MESSAGE FROM THE MD & CEO
Dear Shareholders,
The last financial year has been a dynamic one for us. A year where we
started afresh, penning a brand new chapter in our book. This new chapter, ZEE 4.0,
encompasses a new pattern of thoughts, a new wave of emotions, a new connection with our
consumers and partners, and a new strategic vision for growth. The Company has been on a
transformative journey, and I am glad to share that we have implemented several key steps
in line with our 4.0 vision, propelling us on a stronger path to greater success. The year
was also an unpredictable one, challenging the resilience of not only the businesses, but
also of us as human beings. It is indeed astonishing to note the amount of resilience that
exists in human nature. I can say with conviction that both are bouncing back strongly
from the effects of the pandemic. The Media & Entertainment Industry continues to
display immense potential, and as an industry leader, ZEE is well-poised to capture these
opportunities in India and across the globe.
Turning the ZEE 4.0 vision into reality
I previously shared my vision for ZEE 4.0 with all of you through an
Open Letter, and the last year has been spent turning this vision into reality across all
aspects of our business. I firmly believe that growth doesn't come from a single
action. It is a consequence of persistence, courage and hard work. Having taken a
long-term view of the technological and societal changes infringing the Media &
Entertainment ecosystem, we embarked on the ZEE 4.0 transformative journey to unveil a new
organisation design and a clear-cut growth strategy for the Company.
In line with the 5G approach focusing on Governance, Granularity,
Growth, Goodwill and Gusto, we have set the wheels in motion of our 5-year strategy in
consultation with a global strategy advisor. For ZEE 4.0, the sky is the limit. The aim is
to transform into the largest and most profitable Media & Entertainment company in
South Asia. We have set our eyes to become the world's leading global content company
from the emerging markets, driven by content leadership based on innovation and
creativity.
Our journey to achieve these targets and go beyond, has already begun.
Unparalleled efforts have been taken to transform the organization into the ZEE 4.0
version across the 5Gs. We took key steps in the previous year to reconstitute our Board
with diverse members and introduced new policies that strengthened our Governance,
mitigated the risks and safeguarded our business interests. Additionally, we also took
proactive steps to add a deeper layer of Granularity in our reporting and in our
communication to shareholders, thereby maintaining a stronger focus on transparency.
A key aspect of our future strategy sprang into action during the year
as we unveiled a redesigned organisation structure - an integrated and synergised engine
to drive higher Growth and profitability. With customer centricity at the fore, we broke
down the vertical walls to create integrated teams for Content, Digital, Revenue,
International and Movies. This new structure will enable us to enhance our content
creation capabilities across screens, simultaneously ensuring a seamless delivery and
monetization mechanism. Content continues to be the core of our business, and a
‘Content First, Cluster Centric' framework will further enhance our cultural
connect and deep-rooted storytelling that is a mirror to our consumers' lives across
platforms. We are also witnessing exponential growth in the digital ecosystem, led by
state of the art technology, immersive viewing experiences and data-backed innovations. To
succeed in this environment, we have integrated our digital assets under one roof as we
endeavor to strike the right balance between technology, data and talent to capture these
growth opportunities. Similarly, becoming a leading global Company requires us to relook
at our strategy in the international markets. The global Media & Entertainment
landscape is evolving at a faster clip, and we need to not only keep pace with this
change, but move faster.
ZEE is amongst the few Indian companies to establish a strong foothold
in the global Media & Entertainment space, and we believe our deep learnings and
insights from India will also help us devise a strong local strategy to cater to the
audiences across the globe. Amidst this, with all our revenue engines firing together, it
is bound to create music to our partners' ears as we enhance the solutions offered to
them while parallelly focusing on wallet monetization and user acquisition. The Movies
& Music business continues to post a strong performance, and a streamlined operation
will certainly lead to a faster decision making process, sharper visibility on the
long-term growth of the movie business and captialising on the monetisation opportunities
available across platforms and markets.
