Zee5 ends content sharing deal with telecom co

Zee is increasingly pushing its own platform Zee5 for its on-demand content

Zee5, the on-demand content app from Zee Entertainment, has stopped sharing its content with the content app of at least one telecom player.

Punit Goenka, CEO of India’s largest home-grown television broadcaster, said his company has decided not to renew a content sharing deal with a telecom player when it expired in August.

He said the decision was taken in the longer-term interest of the company, even though, by doing so, Zee ended up losing some revenue and eyeballs in the shorter term.

Because of the decision to cancel the deal, the digital content division of Zee Entertainment saw very very soft growth in the three months from July to September.

Revenue generated by the Zee5 division during the July-September quarter was Rs 98.9 cr, only modestly higher than the Rs 94.9 cr generated in the preceding quarter of Apr-Jun.

This was despite the fact that the number of daily active users of the Zee5 app jumped 30% between June and September (4 mln to 5.2 mln).

Not only did the cancellation of the telco partnership hurt revenue growth, it also pushed the Zee5 division deeper into the red, and the unit posted a loss of Rs 189.4 cr, up from a loss of 145.1 cr in the preceding three months.


Indeed, Zee was the most ‘liberal’ among all the five major broadcasting groups in India — Zee, Star, Sony, TV18 and Sun — when it came to sharing content with third-party apps was concerned.

As of mid 2019, Zee5 had content partnerships with all the three important telecom operators in India — Jio, Vodafone Idea and Bharti Airtel, and Zee5 branded content was available on the apps of all these telecom operators.

On the other hand, Zee’s rivals like Star, Sony and TV18 have been much more circumspect about making their content available on third-party applications.

Quizzed on the ‘liberal’ strategy, Manish Aggarwal, business head of Zee5, had said last year that the company saw partnerships with telecom players as “the fastest way to ramp up” the number of people who were exposed to Zee5 content.

Thanks to the strategy, Zee’s digital division was able to quickly close the gap between itself and more well-entrenched rivals like Hotstar, despite being a late entrant into the world of on-demand content.

Having achieved its initial aim of getting a jumpstart, Zee Entertainment now seems to be rolling back the earlier strategy in favor of pushing its own app Zee5.

“We do evaluate, every time a deal comes up for renewal, and that’s the time we do the trade-off on what is better for us, whether to continue the relationship through a telco or go direct B2C [business to consumer],” Goenka said, about the decision.

“In this situation, we have chosen to go B2C…It’s a constant evaluation we do.”

Even though Goenka did not name the telecom company, a quick check revealed that Zee5 content has practically disappeared from JioCinema — the video-on-demand app from Reliance Jio, as well as from Vi Play — the content app from Vodafone Idea.

On the other hand, Zee’s on-demand content is still available on Xstream, Bharti Airtel’s on-demand video app.

Nevertheless, even as the archived content seems to have disappeared from these apps, Zee’s live channels continue to be available on Vi Play and Jio TV.

Zee’s latest move could be an indicator of how the online, premium content ecosystem is likely to evolve in India.

Since Zee started aggressively licensing its content to third-party apps, both TV18 and Sun TV too have opened up their libraries to such apps, leaving Star and Sony as the only two operators who are pushing their own apps as the exclusive way to access their digital content.

Globally, content powerhouses have always preferred to have a direct link with consumers, instead of relying on a third-party platform like Google or telecom companies.

For this purpose, they have always tried to push their own content apps, and typically refuse to share their premium shows and content with third party apps.

This has in turn forced third-party platforms such as Netflix and Amazon Prime to invest in creating their own web-series and movies.

The situation in India, at least for now, seems to be fluid, and could go one way or the other.