MxMIndia

Tag: Zee Sony

  • And with so much going on), 2023 is unlikely to be short of excitement, writes Shailesh Kapoor

    The Year of Moving On… from the Pandemic

     

     

     

    By Shailesh Kapoor

     

    Shailesh KapoorWe are nearing the end of 2022. It was a year when a lot seemed to be going on, in the Indian entertainment business, but not always towards any lasting impact. Mostly then, it was the year of recovery, which saw a semblance of normalcy for the first time since 2019, in audience behaviour and sales figures across domains. It was also a year of mergers and acquisitions, with some big-ticket agreements (Zee-Sony, PVR-INOX, Adani-NDTV, ShareChat-MX Takatak) making the headlines. Such deals can be seen as an indirect outcome of the pandemic, which has fundamentally altered business models of all shapes and forms.

     

    On the content front, there was less to speak about. Theatres reopened and 2022 will end up being the second-highest grossing year ever at the Indian box-office. But except the highly imaginative RRR and Kantara, the box-office came from the usual franchise-led cinema that’s driving theatrical footfalls globally now.

     

    The linear television industry has been devoid of surprises on the content front for a while, and 2022 was no different. Some of the better content, then, came in the streaming space, which entered a settled phase post the windfall gains from the pandemic. To begin with, there was more genre variety on offer, with many stories going beyond the staple action-suspense-thriller box. A list of some of the defining shows and direct-to-OTT films of 2022 deserves a piece of its own, in the coming week or two.

     

    But the streaming industry has its task cut out. Our recently-released OTT audience sizing report reveals that the bigger markets have reached saturation levels on OTT penetration and SVOD subscriptions. The average OTT penetration in the top 20 cities in India stands at a high 72%. While more than half of these are still watching only ‘free’ content, the finding that should set alarm bells ringing is: Among SVOD subscribers, the average number of subscriptions taken has remained exactly the same as last year (2.4 subscriptions per paying subscriber).

     

    Expecting the (relatively) early adopters to keep subscribing to more apps is, hence, a wishful proposition. The next level of growth for pay platforms can, therefore, come from converting free (AVOD) audiences into SVOD, especially outside the top 6 metros. And this is easier said than done, because neither the content being churned out, nor the audience’s willingness to pay for their entertainment, are aligned to this growth path.

     

    Streaming platforms have managed to bail out the Hindi film industry for much of 2020-22. As they face growth pressure themselves in 2023, ripples will be felt in the theatrical business too. Early signs of this could be felt this year, when we saw several small films release theatrically, only to legitimize their OTT licensing deals.

     

    With so much going on (and I haven’t even mentioned sports and news in this round-up), 2023 is unlikely to be short of excitement. Hope the quality of content measures up to all the action on the business front.

     

  • The Indian Premier League broadcast rights auction in June will impact the landscape of Indian media, writes Shailesh Kapoor

    On the field and off it: The big IPL year

     

     

    By Shailesh Kapoor

     

    Shailesh KapoorThe biggest sporting event in India is currently underway. With each passing year, IPL seems to only grow in stature and brand value. This time, there are two new franchises, and the spectators are back in the stands too, albeit with a cap of 25 per cent. More franchises mean more matches and more talent on display, all of which eventually leads to higher monetization and valuation of brand IPL.

     

    But the eyes this year are not just on the ongoing IPL but also on what’s to follow on the IPL front over the next few weeks. IPL broadcast rights are up for renewal, and we are set to see a fierce battle in the auctions scheduled for mid-year.

     

    IPL is a crown jewel for Disney (Star), not just in India, but even worldwide. Hotstar, on the back of IPL, contributes more than 30 per cent to Disney+’s global subscriber base. Needless to say, Star India will stretch itself beyond its limits to retain both television and streaming rights.

     

    But there’s the newly-merged entity that goes by the working title Zee-Sony, which is a serious contender. Sony has been down the IPL road before, being the first ones to put their money on it, when the league was only an experiment, not a proven success story. With the combined might of two big networks, Star India’s competition is tougher than it was five years ago.

