Zee Beats Star to Become the Most-Watched Entertainment Network

Zee implemented the strategy to increase original programming hours in regional channels which helped its ratings.

Zee Network dethroned Star India with the highest viewership share in the entertainment broadcasting space, helped by its strategy to increase original programming hours in regional channels, according to a report by CLSA.

Zee Network has 25 percent viewership ahead of Star India’s 24 percent, the brokerage said citing data from the Broadcast Audience Research Council (BARC). CLSA analysed 70 channels accounting for over 60 percent of television viewership. Viewership rating drives pricing for advertising, which contributes 60-70 percent of the revenue for broadcasters.

The viewership share of Zee’s regional channels improved from 9 percent in June last year to 12 percent now.

The Hindi general entertainment channels and Hindi Movies remained stable over the past one year, according to BARC data. It also showed that most of the gains for Zee came from the rural market.

“Zee’s improvement in ratings bodes well for its ad revenues with an upside to our forecast 14 percent CAGR (compounded annual growth rate) in ad revenues over FY18-21,” Deepti Chaturvedi, analyst at CLSA, said in the report.

“Every 1 percentage point higher growth in Zee’s ad revenues should boost its earnings by nearly 2 percent.”

Sun TV, the dominant player in the Tamil television industry, has seen its viewership share decline further from 15 percent in June 2017 to 12 percent this month as it faces tough competition from Star Vijay and Zee Tamil, the data shows. Though it still dominates the Tamil market, its share in Tamil Nadu has dropped from 71 percent last year to 56 percent.

With Viacom18 also launching its Tamil GEC (general entertainment channel), Sun’s viewership share, particularly in Tamil, is likely to see further pressure. Sun’s viewership loss adds a downside risk to 9 percent CAGR in ad revenues.

Deepti Chaturvedi, analyst at CLSA

Sun TV currently trades at a discount of 30 percent to Zee TV on account of legal and political risks associated with the company.

A Few Highlights From BARC Numbers

• Zee’s viewership share was 22 percent last June.
• Star’s share stood at 26 percent last June.
• National broadcasters like Viacom18 and Sony’s viewership shares are stable at 15 percent each.

(This story was originally published on BloombergQuint.)