Mumbai: Zee Entertainment Enterprises is open to unlocking value in its music label business, Zee Music Company (ZMC), including through a potential demerger into a separate company and induction of a strategic partner, CEO Punit Goenka said during the company's Q4 earnings call on May 19.

"We certainly want to invest in the music business because that's the only way to keep broadening and going ahead. The question of unlocking value is always something that we keep considering all the time," Goenka said.

The comments signal Zee's willingness to evaluate options for its music business at a time when the company is increasingly betting on high-growth adjacencies such as over-the-top (OTT), music, studios and live events amid slowing growth in its core broadcasting business.

The company entered the music business through ZMC in 2014 and has built it from the ground up in a hypercompetitive market dominated by legacy Indian labels such as T-Series, Saregama and Tips Music, alongside India operations of global players including Sony Music, Universal Music and Warner Music. Goenka suggested Zee remains focused on scaling the business organically and sees room for growth before pursuing any major structural move.

"Compared to my competitors, we are still a very small player and we will keep investing and going ahead on that basis. But if opportunities come, why not? We will always evaluate and look at those," he noted.

A potential demerger or strategic investment could help Zee unlock value from a fast-growing asset at a time when its traditional television business is witnessing slower growth. "Profitability in the music business remains healthy and we continue to diversify our catalogue across additional language markets," said deputy CEO Mukund Galgali.

ZMC currently has 176 million subscribers on YouTube and 217 billion video views on the platform, backed by a catalogue of more than 20,000 songs. According to industry estimates, Zee generates upwards of Rs. 400 crore annually from its music business.

Listed music labels such as Saregama and Tips Music currently command market capitalizations in the range of Rs. 7,500 crore to Rs. 8,500 crore. Global labels such as Universal, Sony and Warner also see India as a key market due to its large digital user base and deep talent pool.

India is the world's 14th-largest market for recorded music, though it ranks second after the US in terms of total on-demand streaming, including audio and video. According to FICCI-EY, the Indian music industry generated Rs. 5,900 crore in revenue in 2025, driven by subscription and digital advertising growth, and is expected to rise to Rs. 7,500 crore by 2028 at a CAGR of 9%.

The industry has benefited significantly from growing smartphone penetration, cheaper internet access and rising consumption across audio and video streaming platforms, while gradually pivoting from an advertising-led free model to subscriptions.

Mumbai: Zee Entertainment Enterprises Ltd has filed a copyright violation case against FSN E-Commerce Ventures, the owner of beauty and fashion retailer Nykaa, in the Delhi High Court.

Citing the Copyright Act of 1957, Zee claimed that FSN E-Commerce had used the former’s songs in brand promotion in about a dozen Instagram reels without seeking permission or licensing.

Senior counsel Abhishek Malhotra and Madhu Gadodia of Naik Naik & Co, representing FSN E-Commerce, however argued that Meta Platforms, Instagram’s parent and Zee’s licence partner, should be included as a necessary party.

The lawyers for Nykaa stated that Meta provides licensed music to all users as a standard feature and that using Instagram’s native music tools falls within the licencing agreement between Instagram and Zee. They also argued that without Meta’ involvement, a licensing framework cannot be properly reviewed. They said the order to remove content cannot be effectively enforced since only the platform has the authority to mute audio, remove content, or restrict access.

FSN E-Commerce informed the court that the twelve identified Instagram reels have been removed and are no longer accessible to the public.

Harsh Kaushik, the counsel for Zee Entertainment, instructed by Anushree Rauta of ANM Global, argued that the licensing agreement with the social media platform is for non-commercial use, whereas any commercial use requires prior approval and payment.

Zee Entertainment declined to comment stating that the matter is sub judice.

In the past two years, there have been three similar cases of music copyright violation. These include Sony Music-Myntra, Saregama-Emami, and Sony Music-Marriott Group.

Lack of clear understanding between personal expression and commercial exploitation of music is one of the key challenges resulting in copyright violations.

“Today, brands routinely collaborate with influencers and creators to produce “organic” or “branded content” that blurs the line between personal expression and commercial promotion,” said a leading lawyer requesting anonymity. “However, under platform policies, such collaborations, where there is any exchange of value, constitute branded content which falls in the realm of commercial use.”

Due to a lack of strict compliance, the Indian music industry is losing Rs8,000-10,000 crore annually in royalty payments, said independent music analysts. According to a senior executive at a leading music licencing platform, the music industry may earn at least Rs 3,600 crore if all commercial videos are paid a minimum fee.