The goal for us at ZEE is to not only be widely acknowledged for our
business acumen, but also our ability to create positive impact in the community through
our noble work. We rolled out our new Corporate Social Responsibility (CSR) Policy with
Women Empowerment, Protection and preservation of our Arts, Crafts, Culture, National
Heritage & Monuments, Disaster Relief & Recovery, Integrated Rural Development and
Initiatives to improve Public Health through food quality as the core focus areas. Like
our business, our values are extremely critical to us and significant interventions have
already been taken in each of these areas for the overall betterment of the society under
the pillar of Goodwill.
Even as we formulate our strategies for the future, ZEE 4.0 is
incomplete without its People. At the end of the day, one bets on people more than
strategies. In this new phase of ZEE, driving the business with Gusto requires us to
foster a stimulating working environment that encourages our people to ideate, collaborate
and innovate. Keeping this in mind, we unveiled a transformed team structure with strong
leaders at the helm whose collective experience and expertise will be instrumental in
achieving our set goals for the future. We also continue to build a strong employee value
proposition to attract the best talent and build an equitable workplace for all.
This is just the beginning, the best of ZEE 4.0 is yet to come. The
future belongs to us. We are on a firm footing and committed to maximizing our business
potential and delivering exceptional value to the viewers, partners and shareholders going
forward.
Business continuity in an ambiguous year
The disruption caused by Covid-19 continued to hamper lives,
livelihoods and businesses across the globe. While there did emerge a ray of sunshine as
we beat the first wave to attain a sense of normalcy, we donned the battle gear once again
to fight a more ruthless second wave of infections. Amidst this sentiment, it was
commendable to see the relentless passion and agility displayed by our teams. This enabled
us to not only maintain business continuity and deliver the best entertainment across our
platforms, but it also provided a conducive environment to explore new opportunities.
The COVID-19 pandemic continues to have a calamitous impact on the
healthcare infrastructure of the Nation as well, and we remain committed to fighting this
pandemic together. In addition to providing essential medical equipment and daily meals
for the affected families across states, we also stepped up our efforts to build and
donate a Dedicated Covid Health Centre (DCHC) to the Thane Municipal Corporation in
Maharashtra.
Amidst this, the safety and well-being of our most valuable asset, our
Human Capital continued to be a priority for the Company.
Several measures have been rolled out to support our employees and
their families affected by the pandemic. These include a Covid Home Care Support covering
various aspects of medical care including doctor consultations, diagnostic tests and
reimbursement for vaccination costs, along with a 24x7 dedicated helpline number and
ambulance support.
Out of destruction and chaos rises hope, like a phoenix from the ashes,
to soar triumphantly through the air and we are positive that the Nation will emerge out
of these grim times very soon.
GUSTO
ZEEL owes its tremendous success over the past couple of decades to the
zeal, passion, and commitment of its people. Without Gusto it would be impossible
to relentlessly pursue the ambitious goals we have set for our organisation.
With a right mix of entrepreneurial spirit, cultural diversity, and an
energising organisation culture, ZEEL has continuously strived to make it an attractive
place to work for top talent. Last year, we redesigned the organisation structure to
achieve the aspirations set in the ZEE 4.0 approach.
GOODWILL
Creating Goodwill is important in every human endeavour, but for a
business its importance cannot be overemphasised. Given the symbiotic relationship and
inextricable connections with society, a business' Goodwill determines its long term
success and value creation.
ZEEL has used its massive reach to take up social issues through its
stories and reaching out to the audiences with an aim to make a difference in their lives.
ZEEL has been at the forefront in the fight against COVID by collaborating with various
state governments across the country.
GRANULARITY
Granularity in disclosures of business outcomes is crucial to enable a
fair assessment of performance with respect to values enshrined and strategy pursued.
ZEEL has always been persistent in communicating objectives, strategy,
and progress to all its stakeholders. The Company endeavours to align with best global
practises by enhancing disclosure of business KPIs, ESG initiatives and CSR activities.
GROWTH
Growth is the driving force for any business to succeed and achieve its
objectives - from satisfying consumers' needs to delivering long-term shareholder
value.
