Zee Telefilms - company analysis

Zee has been a company that has been trailing in quality in terms of content for a long time now. It has been quite some time now since the combine of Ekta Kapoor’s Balaji Telefilms and Star have had all the shows that have done well on the prime time and the shows of Zee has been laggards. This is exemplified by the fact that Zee has only five slots in the 100 most watched slots. To take care of this problem they have tried to come up with many programmes in the last few years but none have been able to deliver. Their next strategy to overcome this problem is to come up with regional languages channels and news and sports channels. How well would this work is really questionable as the competition in this area is really tough. Especially for the sports channel. This is because in India for any sports channel to do well they must have substantial rights to show cricket matches. These rights are given out long in advance and the contenders in this space are big players like ESPN Star combine. It is very likely that Zee does not bag rights to show such matches for a very long time and till that time this channel becomes a drag on its profitability. In the news space as well the competition is really stiff with established players like CNBC and Star. In the DTH space also the competition seems to have an edge over Zee. This is because the Star Tata combine has got license to roll out DTH. The benefit for this combine would be that the promoters of Star have already got experience in rolling out DTH and because this combine is in a better shape than Zee financially they can roll out the product and offer it at a cheaper rate than Zee. If Zee also tries to match with them in prices it will only hit its bottom-line further because it is not in the same smart shape as its competitors. There is not much clarity on how the rules of the DTH game would evolve but in a lot of scenarios Zee would be hurt in the favour of its competition. One is if the channels are given the right to choose which DTH provider they want to go for. It is natural then for Star to choose Space TV, which is floated by them, and Tatas. Without Star very few households would want to take up the services offered because of the huge popularity that the shows on the channels enjoy. Another situation can be where instead of the bouquet of channels now offered a company is forced to offer individual channels. This will also hurt profitability as all the channels are bundling their offers in such a way that they are able to gain from their less profitable channels as well. However this danger lies in the game for every body. The only way for Zee to turn back to the fast track is to overhaul its content, in all other counts the competition seems to be ahead of them as well as better prepared to manage the new scenario.