“A popular song drives engagement in a reel or a video by two times,” said Gaurav Dagaonkar, cofounder and CEO at Hoopr, a leading platform for music licensing which serves 125 brands in securing licensed music.

“When companies use music owned by labels in promotional content of their brands, they don’t realize that they are using intellectual properties (IPs) of labels. So, when brands use music without labels’ permission, they deprive labels of revenues emanating from licencing music.”

Some labels attribute low awareness among companies about the nuances of music copyright violation.

“Such cases create awareness among companies about music copyright violation,” said Shivansh Jindal, CEO, Merchant Records, a label launched by music composer duo Salim-Sulaiman. “Today, we live in a digital world where music is democratized. So, companies may not fathom the gravity and consequences of using music of labels or independent artists without their permission or paying them.”

In the Zee-FSN E-Commerce case, Justice Tushar Rao Gedela granted on April 30 two weeks to FSN E-Commerce to file its response and gave a week to Zee to reply. The next hearing is slated for May 26.

Zee Entertainment Enterprises has invested over Rs 6,000 crore in its over-the-top (OTT) platform, ZEE5, since its launch in February 2018, according to a senior company executive.

The company is now focused on reducing ZEE5’s losses and guiding the platform toward breakeven, with a target to achieve this in FY26. In FY25, ZEE5 reduced its EBITDA loss to Rs 548 crore from Rs 1,105 crore a year earlier, while revenue grew 6% to Rs 976 crore.

“The reality is that there has been a lot of investment in the company in the past, but mostly in ZEE5. About Rs 6,000 crore plus cash has been invested or gone towards ZEE5,” said Vikas Somani, Head – Strategy & Investor Relations at Zee, during the "Ask Me Anything" conference call on July 3.

Reflecting on past strategy, Somani acknowledged that ZEE5 had once relied too heavily on content spending in hopes of rapid subscriber growth.

“Unlike in the past, where Zee followed the herd mentality and believed that heavy investment in content would automatically bring in subscribers — that’s not the trick anymore. We’ve now devised our own strategy, and that’s how we are approaching it. It’s still early days since the launch of our multi-language packs, but the results have been promising, and that gives us confidence for the future,” he said.

Deputy CEO and CFO Mukund Galgali said the company is not just looking to break even, but to establish a clear path to profitability. “A lot of investments have gone into this business, and we don’t want to talk about breakeven alone. It is actually about achieving profitability,” Galgali noted.

The company has set FY26 as the target year for break-even in its digital segment and is taking steps to support that objective. “We have recently launched seven language-specific content packs on ZEE5 in seven Indian languages. This will be our differentiator and USP. I believe we are in a sweet spot to cater to mass audiences in India — something no other OTT platform has provided so far,” Galgali said.

The company also plans to triple the volume of content on ZEE5 compared to last year, expanding its multilingual catalog to increase reach and relevance. However, the company does not expect a significant increase in content spending, anticipating only moderate growth.

“We have enhanced our content library by expanding into multiple languages, and this will only increase. That clearly remains a focus area for us. Sports, of course, will be evaluated on a case-by-case basis,” Galgali said.

Zee Entertainment Chief Content Officer Raghavendra Hunsur said that over the next two months, the company plans to launch around 30 shows on its linear TV platforms and more than 10 on ZEE5.

“So we have lots of mini-series happening — which doesn’t mean small in size. It means deep in stories and authenticity, but the stories are told not with mindless extravaganza, but with a deeper understanding of culture and the needs of the market. And that’s on ZEE5,” he added.

Zee has also invested in a new short-form content platform called Bullet, which will be available in multiple Indian languages. “This is a new concept. Even in the beta testing phase, we are among the top 15 entertainment apps. So, we look forward to building this as one of our key products,” Galgali said.

Hunsur said the platform will be offering 161 micro-dramas through Bullet. “It’s 161 micro-dramas — 60 seconds, 60 episodes kind of content,” he explained.

Somani said the company is developing Bullet as a short-form content platform and sees it as a future growth driver.

Mumbai: Zee Entertainment Enterprises plans to allocate 40% of its free cash flow (FCF) toward growth capital for regional content, music, digital platforms, and international expansion, as part of its latest strategic roadmap shared with investors.

In its investor presentation, Zee said it will also set aside 25-30% of net profit for dividends. It will also direct 5% of growth capital for research and development in content creation.

For FY25, ZEEL reported a net profit of Rs. 679 crore and a normalised FCF of Rs. 882 crore, or 1.3 times its profit. Cash and cash equivalents stood at Rs. 2,400 crore as of March 2025.

