Zee TV takes a knock + Sun TV gains share

The quarterly market share data for the Zee network suggests the qoq market share loss is entirely due to Zee TV, which slipped from second position in the Hindi GE segment to fourth. Zee made up most of the loss with robust ratings gains in regional channels, though it may not sustain the strong performance of Zee Bangla Cinema (Star will soon launch its Bengali movie channel). Zee may be better placed than Sun in advertising (sustained ratings) and subscription (Chennai is yet to be digitized)

Sun presented completely opposite trends to Zee with flagship Sun TV maintaining its (unusually) high market share, but channels in competitive markets on a downtrend; the long-term trend of Sun’s loss of network market share continued yoy and qoq. Unlike Zee in the North market, which faced distribution disruptions due to digitization, Sun TV was likely not impacted given Chennai is yet to be substantially digitized (Sun TV is anyway an FTA channel in Chennai). Sun noted traction in DTH platforms (where Sun bouquet is pay) in lieu of digital cable but gains are likely to be modest until DAS is implemented in Chennai.

Digitization a net positive but not a panacea

The TAM data and analysis of Phase-I suggests that Digital penetration is over 95% in Delhi-Mumbai and 70% in Kolkata but lags in Chennai (26%). More important, small and mid sizedchannels (niche news, kids, infotainment) have gained market share compared with large channels (mass general entertainment). Nearly 60% of channels with pre-DAS share of 0-0.5% had a net 4% gain in viewership.

Niche channels/genres, which were reach- and capacity constrained in analog cable, have benefited from Phase-I DAS (see Exhibit 3; more capacity and greater reach).