Over the past three decades, ZEEL has delivered exemplary growth,
expanding from a single channel TV network to India's leading multi-platform content
Company. As we speak, ZEEL is increasing investments to lay the foundation for strong
growth with a focus on long-term profitability.
GOVERNANCE
Governance in essence is protecting interests of varied stakeholders of
the business with a focus on long-term value creation. Trusteeship, responsibility, and
transparency would be the cornerstones of our governance framework. ZEEL would endeavour
to imbibe these principles in every decision and action.
Over the last year, we have strengthened our Board with induction of
eminent names in the field of advertising, digital business, finance, and human resources.
The Board has designed various policies to strengthen the decision making process, manage
risks and balance interests of different stakeholders.
The Year gone by
FY21 was an unprecedented year on all counts, and it challenged us at
several levels. While we tried our best to ensure normal operations amidst the disruption
caused by the pandemic, we couldn't insulate the business from the economic slowdown.
During the year, our revenues declined by 4.9%, primarily due to a 19.9% degrowth in
advertising revenues. After a massive disruption in the first half which saw our
advertising revenues reduce by almost half, there was a sharp rebound in the later part of
the year leading to a 6.8% growth in the second half. This shows the resilience of our
business and our ability to navigate temporary setbacks created by external factors. The
subscription revenue saw a comparable growth of 5.2% during the year, primarily driven by
ZEE5. Due to the embargo on change in channel pricing imposed by the court, television
subscription revenue growth was impeded. We took measures to reduce discretionary spends
to soften the impact of revenue degrowth, however, as the competition in all the segments
we operate in remained intense, we did not reduce our investments in content. As a result,
EBITDA margin of the Company declined to 25.0% for the year. As stated in our earlier
communications, we are entering a phase of focused investments in television, digital and
movie production businesses, which will help us to strengthen our positions in each of
these verticals. Given the impact of second wave of COVID in the first quarter of FY22,
our endeavour is to strike a fine balance between growth and profitability in the current
fiscal.
During the year, our television network lost its leadership position,
both as a result of lack of original content in the first quarter, as well as weak
performance of our channels in Hindi, Marathi and Tamil markets. Our teams are working
round the clock to revamp the programming line-ups which should help us bounce back in
each of these markets. We continued to expand our broadcast portfolio with the launch of
two new channels during the year. The pandemic gave an opportunity to all emerging digital
businesses to get a wider audience sampling. Our digital offering, ZEE5, also leveraged
this opportunity to grow its user base during the year. As India's biggest producer
of digital exclusive content in the country, ZEE5 scaled up its content library, along
with enhancing the consumer experience on the platform. It also continued to expand its
presence outside India, which will help us remain relevant in markets which are
transitioning to digital. As a result of cinema halls being closed for most of the year,
plans of Zee Studios and Zee Music Company, both of which primarily depend on new movie
releases, were impacted during the year. Zee Studios launched ZeePlex, a multi-platform
pay per view offering, enabling audiences to watch latest movies from the comfort of their
homes. Zee Live also launched several digital entertainment IPs while on ground events
remained restricted. Despite the challenges faced by us during the year, it is innovations
like these that give me the confidence that we will be able to achieve the audacious goals
that we have set for ourselves in the near and long-term.
Vote of Thanks
My heart swells with pride to see the support we have received from our
teams in this unprecedented year. I would like to thank each member of our ZEE family for
their resilient spirit displayed in making ZEE a more agile and responsive institution.
This success is yours to rejoice and revel in!
I am also immensely grateful to our consumers, partners and
shareholders who walked this new path with us, as we transformed into ZEE 4.0. Our new
journey has begun and the direction is upwards, with exponential growth for the Company.
The aim is to enhance our profitability and continue to grow ahead of the industry,
capturing all the new opportunities that emerge in an ever-evolving business landscape.
With ZEE 4.0, we are predicting the future by creating it ourselves.
Because, the future belongs to those who believe in their dreams and dare to take risks.
| Yours truly, |
| Punit Goenka |