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Extraordinary Together
Zee Entertainment
3600 Entertainment Content Company
Presentation Flow
India M&E
Industry
Domestic Broadcast
Digital
A to ZEE of
Content Movies & Music
Leadership
International
Live Events
Financials
2
India Media & Entertainment Industry – An Overview
TV
INR660bn
Print
Others
INR303bn
INR157bn
CY17:
INR1,473bn Films
Digital INR156bn
INR119bn
Music
Live Events INR13bn
INR65bn
Source: FICCI-EY M&E Report 2018
* - Others include Radio, Animation, VFX, Gaming and OOH
3
M&E Industry – An all-round growth story
Others CY20e
18% Category CY12-17 CAGR CY17-20e CAGR
15% CY17 Television 12.3% 9.8%
Music
10% Print 6.2% 5.7%
CY12
3%
8% 42% Films 6.8% 12.0%
14% Share of 45%
Digital 11% M&E 45% Digital 40.5% 24.9%
Verticals
11% Music 4.2% 10.7%
27%
Others* 22.0% 17.6%
Films 9%
21%
M&E industry 12.4% 11.6%
Television Source: FICCI-EY M&E Report 2018; FICCI-KPMG M&E Report 2017
* - Others include Radio, Animation, VFX, Gaming and OOH
18%
Print
Traditional media expected to grow at a healthy pace along with digital
4
A to ZEE of Content Leadership
Domestic Broadcast
➢ Hindi GEC
➢ Regional Entertainment
➢ Hindi Movie Cluster
➢ Niche Channels
Digital
➢ ZEE5
Movies & Music
➢ Zee Studios
➢ Zee Music Company
International
➢ America
➢ Europe
➢ MENAP & Africa
➢ APAC
LIVE
➢ Zee Live
➢ Zee Theatre
5
Domestic Broadcast
6
Television to continue on the growth trajectory
Television industry in a secular growth phase Television offers much wider reach than other mediums
(INR bn) (monthly reach amongst 12+ individuals)
TV - 9.8% CAGR 75%
862
660
594
39%
19% 19%
CY16 CY17 CY20e TV Newspaper Radio Internet
Source: FICCI-EY M&E Report 2018; FICCI-KPMG M&E Report 2017 Source: IRS 2017
Low ARPU of ~US$3/month makes television the most affordable medium of entertainment
Rising income levels to drive TV penetration
Low time spent (225mins/day) on television offers room for growth
7
Television market – Revenue composition
TV Revenue (CY17)
INR 660bn
Advertising Revenue Subscription Revenue
INR 267bn (40.5%) INR 393bn (59.5%)
Broadcasters’ Share
Broadcasters’ Revenue INR 99bn (25.2%)
INR 366bn
Distributors’ Share
INR 294bn (74.8%)
Source: FICCI-EY M&E Report 2018
8
Strong growth in television ad spends to continue
Double-digit
nominal GDP
growth Healthy growth in television ad spends to continue
Increasing (INR bn)
TV – 11.3% CAGR 368
discretionary
spends
243 267
Growth
Drivers
Increasing
share of
organized
sector
New CY16 CY17 CY20e
categories like
BFSI, Pharma Source: FICCI-EY M&E Report 2018
& Travel
Television will remain one of the most preferred medium for brand building given its reach
9
Television distribution value chain – A snapshot
PAY
DTH
Operator Subscribers 52mn
PAY
Broadcasters Local Cable
MSO Subscribers 99mn
Operator
FTA
DD Freedish Viewers 31mn
Content flow Source: FICCI-EY M&E Report 2018
Revenue flow
MSOs and DTH operators make bouquets consisting of channels of different broadcasters
Regulations in India prohibits content or platform exclusivity
ZEEL reaches almost all C&S households through its bouquet of 37 channels
10Drivers in place for sustained subscription revenue growth
Digitization
Increasing HD penetration
Increase in transparency on
ARPU of HD packages is
account of digitization will help Broadcasters’ Subscription ~2x-3x of that of SD
broadcasters in monetization revenue (INR bn)
125
90 99
ARPUs expected to increase
Low ARPU offers
room for growth 88 400
368
(USD/mo)
48 255
31 32 217
22 2016
6 12 CY16 CY17 CY20e
3
2021(P)
Brazil
Singapore
UK
US
India
Nigeria
Japan
China
Source: FICCI-EY M&E Report 2018, FICCI-KPMG M&E Report 2017,
OFCOM Market Report 2016
Digital Cable ARPU DTH ARPU
Completion of digitization could drive long awaited acceleration in ARPU growth
11Complete entertainment portfolio
37 Channels across genres and languages
12Steady improvement in viewership share
Network share across broadcasters, FY18 ZEEL has consistently increased its viewership share
