“Going forward, there will be a sharper emphasis on frugality, with a crystal-clear focus on quality and output,” said Punit Goenka, managing director and CEO, Zee Entertainment Enterprises Ltd, in an earnings call on Tuesday. Zee, still reeling from the dramatic collapse of its merger with Sony and the on-going dispute, plans to cut costs, reduce overlaps and enhance quality to regain margins.
Goenka added, “Across verticals – including technology, content and marketing – we are implementing steps to optimise spends and enhance the return on investments. A sound recalibration of the OTT cost structure will be an integral part of this process.”
For the December quarter of FY24, ZEEL clocked a 140 percent surge in profits at Rs 58.5 crore, against Rs 24.32 crore in the corresponding period of the previous year.
Additionally, the company has recorded a 15 percent rise in income, amounting to Rs 223 crore, compared to Rs 194 crore reported in Q3 FY23.
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However, Zee, currently navigating the fallout from the terminated merger deal with Sony, experienced a sequential drop in profits, marking a 52 percent decline from the previous quarter. In Q2 FY24, the company reported a profit of Rs 122.96 crore.
In the earnings update, the company mentioned impact on cost structure due to the merger. “We had accelerated our technology and digital investments in anticipation of impending merger to be able to hit the ground running on merger synergies,” the report said.
Domestic ad revenues came at Rs 9,867 million with a quarter on quarter increase of 4.9 percent and a year on year decline of 2.7 percent.
“Domestic ad revenue was impacted by cricket during Q3. While Q3 saw some seasonal festive uptick, overall pace of ad environment recovery continues to be slow. As the Ad environment stabilizes, we are confident in our ability to accelerate revenue growth,” the report said.
Goenka said, “We will take steps to increase value delivery to our advertisers, apart from exploring alternative content monetisation avenues,” which, he said, includes leveraging the strength and reach of ZEEL’s platforms.
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