Essel’s digital media assets being restructured

Essel’s digital media assets being restructured
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First Published: Mon, Aug 17 2009. 09 58 PM IST
Updated: Mon, Aug 17 2009. 09 58 PM IST
Mumbai: Essel Group, known popularly as Zee Group after the television channels it runs, is restructuring and streamlining its digital assets.
One option being discussed is to bring Essel’s stand-alone digital media firm, Digital Media Convergence Ltd, under another group company, Zee Entertainment Enterprises Ltd, to serve as a back-end resource for its Zee TV channels, said an executive as well as two former employees with the digital firm.
“This is mainly due to poor performance, since it failed to break even in its first three years of existence,” the executive said.
Digital Media manages content and marketing for Essel Group’s various digital assets, the most prominent being its entertainment website, Mypopkorn.com. The website could also become a division of Zee TV, he added.
Mypopkorn.com, launched last April, has aggregated at least nine million videos and carries both Hollywood and Bollywood-related buzz, and is watched by at least 2.5 million visitors a month, the company says in a statement.
As part of the streamlining, Essel Group in July asked 30 employees of Digital Media to resign, said the executive and the former employees mentioned earlier. Many former and existing employees are still awaiting salary clearances, they added.
“The company informed us that they were cutting down people because of financial troubles related to the economic downturn. They promised us the salary for the month we worked for and an extra month’s basic salary. They have yet to clear our dues,” said one of the two former employees.
“The company has heavily invested in a new platform called digital asset manager... The platform has had its first successful alpha test in June 2009 and based on the positive results, the changes in the company structure have taken place,” said Vishal Malhotra, chief executive, Digital Media, without commenting on the job cuts or other specifics of the restructuring.
“This intrinsic value created with this success has also allowed fresh equity participation. This equity change has also delayed some key payouts,” he added.
Malhotra said Digital Media will continue to aggregate and maintain various digital assets and Mypopkorn.com would see a greater interaction through the new equity structure.
Essel Group’s listed companies include Zee Entertainment Enterprises, Zee News Ltd, Dish TV India Ltd, Wire and Wireless India Ltd, Essel Propack Ltd and ETC Networks Ltd.
Early signals of pressure were seen in a March email sent by Ishwar Jha, then chief executive of Digital Media, to employees.
“We together enjoy great working conditions and as most of you know, the recession is hitting the economic condition in India as well as worldwide big time... As I have reiterated this to all of you several times in past, it’s important that we all work together to stay productive in this time... We have several projects that are taking time longer than anticipated...” Jha had said.
Prasanth Kumar, managing partner at media specialist, GroupM India Pvt. Ltd, part of global advertising firm WPP Group, said broadcasters likely to make such cuts in their digital arms are those who have not been able to monetize them successfully.
“TV18 Group has a whole host of successful websites, which is why they are still maintaining a lot of employees. The same cannot be said for most of the general entertainment broadcasters,” he said.
anushree.m@livemint.com
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First Published: Mon, Aug 17 2009. 09 58 PM IST