     

    Add Reliance (Viacom) to the mix, and we have a three-way tussle for IPL rights on the cards. BCCI’s decision to not go for combined bids this year makes things even more interesting, because it puts streaming platforms like Amazon Prime Video into the reckoning, along with Google and Facebook.

     

    No amount of speculation can prepare us what may eventually happen when the e-auction commences on June 12 this year. But whatever the outcome is, it will shape the landscape of the Indian media industry for the next few years, even the next decade.

     

    The television industry is India has been struggling for relevance, despite being the medium with the highest reach, and by some margin too. IPL (and cricket in general) is one of the few things that keeps television relevant to the times, as far as media planning and buying goes. Digital viewership may have gone up, but television remains the dominant medium of sports consumption. The entire television industry, and the advertisers’ group (brands and media agencies), will be keenly awaiting the outcome.

     

    Till then, there’s some real cricket on the grounds to keep us busy. For another seven weeks, the cricketing action will continue to enthrall millions across the nation. It will also act as a reminder for the potential bidders everyday, on how big the opportunity in front of them is.

     

  • Most in the A&M&E arena have welcomed the move. Now one has to just wait out for the regulatory fineprint to be cleared

    #SonyZee Merger in ~8 months, Cricket rights & OTT key to future

     

     

    By Our Staff

     

    As most of the paperwork has been completed with the two parties having signed a definitive agreement, all eyes are now on the regulatory approvals. The 75 per cent shareholder approval is being given much importance, given the problems that Invesco had with the Zee promoters. But that we hear isn’t much of a problem. Invesco wants maximum bang for its invested buck, and is not known to be a predatory investor. Either in India or the rest of the world.

     

    However, it must be noted that while the Zee-Sony merger is being called a done deal, there have been a few instances when the final closure hasn’t happened. The much touted Publicis-Omincom merger, for instance, fell through. In India too, some like HDFC and Max Life, RCom-Aircel, Snapdeal-Flipkart and IDFC-Shriram Finance are said to have failed at the ‘due diligence’ or a variety of circumstances, most often dubbed ‘unforeseen’.

     

    But both Zee and Sony have been wanting to get this done, with each other and with others. Given that it’s been discussed in their own offices for a while, care would’ve been taken to ensure their books and operations are merger-ready.

     

    A lot is being said about what the merger and what it will mean. Other than it becoming a behemoth and the biggest broadcast conglomerate in the currently, there is a great amount of soul searching that the combined entity needs to be done.

     

    01. Other than the Sony Sab in the Tier 2 (or shall we say 1A), none of the general entertainment channels are #1 the pack.

    02. The sports channels have some good properties, but without IPL and the various India cricket matches, it doesn’t have the desired clout

    03. Both Sony Liv and Zee 5 have some good content, but Disney+Hotstar among the Indian entities, and Netflix and Amazon Prime Video are bigger. Plus there’s Voot that’s getting into sports and could emerge as a significant player. It’s gambit for Bigg Boss, for instance, was significant. Perhaps a merger of Zee5 and SonyLiv will be a good idea

    04. The strength of Zee has been in its regional play, but its mainstay Marathi offering has taken a beating in ratings. The others are good, and there is an urgent need to consolidate that franchise

    05. The studio business is good and strong, but the likes of an Endemol, Balaji and now even Applause are doing some great, buzzy work

     

    In the light of the above, and some exceptional talent that both organisations have, there is a clear advantage of a merged entity.

     

    One of the factors discussed in the run-up to the agreement signing on Tuesday was the factor that Zee will be reduced to a minority shareholder, even as Punit Goenka will be the boss. Founder and chairman emeritus Subhash Chandra is known to never be a silent member in the M&E space. He is sure to spring back to something significant soon with a few of his other M&E interests. Also, what about the charges that Invesco had made about Zee and its governance. If indeed they are incorrect as Zee has said, will the conglomerate file a defamation suit against it? Or will there be a settlement.

     

    All eyes are clearly on the merger happening sooner that. Most in the A&M&E arena have welcomed the move.

