kids 7.0<br />
Lifestyle 12.6<br />
Movies 9.66 Movies 10.0<br />
Music 3.47<br />
News 3.86 News and current affairs 5.0<br />
Religious 2.1 Devotional 3.0<br />
Sports 18.9 Sports 19.0<br />
Source: Company, MOSL<br />
Exhibit 2: Zee’s portfolio of channels<br />
Hindi GEC Regional Movie Cluster Engl Ent Lifestyle and Niche Music<br />
SD HD FTA SD HD SD HD<br />
Zee TV Zee TV HD Zee Anmol Zee Marathi Zee Cinema Z Café Z Café HD living Foodz Zing<br />
Zindagi Zee Talkies Zee Action Z Studio Z Studio HD Zee Salaam Z etc Bollywood<br />
&TV &TV HD Zee Bangla Zee Classic<br />
Zee Bangla Cinema &pictures &pictures HD<br />
Zee Telugu<br />
Zee Kannada<br />
Sarthak TV<br />
Zee Tamizh<br />
Zee Yuva<br />
Source: Company, MOSL<br />
13 October 2016 2
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