Business3 min
Zee Entertainment revenue up 13% as FIFA World Cup lifts Zee5 to record high
Football pulled viewers onto Zee5 and pushed digital revenue to Rs 630 crore, but the cost of the rights and new bets left Zee's margin at just 3.2 per cent.
Zee Entertainment Enterprises Ltd grew operating revenue 13 per cent year on year in the July-September quarter (Q2 FY27), and football did most of the work. The FIFA World Cup drove people to its streaming app Zee5. The price of those rights, though, squeezed profitability: Ebitda was Rs 70.8 crore, a margin of 3.2 per cent, and profit after tax was Rs 45.6 crore.
Zee5 was the clear winner. Digital revenue more than doubled from a year earlier and rose 37 per cent from the previous quarter to Rs 630 crore, the highest the business has ever reported in a quarter. Even after heavy marketing spend, the digital arm made an Ebitda of Rs 41.6 crore. CFO Mukund Galgali said the unit economics are strong and he expects the momentum to continue into the second half.
The viewing numbers backed it up. Zee says full-tournament reach grew about 41 per cent over the last World Cup, even though many matches kicked off at awkward hours in India. Total reach across platforms passed 400 million, and roughly 83 per cent of FIFA viewing happened live on Zee5. The company holds FIFA rights until 2034 and has also picked up India rights to Germany's Bundesliga and Italy's Serie A for five years.
The big question is whether fans stay once the final whistle blows. Galgali said 35 to 40 per cent of subscribers who joined for FIFA have renewed. Because most World Cup packs ran for a quarter rather than a year, management expects the surge to taper. It does not expect subscription revenue growth to hold at this quarter's 30 per cent, but it promises a faster pace than before from the second half. Zee did not say how much FIFA earned, only that most of it came as subscription money, since football leaves little airtime for advertisers.
Advertising, long a sore spot, held steady. Ad revenue was flat year on year and up 20 per cent from the previous quarter as advertisers returned after tensions in the Middle East eased. CEO Punit Goenka said the decline had stabilised despite high inflation and a weak monsoon. Zee also cited a 20 per cent linear network share in week 24, its best in seven years, and monthly reach above 800 million across genres.
Costs are the catch. Operating costs rose 18 per cent, driven by marketing and the FIFA bill, while Zee also funds newer bets such as kids content, live experiences, animation and micro dramas on its Bullet platform. Galgali said that without the new-venture spending, the margin would be in the mid to high single digits. Goenka asked investors to judge the sports spend "with a long-term lens". For viewers, that likely means more live sport and shows on Zee5; for investors, it means waiting for the payoff.
Read the original report at Indian Television.