     

  • Even if due diligence may be a formality, there are questions on how some of ZEEL's hostile investors will react

    So will the Zee-Sony merger go through?. Punit Goenka to be Big Boss of combined entity

     

     

    By Our Staff

     

    At any other time, the news that Zee Entertainment will merge with Sony Pictures Network India wouldn’t have been a surprise. But since it’s come in less than two weeks since the public display of hostility of key investors, it took everyone by surprise. Including those who’ve been tracking the sector for a while.

     

    So here’s what we know: the Board of Directors of Zee Entertainment Enterprises Limited (ZEEL) held a meeting yesterday (Tuesday, September 21, 2021) and unanimously provided an in-principle approval for the merger between Sony Pictures Networks India (SPNI) & ZEEL. Sony Pictures also sent us a communique stating this the same.

     

    The question which everyone seems to be asking is how will the two investors holding a significant minority investment of 18-odd per cent react to this. Will they – given their buy of Rs 400 per share and the prevailing rate of Rs 320 (at 1pm today) be happy with the way things are.

     

    Will there be a settlement between Zee, Sony and the unhappy investors? Or will they make life difficult for the powers that be.

     

    And also very importantly, will Zee founder and chairman emeritus Subhash Chandra have a role in the merged entity? The reason for this question is that there were charges by some quarter that despite exiting from an executive role, he continued to steer the company.

     

    The due diligence will start. In the past, we have had some stories about Zee acquiring an FM station network and a music network that have not materialised. But this is different and much larger.

     

    A few years back, Zee unveiled a new identity with the tagline ‘Extraordinary Together’. Will the mega entertainment merchants Sony and Zee indeed be extraordinary together?

     

    Here’s the press release issued by Zee Entertainment:

    The Board has evaluated not only on financial parameters, but also on the strategic value which the partner brings to the table. The Board concluded that the merger will be in the best interest of all the shareholders & stakeholders. The merger is in line with ZEEL’s strategy of achieving higher growth and profitability as a leading Media & Entertainment Company across South Asia. The Board has authorized the management of ZEEL to activate the required due diligence process.

     

    The shareholders of SPNI, will hold a majority stake in the merged entity. The shareholders of SPNI will also infuse growth capital into SPNI as part of the merger such that SPNI has approximately USD 1.575 billion at closing, for use in pursuing other growth opportunities.

     

    Basis the existing estimated equity values of ZEEL and SPNI, the indicative merger ratio would have been 61.25% in favour of ZEEL. However, with the proposed infusion of growth capital into SPNI, the resultant merger ratio is expected to result in 47.07% of the merged entity to be held by ZEEL shareholders and the balance 52.93% of the merged entity to be held by SPNI shareholders.

     

    ZEEL and SPNI have entered into a non-binding term sheet to combine both companies’ linear networks, digital assets, production operations and program libraries. The term sheet provides an exclusive period of 90 days during which ZEEL and SPNI will conduct mutual diligence and finalize definitive agreement(s). The merged entity will be a publicly listed company in India.

     

    As part of the transaction, Mr. Punit Goenka will continue to be the Managing Director and CEO of the merged entity. Further, certain non-compete arrangements will be agreed upon between the promoters of ZEEL and the promoters of SPNI. According to the term sheet, the promoter family is free to increase its shareholding from the current ~4% to up to 20%, in a manner that is in accordance with applicable law. Majority of the Board of Directors of the merged entity will be nominated by Sony Group.

     

    It is anticipated that the final transaction would be subject to completion of customary due diligence and execution of definitive agreements and required corporate, regulatory and third- party approvals, including the votes of ZEEL’s shareholders.

     

    ZEEL’s strong expertise in content creation and its deep consumer connect established over the last 3 decades, coupled with SPNI’s success across entertainment genres (including gaming and sports) will add significant value to the merged entity and its management team, thereby increasing shareholder value multifold.

     

    Speaking on the development, Mr. R. Gopalan, Chairman, ZEE Entertainment Enterprises Ltd. said, “The Board of Directors at ZEEL have conducted a strategic review of the merger proposal between SPNI and ZEEL. As a Board that encompasses a blend of highly accomplished professionals having rich expertise across varied sectors, we always keep in mind the best interests of all the shareholders and ZEEL. We have unanimously provided an in-principle approval to the proposal and have advised the management to initiate the due diligence process.

