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Sunday, March 4, 2012

With Ditto TV, Zee eyes a game-changer

My colleague Beryl Menezes co-authored this story which appeared in DNA Money edition on Thursday, March 01, 2012.

Zee New Media, the digital arm of Zee Entertainment Enterprises Ltd, is set to change the way television entertainment is consumed in India.

It has introduced Ditto TV, an over-the-top (OTT) television distribution platform, to provide paid entertainment content on portable mobile devices.

Initially available in cities like Mumbai, Delhi, Pune and Bangalore, Ditto TV offers ‘live’ television channels and on-demand video content on devices including mobile phones, tablets, laptops, desktops, entertainment boxes and connected TVs.

Punit Goenka, managing director & CEO, Zee, said with Indian consumers increasingly becoming mobile, smartphones and tablets have really changed the way people work, play or view entertainment.

“The need for mobile entertainment and news has only increased over the last few years. Globally, mobile television has witnessed overwhelming reception. In fact, a recent research by Nielsen said that entertainment and mobile television is potentially showing signs of becoming the first stream of choice for the consumers,” he said.

While the company did not share any investment details, Goenka said, “We have made significant investments in this initiative and will continue doing so in the years to come. Over the next one year, we are targeting a subscriber base of one million active users for mobile TV and are aiming to capture a considerable pie of the six million active 3G audience in India. In the long term, we envisage new media division (which includes Ditto TV), contributing approximately 10% to the total revenue of Zee.”

On the business arrangement with other TV channels that are being distributed on the Ditto TV platform, Goenka said, “We have modelled our business purely on revenue share. It is very similar to what is being followed already in terms of commercial arrangements with broadcasters in the direct-to-home space.”

Ditto TV will initially offer 21 channels offering premium content across GEC, sports, lifestyle, regional, news and other genres. Consumers have a host of subscription options (prepaid cards), starting with `21 per month for a single channel, `49 per month for three channels going up to platinum pack priced as `2,499 per annum for the entire bouquet. It has entered into distribution pacts with retail channels like Croma and Vijay Sales.

Vishal Malhotra, business head - digital media, Zee, said, “We are initially launching in four cities but as 3G grows we will expand to other cities and potential rural markets. The channel offering will be increased to 100 in the next 6-8 months. In another two months, we plan to get into music and movies domain, too.”

The company sees increasing internet penetration across towns, handset manufacturers bringing in new devices with larger and better screens and social media integration increasing demand.

“We are just warming up to 3G. However, devices like tablets and smartphones being in great demand already, mobile TV is bound to see compelling growth numbers,” said Goenka.

The company is simultaneously planning to introduce Ditto TV in countries including the UK, UAE, Australia and New Zealand. It plans to roll out the service in the US in a few quarters.

Ditto TV has partnered with Siemens Communication and Media Technology to develop a strong technology platform that will offer adaptive streaming.

BSNL, Zenga and Apalya Technologies are among the few others that offer mobile TV in the Indian market.

Zenga, a free platform, has a 65-70% share of mobile TV market in India. It says its revenues grew 250% over the last year since the launch and expects it to grow two-fold annually. Mobile TV currently makes up 1% of the total entertainment space.

A Zenga spokesperson said about 90% of its revenues come from 2G users and expects 4G and LTE technologies to give a push to the segment.

2 comments:

  1. Nothing new. Apalya and Mundu TV have been in this game for long.

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  2. Thanks for the comments Dilip. We did cover Apalya, BSNL and Zenga in the last three paragraphs of the story and we also have a comment from one of the existing players on the same.

    The novel factor here is that a broadcaster has launched the service which in this case is the Zee group and the market has it that Star TV is also working on a similar offering.

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