Dominate Sony? Disrupt Zee? Displace Star?

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Even Zee has rolled up its sleeves and is launching a slew of new programmes. Three of them – Choti Bahu, Maa & Rang – are expected to debut soon. And one should never forget the strong comeback Zee made and the way it threatened Star Plus’ leadership a year ago. Talking about the new GECs, Zee TV’s Programming Head, Ajay Bhalwankar told 4Ps B&M, “New channels have focused on distraction based programming, which has got them viewers but that definitely cannot get them viewer loyalty that we have developed over the last 14 years.”

Sony’s Marketing Head, Khan agrees, “It’s too premature to say that Colors can lead the GEC race or not. Earlier NDTV Imagine and 9X also got higher ratings but they couldn’t sustain it and now they are behind us.” Sony has got its weekend ratings stronger due to Indian Idol 4. “We have got our weekend programming right. We are number one or two on weekends and now we are focusing on getting our weekdays programming right,” adds Khan. Sony has not been able to make a strong impact for the last one year. “Sony has continuously been trying and launching new shows different from the typical Saas-Bahu drama (like Sujata, Kuch Is Tara, and more recently Aanthva Vachan) but nothing has clicked strongly for them so far,” says a media analyst. Right now Sony is focusing on launching programming based on female protagonists but with a regional set up. One such soon to debut programme is Meet Mila de Rabba, which is built around a Punjabi set up and feel. One may see a lot of weekday programming based on different regional areas on Sony in coming times.

Undoubtedly, Colors is promising both for audience and advertisers. As Nayyar admits, “Earlier when a marketer needed reach they had to look up only to Star, Zee or Sony, but Colors has come as a good break with a strong reach.” The only challenge for them is to sustain their performance. Basabdatta Chowdhary, COO, Madison Media warns, “My only word of caution is that once Big Boss (which is a huge rating grosser for Colors) goes off air in November, this may impact the ratings of the channel.” So the replacement for Big Boss will decide a lot for Colors.

Moreover, with ADAG’s Big Broadcasting to launch two channels in the category by the year end, the competition will get even more intense. Affirms Rajesh Sawhney, CEO, Big Entertainment, “We don’t believe in doing what others are doing. We will not only sharply define our target audience but our programming too.” And as ADAG’s aggressive DNA goes, Big Broadcasting will surely do its best to disrupt the segment and pose a bigger threat to Star and Zee. At that time, the biggest challenge for Colors will be to hold audience interest and not fade out after the initial kick it got.

Interestingly, Colors and other new GECs have expanded overall entertainment viewing on the telly. Before the entry of Colors, 9X & NDTV Imagine, the category was averaging about 950-975 GRPs. Now the category has regained some share from movie, news & kids channels and is averaging at 1,200 GRPs over the past 4-6 weeks – a clear growth of 23% in a years’ time. Do we hear GEC honchos setting aside rivalries for a while and unanimously yelling the hurrah?

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Consumer’s perspective; yes, they still matter

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Despite what you, I, my cook and my dear SUV manufacturers were thinking all these years along, strangely, consumers do matter [damn you Kotler]! Going back to a historical time line, when Honda launched the third generation of its SUV, CR-V in India and made waves in the automotive circles, it was not serendipity at all. Masahiro Takedagawa, CEO, Honda Siel, had told this magazine, “The all-new CR-V is targeted at a young audience with an average age of 35-40 years. It is meant for people who are educated, tech-savvy and adventurous.” SUVs [Sports Utility Vehicle, for sweet mercies] were the kind of words which were supposed to infuse a ‘virile adrenaline powered boost in your body every time you heard them pass by’... Uh, ok, I copied that term in the quotes from an auto manual. But hey, cynicism apart, the fact is that most creators seemed [and still seem] to describe an SUV from my planet, Mars! The rationale of providing a diesel engine, four wheel drive, wheel locking and robust multi-variate technically super advanced gadgetry was that when one would take out the SUV off-road, the vehicle would simply not break down!