     

    ZEEL continues to chart a strong growth trajectory and the Board firmly believes that this merger will further benefit ZEEL. The value of the merged entity and the immense synergies drawn between both the conglomerates will not only boost business growth but will also enable shareholders to benefit from its future successes. As per legal and regulatory guidelines, at the required stage, the proposal will be presented to the esteemed shareholders of ZEEL for their approval.”

     

    Under the guidance of the Board, the management of ZEEL, ably led by Mr. Punit Goenka, continues to steadily work towards achieving higher profitability in line with its set goals for the future. With this corporate development, the merged entity will result into an accelerated growth and a significant opportunity to create tremendous value for all its stakeholders.

     

    And here’s the communique issued by Sony Pictures:

    Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises Ltd. (ZEEL) today announced that they have entered into an exclusive, non-binding Term Sheet to combine both companies’ linear networks, digital assets, production operations and program libraries.  The non-binding Term Sheet provides an exclusive negotiation period of 90 days during which ZEEL and SPNI will conduct mutual diligence and negotiate definitive, binding agreements. The combined company would be a publicly listed company in India and be better positioned to lead the consumer transition from traditional pay TV into the digital future.

     

    The merger of ZEEL and SPNI would bring together two leading Indian media network businesses, benefitting consumers throughout India across content genres, from film to sports. The combined company is expected to benefit all stakeholders given strong synergies between ZEEL and SPNI.

     

    Under the terms of the non-binding Term Sheet, Sony Pictures Entertainment, the parent company of SPNI, would invest growth capital so that SPNI has a cash balance of approximately USD $1.575 billion at closing for use to enhance the combined company’s digital platforms across technology and content, ability to bid for broadcasting rights in the fast-growing sports landscape and pursue other growth opportunities. Sony Pictures Entertainment would hold a majority stake in the combined company. Current ZEEL Managing Director & CEO Punit Goenka is to lead the combined company. The combined company’s board of directors would include directors nominated by Sony Group and result in Sony Group having the right to nominate the majority of the board members.

     

    It is anticipated that a final transaction would be subject to completion of customary due diligence, negotiation, and execution of definitive binding agreements, and required corporate, regulatory and third-party approvals, including ZEEL shareholder vote.

     

  • Ajay Bhalwankar, who had quit Zee recently, will be joining Sony Entertainment Television (SET) as Chief Creative Director wef April 7

    Zee-Sony-Zee & now Sony again. Ajay Bhalwankar is back at Zee, er, Sony, to be Chief Creative Dir, SET

    By A Correspondent

     

    If you thought Zee-Sony-Zee-Sony was part of the lyrics of a new Yo Yo Honey Singh chartbuster, pause for a minute. It’s the story of our own Ajay Bhalwankar. Mr Bhalwankar, who had quit Zee recently, will be joining Sony Entertainment Television (SET) as Chief Creative Director. He is expected to join on April 7 and will report to Nachiket Pantvaidya, Senior Executive Vice-President & Business Head of MSM’s flagship channel. In this role, Mr AB will provide creative leadership and direction for the channel. He will lead the Programming and OAP teams.

     

    With over two decades of experience first in journalism and then at Zee for a long period (1994-2009), for a bit with Sony (SET, 2009-2011) and then again with Zee as Content Head-Hindi GECs.

     

    Announcing the appointment, Senior EVP and Business Head, SET, Nachiket Pantvaidya said, “Ajay is an extremely experienced individual with a rich experience of over 20 years in Journalism and Television, spanning various roles of creating, writing, programming, producing and directing entertainment content. Under Ajay’s leadership I am confident that we will make the right strides towards our vision of best in class content for SET.”

     

    Said Mr Bhalwankar: “I’m delighted to join SET again and hope to provide valuable programming inputs across content on the channel. It is an extremely challenging role and I am looking forward to this exciting journey.”