17.1% 17.7%
16.4%
14.9%
ZEEL, 18.0% 14.1%
13.1%
11.6%
Others, 31.6%
Star, 17.7%
Viacom,
10.1%
Sun, 12.2%
Sony, 10.4%
CY11 CY12 CY13 CY14 CY15 CY16 CY17
Network share excludes News and Sports channels Data as per TAM upto March 2015 and as per BARC from April 2015 onwards
ZEEL has established strong market position across Hindi entertainment, Regional and Movies
13ZEEL - well entrenched in content eco-system
Independent production ~500 hours of
houses original
content
produced
every week
In-house production house
ZEEL has
library of over
250,000+
hours of
content
Large number of small production houses with limited risk taking ability
ZEEL engages closely with the producers right from the conceptualization stage
Intellectual property right of the content lies with ZEEL
14Digital
15Digital Gaining Momentum
Digital is expected to continue its growth momentum Broadband subscriber base driven by mobile
224 429 mn internet users
(INR bn)
Wired Broadband
119 5.0%
92
3G+4G 2G
71.5% 23.5%
CY16 CY17 CY20e
Source FICCI-EY M&E Report 2018 Source : TRAI Reports, IIFL Capital Research
Data Consumption grew 7x in the last one year Digital is driving incremental video consumption
1,810 2,010
(Bn MB per month) (Daily time spent by an Individual on video in mins)
1,319 27
173
155
122 178
66
Television Digital
Mar-14 Mar-15 Mar-16 Mar-17 Sep-17 Dec-17
3QCY16 4QCY17
Source : TRAI Reports, IIFL Capital Research Source : BARC, Reliance Jio Q3FY18 press release
16ZEE5 – ZEEL’s comprehensive digital offering
➢ Intuitive UI ➢ Originals, digital first content
➢ Strong recommendation engine ➢ Strong movie library
➢ Premium content across genres
Technology Content
Regional Revenue
➢ Regional language UI
Focus Model
➢ AVOD
➢ Regional language content ➢ SVOD
➢ TVOD
ZEE5 launched on 14th Feb with an extensive campaign
DittoTV and OZEE subscribers auto upgraded to the new platform
17ZEE5 – An unrivalled content catalogue
ZEE5 Originals
➢Originals in 6 languages
➢New series to be released
every month
➢Captivating shows Movies
➢3500+ movies
➢12 languages
International Content ➢100+ digital premieres
➢Shows from Turkey, Brazil,
Pakistan, Korea etc.
➢Dubbed/sub-titled in
multiple Indian languages Premium Content
➢Some of the best content
from International studios
➢Plays from Zee Theatre
➢Health & Lifestyle content
Live, catch-up & more
LIVE ➢90+ live channels, catch-up
content
➢Best of ZEEL library shows
➢Kids entertainment & more
ZEE5 launched with 100,000+ hours of content across languages and genres
18ZEE5 – Customized for the Indian consumer
UI/UX Innovations
➢ Flexibility to chose display in 11 languages
➢ Option to choose content from 12 languages
➢ Voice search for seamless search experience
Technology Customizations
➢ Multiple CDN for smooth streaming experience
➢ Option to download content to memory card for
offline viewing
➢ Progressive Web App (PWA) for an ‘app like’
experience on web browser
ZEE5 is the only entertainment app in India to offer voice search
19Movies and Music
20Indian movie landscape changing fast
Rising penetration of multiplexes bodes well for movie Regional movies gaining traction in INR142bn Indian movie
producers industry
Punjabi Others
Number of Multiplex Multiplex screens as % of 8%
screens overall screens Bengali 2%
2%
3,000 2,750 35%
Marathi
2,500 28.9%30% 3%
25%
2,000 Malyalam
1,500 20% 4%
1,500 Telugu Hindi
15.1% 15% 10% 51%
925
1,000
10%
8.7% Tamil
500 276 5%
20%
2.1%
0 0%
CY05 CY09 CY13 CY17
FICCI-EY M&E Report 2018
➢ Exhibition space is getting organized which along with digital ➢ Regional Cinema is gaining popularity – Tamil, Telugu,
delivery of movies has increased transparency in the business Marathi, Punjabi language movies becoming popular
➢ Digital delivery has increased number of screens on which ➢ Collections of popular movies are going up while niche
movie is simultaneously released movies are also finding an audience
➢ Digital rights is becoming an important revenue stream for
movie producers