The small little mistake was, the majority of consumers were and still are not buying the SUVs for taking the vehicles off the roads. A typical SUV buyer still wants a larger then life ‘big’ vehicle which looks ‘big’, has ‘big’ tyres, ‘big’ bumpers, and most importantly, exudes ‘big’ class but would never perhaps want to take it off the roads. The maximum that SUV buyers – and my boss – finally got down to do was to travel interstate on pristinely maintained highways. Unfortunately, there were too few of even such buyers. Leading to companies even testing out the Softloaders. When Toyota launched the Prado in India, it preferred a petrol engine instead of a diesel and so did Suzuki with the XL7.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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WHY FOUR ISN’T LUCKY FOR AMERICAN EXPRESS...

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After its incorporation as a new entity, AEBC in 2008, its core focus in the country – that of providing plastic money services to its Indian consumers – was back. “The Indian card market provides ample of opportunities to players like us; thanks to the huge untapped market with increasing consumers’ disposable incomes, buying habits et al,” explains Hennin. The consequent rise in consumer expenditure, growing affluence levels and consumer sophistication have all led to a robust growth in its credit card business. So far so good. But the question really is: does it make sense for AEBC to focus so much on its credit card business in India, while financial companies the world over are complaining that debt levels have risen? Surely, statistics prove so. As per the 2007-08 RBI Report, the total value of transactions made on credit cards during the year amounted to an incredible Rs.579.58 billion, an increase of 40.1% as compared to 2006-07. Moreover, the total number of credit card transactions too rose by a swashbuckling 34.6% y-o-y to touch an incredible 228.2 million during 2007-08. Now this compared to a poor 8.6% growth during 2006-07 is definitely good news for AEBC! As per N. Wadhwa, Director, SKI Capital, “The credit card market is growing at a healthy rate of 30-35%. The total card market today in terms of billings is growing at 30-35% p.a. and is estimated to reach over $20 billion this year. It definitely holds great promise for those who want to bet on it!” Also with just 2% of total consumer spending in the country being made via cards, the future looks anything but gloomy!

AEBC today caters to its consumers’ needs through cards like the Green and Gold Charge Cards, Green and Gold Credit Cards, Airline co-brand Cards, Corporate Charge Card, Platinum Charge and Credit Card. One unique strategy from this plastic money provider which helps it minimise defaults to negligible (as company officials claim) is that it only caters to a niche audience. Surely, this would not help it garner market share but it would give it the critical hedged position needed in a financial market where you deal with commodities (in this case credit) which never guarantee you immunity.

“In the current scenario, India presents unprecedented opportunities to Amex to further its strategy to own and serve the premium segment. Amex’s strategy to work with the premium segment fits in very well in the present Indian environment,” clarifies Amit Dutta, VP, Brand & Customer Engagement, American Express India. But as encouraging as the current situation sounds, the low income levels in the country makes work difficult for Hennin. “With others too targeting people from all possible segments, the competition only gets tougher for American Express,” explains A. Jainani, VP (Research), Khandwala Securities.

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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One more, below the belt!

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Maheshwari agrees, “The launch of Google Chrome could shake the dominant position of Microsoft in web browsers industry, which accounts for more than 70% of the browser industry.” However, the short term impact doesn’t seem much severe as much of the systems in work across the world have Internet Explorer as their default web browser. Switching to other browsers isn’t that easy for users when they are comfortable with an existing one. Its initial move cannot be considered as an assault on Microsoft’s Internet Explorer, but the long term strategy may indeed be an assault on other products, like Office.

Currently, a majority of the browser market is being held by Microsoft, followed by Mozilla, and thus, leaving just 3% to 5% share of the browser industry for other players like Opera, Safari, and Netscape. Google already enjoys a dominant position in the search engine market, and combined with its own web browser with differentiated features, it holds the true potential to bring about a ‘disruption’ in the industry, resulting in restructuring of its market landscape. As competition often results in innovation of one sort or another, it will further lead to intensified competition in the industry, which, in turn, would lead to the introduction of more improved and innovative user-friendly features in the industry. Maheshwari believes that “Chrome’s impact on other browsers will be quite noticeable if things go well as per planned by Google.”

