TV Channels Betting Big on their Apps

Published by MBA Skool Team, Published on October 09, 2015

Youth and media are the two important factors for any brand's success being the most essential source of marketing also. It becomes easy for a product to become popular if it is within the reach of the users/customers, thus the factor “accessibility” comes into picture. In their busy life schedules, people want a source of entertainment not only at their homes but during travelling also. Listening to downloaded music and videos is an old trend nowadays, thus they want easy access to their favourite shows while they are travelling or outside their hood. With the advent of 3G and 4G services speed is not an issue for such customers, therefore channels like Sony and Star are concerned with product differentiation.

They are not only providing a source for entertainment on television but they are also introducing apps for smartphones on which people can browse their subscribed shows. In the Rs.540 billion television industry in India that accounts for approx. Rs174.6 billion of advertising revenues, only Star India and Multi Screen Media (MSM) have embraced the multi-platform strategy and launched digital avatars of their broadcast properties. Both Hotstar by Star India and Sony LIV by MSM made a debut this year earlier. Hotstar is focusing on the youth as AIB which is a famous comedy channel on Youtube amongst the youngsters provides them with entertainment that matches their expectations as well as their tastes.

Image: pixabay

Sony LIV has come up with an exclusive fiction show called “Love Bytes” which can be a hit amongst youth due to Love in the Air kind of attitude. Hotstar has signed up with AIB to create an exclusive content. It is only the differentiation in content that will them a scale as Star India has paid a whopping Rs75 crore to AIB for 20 episodes which will be shown both on air and on Hotstar App. Not only shows but the youth has an attraction towards a particular sport “Cricket” followed like a religion in our country. Star paid Rs.300 crore for the Indian Premier League digital rights for Hotstar and

TV channels and online channels on Youtube like TVF, AIB, Being Indian, etc are really popular amongst the youngsters which shows that media plays an important role in advertising and promoting a product for a company. There must be a differentiation element in the product which makes it identical within so much competitors leading the customers to purchase or consume it. To state with an example the current scenario is changing with the advent of various startups being introduced, flipkart being the most successful instance as well as motivation for the young entrepreneurs. In between all this TVF came up with the concept of making a web series “Pitchers” which showed the struggle of any team of young entrepreneur not only for coming up with an idea to open a venture, but finding investors for funding the same. The whole storyline is picturised not only to influence the youth by putting an impact also to increase their views on youtube. Thus, reaching to the customers and promoting a brand does not involve only television as online promotions are a part of making them popular.

The basic funda of marketing is to incur the costs of production by promoting the product according to the specifications of the customers. Its not important to invest lots and lots of cash in advertising but to find an effective medium of advertising. According to the Executive Vice President and head-digital business, MSM, he stated that comparing the cost of creating content for SONY LIV with that of television shows is not viable as they are not the same. Viability depends on the cost of the content and how you plan to monetize it. According to the sources in Metro cities 42% of the population uses smartphones/tablets while watching television, the number in non-metro markets drops to 36%. Chennai, Noida, Mumbai and Pune populations take the lead in this behavior. Access to Internet is at 48% with 90% of this audience also accessing it through mobile phones. Thus this shows that promoting through digital channels like TV and apps on smartphones/online are essential mediums but TV is declining nowadays. With such huge advertisements on promotions the TV channels should focus on the efficient ways of reaching the population.

According to Porter’s 5 Forces Model of Competition, SONY LIV and Star India have the following challenges :-

• Threat of New Entrants :- New channels are entering into the entertainment industry not only broadcasting on televisions but online also. Ex- TVF, AIB, Being India, &TV, etc.

• Threat Of Substitutes :- TV is not an efficient medium after the advent of internet and smartphones as accessibility to various things is now easy. Substitute for Sony and Star is the shift of the population towards online media.

• Threat Of Competitors :- According to reports Zee and Viacome18 are coming up with an innovative venture to promote their shows also introducing with a new show towards the end of this year.

• Bargaining Powers Of Suppliers :- The advertising agency always have the power to charge on the promotions on as much price as they want. Thus they always have the power to regulate the promotions. Channels must reduce their advertising costs and go for an easier option which is to go online as it’s a cheaper medium.

• Bargaining Power Of Buyers :- Consumers also have the power to consume whichever supplier’s product they want to. Consumers or viewers in this case can shift to any other channel provider if they find it more accessible and entertaining meeting their expectations.

Thus, Marketing is an essential part for promoting a product but more important is to find an essential and effective medium of reaching the viewers which not only cut their costs but also increase their revenues.

This article has been authored by Satwik Arora from Great Lakes Institute Of Management

References :-

Economic Times

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