The company said its investments would primarily focus on core business areas, targeting a 2-3 year payback period, with active participation from the board in evaluating opportunities. Zee has identified several areas for potential growth, including syndication, user-generated and short-form content, improved monetization on its OTT platform ZEE5, and deeper engagement with regional audiences. Unified content creation across TV and digital is also a part of the strategy, with efforts to scale both long- and short-form formats.

Additional focus areas include strengthening its direct-to-consumer (D2C) and intellectual property (IP)-based offerings, increasing content in films and music, and exploring new areas such as live events.

ZEEL also said it would enhance corporate governance, work on strengthening its HR policy framework, and evaluate value-accretive M&A options to support scalable growth

 "We are capitalizing on this strengthened foundation to drive future growth by balancing investments with a healthy margin profile. Our efforts remain directed towards sharpening the content, driving reach across platforms, and enhancing monetization through existing and newer avenues," Zee Entertainment CEO Punit Goenka said during the company's Q4 earnings call on May 8.

In FY25, ZEEL's advertising revenue declined by 11%. To offset the softness in ad revenue, the company aims to diversify its client base by aiming to double contributions from retail advertising by FY28.

This, the company said, will include structured ad deals involving equity partnerships, along with localized advertising strategies such as geo-targeting and influencer-based campaigns.

The company is also working on building leadership capacity, combining internal promotions with targeted external hiring. ZEEL is expanding its ad-sales team and will also have dedicated Chief Business Officers for areas such as syndication, short-form video, user-generated content, and gaming.

The company has 2,500 employees, having laid off 15% of its staff last year in a cost-cutting exercise.

Mumbai: TV broadcasters are implementing inflation-linked increases in TV channel bouquet rates to offset rising content costs and a subdued advertising environment. However, concerns persist about subscriber churn due to the growing popularity of over-the-top (OTT) platforms and DD Free Dish.

Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises (ZEEL) are among the major broadcasters that have published updated broadcast tariffs. Star India, also known as Jio Star, is expected to release its tariff soon.

Both SPNI and ZEEL have raised the prices of their base bouquets by over 10%. Jio Star is anticipated to implement a significant hike due to its strong presence in general entertainment and sports. The new pricing is effective February 1.

SPNI's Happy India Smart Hindi pack now costs Rs. 54, up from Rs. 48. However, the bouquet now also includes a Hindi movie channel, Sony Max 1. Meanwhile, Zee Family Pack Hindi SD now costs Rs. 53, compared to Rs. 47 previously, and includes English entertainment channel Zee Cafe.

The price hike comes at a time when the pay-TV industry has declined to fewer than 100 million homes, down from 120 million to 95 million in recent years. According to TRAI's latest Performance Indicator Report, the combined paid active DTH base of four private operators - Dish TV, Airtel Digital TV, Tata Play, and Sun Direct - shrank by 2.26 million to 59.91 million as of September 2024.

Distribution platform operators (DPOs) are concerned that annual price hikes by broadcasters will add to their burden, as subscribers have multiple alternatives, including premium OTT services, DD Free Dish, and YouTube, which continue to gain traction across various consumer segments.

However, TV broadcasters argue that they have no option but to increase bouquet rates despite fears of a shrinking pay-TV universe. They point out that the advertising revenue of major broadcasters remains under pressure due to slower growth in advertising expenditure (AdEx) and a shift in advertising strategies toward digital platforms. "The pay-TV universe will continue to decline even if we don't implement the rate hike, but at least we can protect our revenue by increasing the average revenue per user (ARPU)," said a senior TV broadcasting executive on condition of anonymity.

This marks the third consecutive year of bouquet price increases following the Telecom Regulatory Authority of India's (TRAI) amendment of the new tariff order (NTO) after a protracted legal dispute between broadcasters and the regulator.

A cable TV official, also speaking on condition of anonymity, described the price hike as a "double whammy" for DPOs, who bear the brunt of consumer dissatisfaction. "Price hikes by broadcasters will definitely increase churn. So far, DPOs have shielded consumers from the full impact by keeping the network capacity fee (NCF) at a reasonable level," he added.

The NCF is the fee consumers pay to DPOs for transmitting content through their networks. Bouquet rates are passed on by DPOs from consumers to broadcasters after retaining a commission.

Broadcasters are also adhering to the recent Telecom Disputes Settlement and Appellate Tribunal (TDSAT) order, which declined interim relief regarding pay channels on DD Free Dish. The regulation mandates that free channels on Prasar Bharati's DD Free Dish cannot be classified as pay channels on addressable platforms like Hathway Cable and Tata Play.