While the competition between Microsoft and Google is likely to produce many improvements for consumers, the likely fallout from the battle will be other browser makers that have only recently begun to pry market share away from Microsoft. Firefox could become a victim of “friendly fire” from Google as many of its users are the same early adopters who are most likely to switch and try a new browser. Other browsers, like Opera and Apple’s Safari might suffer loss of popularity too. The impact of Chrome on Opera will be minimal as Opera’s growth on the desktop is limited. But Opera will face challenges in the mobile space (where Opera’s potential lies) when Android or mobile version of Chrome will be released at the end of this year.

So far, the launches of new browsers by other companies have not been able to dent Microsoft’s dominant position. Only Mozilla has been successful in snatching a small chunk of the industry from Microsoft.

But with the entry of Google, one can expect some serious browser wars now. And while “who should we be rooting for” in this war is still a matter of ‘economist’ speculation, one thing’s for sure - considering how Google is moving towards destroying Microsoft’s citadels step by step, the latter needs to be very very worried...

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Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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Who says number three is unlucky?

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The problem with new GECs it seems is that they are not offering any differentiated programming. As SAB’s Anooj puts it, “Their programming is like the Amar, Akbar and Anthony programming. They pick a little bit of everything from every channel.” Unfortunately, this shortcut isn’t long-lasting. The only way forward for these new channels is to offer differentiated content. “They can get into offering content of just one genre - maybe like a channel with only thriller shows or only comedy et al. Copying will only destine them to doom,” says a media analyst.

So will these new GECs survive or shut shop? “A lot of them are going to be out of business. Because it’s a big boys game,” feels a confident Kunal Dasgupta, CEO, Sony Entertainment Television. Star Network’s spokesperson Yash Khanna avers similar. “It’s easy to grab audience attention when a channel is launched, but it’s difficult to sustain that attention over a long period. That’s their challenge,” he quips.

But Star and Zee should not become too complacent either. While 9X and NDTV Imagine’s launch did not hurt their respective channel share much, the coming of Viacom-18’s Colors has ruffled their feathers some. The share is no longer being pruned from Sony alone. August saw Star’s share come down 6% over last month to 26%, while Zee’s share fell 2% to sit perched at 15% in the month (source: aMap).

Given that Anil Ambani’s Big entertainment is also all set to to debut on the Indian teletube by the end of this year, Rajesh Sawhney’s (CEO, Big Entertainment) words may be prophetic. “You need not only sharply define your target audience but also your programming… One should really not have Ramayan and reality shows on one platform.” Big plans to launch four to five entertainment channels targeting different genres within entertainment, of which two are scheduled to go on air by December this year. Adds a confident Rajesh, “No point in copying others. We don’t believe in the Balaji model. The paradigm will change soon.”

Clearly, audiences are becoming restless and channels need to wake up and smell the coffee. Disruptive programming could be the key for the future as Sony’s Kunal asserts, “I think by next year long running soaps will be dead… That’s tougher as we need to come with short burst programming then. People want a story in 26 episodes.” It’s this disruptive programming that has kept Sony in this race despite nimbler competition from new GECs. Their clutter-bursting programming – Indian Idol, Jassi Jaisi, Big Boss, Dus Ka Dum – made audiences return, allowing Sony to cling to the number three crown.

So long as Kunal Dasgupta continues with this creative destruction strategy, disrupting Sony will be a tough askance. But then, Reliance has a habit of breaking the mould in every business it enters. Anil Ambani will want to reach the numero uno position quickly and the first hurdle to topple will be Sony. Are you listening Sony, 9X, Colors, NDTV Imagine etc etc etc?

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2008

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Programme :- SUPERIOR COURSE CONTENTS
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