'New rates, inventories to drive growth'

ZEE Entertainment Enterprises has posted a net profit of Rs 216.3 crore for the September quarter. And Atul Das, executive vice-president of the company, who heads corporate strategy and business development, is positive about the company’s prospects. He discusses cable, DTH, advertising and other issues with ET NOW.

How have the non-GEC channels that you currently operate performed?

I think overall we have seen a very robust increase in all our revenue streams, so even if you strip out the regional channels, which we merged from the fourth quarter of last fiscal, we have seen a reasonable strong growth which I would imagine is higher than the industry growth rate. If you look at our consolidated numbers for the second quarter, our advertising revenues have grown at 66%. We have seen a handsome growth in both our domestic cable revenues and the DTH revenues.

Are advertising rates picking up, or is it more inventory coming into the consolidated businesses?

It is a combination of both. Last quarter, we had raised our rates, and we’re seeing the effect of those higher rates coming through into our revenues this quarter. Our revenue growth, coming forward, will still be a combination of the rate growth and inventory increases coming from across the board.

Programming costs have gone up, and your margins quarter-on-quarter have slipped. How will this shape up in the next couple of quarters?

We do expect it (programming cost) to go up slightly because it is a festive season and we are likely to increase some of our original hours of programming. But I think our programming costs are well under control. If at all our margins have declined, it is largely due to sports business where we have invested by launching two very critical channels in our bouquet. One is Ten Cricket, the other is Ten Action Plus, a channel which will be focused on football. If you net out the sports business, Zee Entertainment has actually had a very good growth in operating margins, upwards of 40%.