21Zee Studios’ approach to movie production
SCRIPT DRIVEN ACROSS BUDGETS, ACROSS PROFIT SHARING WITH KEY LEVERAGE PRESENCE
LANGUAGES TALENT ACROSS VERTICALS
➢ Strong story-line ➢ Portfolio approach to ➢ Engaging key talent on ➢ Backward integration in
➢ Low dependence on star movie making profit sharing movies offer significant
cast ➢ Reduces financial impact synergies because we are
➢ Focus on low to mid
of unsuccessful movies buyers of various movie
➢ Complete involvement in budget movies
rights
all aspects of production ➢ Good mix of regional and ➢ Talent cost could make or
break a movie ➢ Allows a 3600 promotion
Hindi movies
of movies
Zee Studios plans to make 10-12 movies a year which entails working capital investments of ~INR1.5bn
22One of the leading movie production studios in India
Hindi Movies Regional Movies
Received
National Film
Award for The
Best Actor
23Zee Music Company – rapidly building its catalogue
Digital consumption of music is driving music industry’s growth Recently acquired Music titles
(INR bn) 14.5% CAGR
18.0
12.0
10.6
CY12 CY17 CY20e
Source: FICCI-EY M&E Report 2018
Digital contributes upto 70% of the revenues of music labels
Zee Music Company (ZMC) is building a strong portfolio in regional markets like Punjabi, Telugu, Gujarati,
Kannada and Bengali alongside Hindi
ZMC acquired 50% of the music rights released over the last 3 years
24International
25International – Serving diaspora and local audience
39 international channels with 13 channels in 9 non-
Presence in 170+ countries with reach of 578mn
Indian languages
Serves South Asian Diaspora as well as local audience in Gradually expanding in markets with affinity for Indian
select countries content
Increasing reach of ZEEL’s international portfolio FY18 International revenues – INR 7,683mn
(mn)
578
Others, 18.2%
Advertising,
363 31.1%
282
Subscription,
50.7%
FY16 FY17 FY18
26A strong global presence
39 International Channels 13 Local Language Channels
* - Logos relate to ZEEL’s channels catering to local audience
27Live Events
28Live Events – A growth opportunity
Organized Event Industry market size
(INR bn)
109
65
56
CY16 CY17 CY20e
Source: FICCI-EY M&E Report 2018
India is opening up to ticketed live events which presents a growth opportunity
Zee Live is dedicated to all forms of live entertainment for different kinds of events including Festivals,
Theatre, and Concerts
29Financials
30FY18 revenue and costs breakdown
Revenue breakdown – INR66,857 mn Costs breakdown – INR46,095 mn
Others,
6.8%
EBITDA, 31.1%
Operating , 37.8%
Subscription,
30.3%
Advertising,
62.9%
Admin & Others,
12.5%
Employee ,
10.0%
A&P, 8.6%
31Strong growth in advertising and subscription revenues
42,048
INR mn
36,735
33,652
26,603
23,081
19,639
18,225
15,841 16,302 16,388
13,184 14,240
11,648
9,223
FY12 FY13 FY14 FY15 FY16 FY17 FY18
Advertising revenues Domestic Subscription revenues
*ZEEL divested its sports business reflected in FY18 domestic subscription revenues
32Strong and consistent profitable growth
34.6% 33.0%
33.5% 32.5% 31.1%
30.1% 29.9%
EBITDA CAGR
18.8%
29.9%
25.8% 27.2% 25.7% 26.0%
24.3%
FY12 FY13 FY14 FY15 FY16 FY17 FY18
EBITDA margins *
EBITDA margins (ex-Sports)
*ZEEL divested its sports business – Ten Sports Network, in FY17
33Consistent payout to shareholders
Consistent dividend distribution Payout to shareholders is higher than annual equity dividend
31.2% FY12-18 (Cumulative) 63.2%
30.3%
28.4%
26.6% 26.1%
25.2%
21.5%
30.2%
25.7%
Equity Equity + Buyback Equity + Buyback +
FY12 FY13 FY14 FY15 FY16 FY17 FY18 RPS
Equity
Equity
* Dividend payout is calculated on profit after tax (excluding exceptional items) Redeemable Preference Shares (RPS) worth INR 21 bn issued in 2014
As per Dividend policy, ZEEL will pay 25-30% of Consolidated profits or 1/3rd of Standalone profits,
whichever is higher
ZEEL has used buyback and bonus preference shares in the past to boost payout to shareholders
34Thank You
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