You are on page 1of 6

Porter’s Five Force Industry Analysis

Indian Cable TV Industry

1. Introduction

The Cable Television Industry in India started in 1970. At tht time, it was dominated mainly by the
Government owned Channel called Doordarshan. After the liberalization policy in 1991, we had a
slew of channels like Star Television, Zee Television, Sony Television, MTV and BBC that offered a
variety of programs in general entertainment, music and news. Zee, Sony and Star soon overtook
Doordarshan and became the most popular channels in India. The programs live Tara, Swabhimaan,
Kaun Banega Crorepati, Saas Bhi Kabhi Bahu Thi and The Bold and the Beautiful became popular all
across India.

Later on, we had a surfeit of more new channels like Colors, Discovery, Ten Sports, NDTV, Aaj Taak,
Cartoon Network and Sadhna that started challenging the hegemony of dominant channels in Cable
Television Industry. The popularity and penetration of Color Television and availability at low prices
increased the reach of Cable Television channels to rural areas. The beginning of DTH(Direct-To-
Home) Services like Tata Sky and Dish TV also increased the popularity and reach of channels. The
introduction of new and innovative programs like IPL (Indian Premier League), Big Boss, Chota
Bheem, Master Chef and Breaking News by news channels increased the excitement around cable
television.

Around the same time, we also had the launch of various regional level channels. Cable Television
Channels like Sun TV, KTV, ETC, Aakash Bangla and others were competing on equal footing with
national level channels. And now, we also have local channels that beam customised content. The
latest trend in the Industry is the entry of OTT (Over The Top) players in this segment. OTT refers to
channels like Amazon Prime, Netflix, Voot and Hotstar that beam the content through Internet
rather than cable or dish antennae.

The size of the Cable Television Industry in India is $800 billion, with a major 45% revenue coming
from advertisements. There are more than 5000 channels in India which are divided into various
genres like General Entertainment Channels(GEC), Sports Channels, Music Channels, News Channels,
Knowledge, Adventure and Lifestyle, Kids Entertainment and Religious Channels. Colors TV has the

1
highest market share with 26%, followed by Zee at 24% and Star Plus at 23%. The Industry is
currently growing at a CAGR of 4.8%. The ARPU(Average Revenue Per User) is Rs 150/-.

2. Companies in Cable Television Industry

i. Viacom 18 Media

Colors TV is owned by Viacom 18 Media. Viacom 18 Media is an Indian joint venture operation
between Viacom and TV18 based in Mumbai. It was founded in November 2007 and owns various
channels of the Viacom group, as well as various consumer products in India. Besides Colors, Viacom
also owns several other channels like MTV India, VH1, Nickledeon, Cineplex, Coors Infinity and
regional channels like Colors TV Bangla, Colors TV Kannada, Calors Tamil, Coors Marathi

The Colors Channel was launched in 2010, and broadcasts several programs like Balika Vadhu,
Naagin, Udaan, Sasural Simar Ka, Big Boss and Fear Factor. Colors has the highest market share with
26% among all cable television channels in India.

ii. Star TV

Star India Private Limited is an Indian media conglomerate and a wholly owned subsidiary of The
Walt Disney Company India. It is headquartered in Mumbai, Maharashtra. It has a network of 60
channels in eight different languages, reaching out to 9 out of 10 cable and satellite TV homes in
India.The network reaches approximately 790 million viewers a month across India and more than
100 countries. Star India generates more than 30,000 hours of content every year.

The Star TV owns channels like Star Plus, Star World, Star Utsav, Star Sports, Channel V and Disney.
The most popular programs in Star has been Kaun Banega Corepati, Saas Bhi Kabhi Bahu Thi, Kasauti
Zindagi Ki and Nach Baliye. Star Plus occupies the third spot with market share of 23%.

2
iii. Zee Television

Zee TV is an Indian pay television channel owned by Zee Entertainment Enterprises, a media and
entertainment company based in Mumbai, Maharashtra. A part of the Essel Group, it started to
broadcast on 2 October 1992 as the first Hindi-language subscription channel in India. The channel
mostly airs content intended for family and coming-of-age generations ranging from comedy to
drama. It also aired reality shows such as Shabaash India, Sa Re Ga Ma Pa, I Can Do That, India's Best
Cinestars Ki Khoj, and Dance India Dance.

Zee has the second highest market share in Cable Television Industry with 2% market share.

iv. Sony Television

Sony Entertainment Television (abbr. SET) is an Indian Hindi-language pay television channel that
was launched in October 1995, and is owned by Sony Pictures Networks India, a subsidiary of the
Japanese Sony Corporation.

SET has been one of India's most popular television channels, having produced many iconic shows
such as CID, Aahat, Indian Idol, Boogie Woogie and Crime Patrol. Sony is fourth ranked cable
television company with 16% market share.

v. Sun TV

Sun TV Network is an Indian mass media company headquartered in Chennai, Tamil Nadu, India. It is
a part of Sun Group and is Asia's largest TV network.Established on 14 April 1993 by Kalanithi Maran,
it owns a variety of television channels and radio stations in multiple languages. Its flagship channel
is Sun TV, which was the first fully privately owned Tamil channel in India. Sun Group currently owns
and operates 32 TV channels (24 SD + 8 HD) across Indian languages -
Tamil, Telugu, Kannada,Malayalam, Bengali and Marathi.

3
3. Porter Industry Analysis:
The Porter Five Force Analysis of Cable Television Industry is given as follows

Netflix

Amazon Prime

Disney

Threat
Balaji Cable TV
Star
Telefilms Bargaining Viewers
Bargaining Zee

Sony
SAB Power Power Advertisers
Doordarshan

UTV MSO

Threat

OTT

Mobile Phones

Bowling Alleys

4. Number of Competitors

There are more than 5000 Television Channels in India. There are various categories like General
Entertainment Channels(GEC), News Channels, Sports Channels, Music Channels, Kids Programs,
Know ledge and Adventure, Live Shows and Religion. The major television channels are
Doordarshan, Star Television, Zee Television, Sony and Colors Television.

Colors led the urban GEC market with 374 million impressions followed by Zee TV on the second slot
with 345 million impressions and Star Plus on the third spot with 342 million impressions. Sab TV and
Sony Entertainment Television grabbed the fourth and fifth spots with 300 and 298 million
impressions respectively. Zee Anmol continued to lead the rural market with 503 million impressions

4
followed by Sony Pal on the second slot with 377 million impressions and Star Utsav was on the third
spot with 346 million impressions. Rishtey and Star Bharat stood on the fourth and fifth slots with
306 million impressions and 285 million impressions respectively.

5. Bargaining Power of Suppliers

There are more than 5000 cable television channels whereas the content providers are less than 50.
Most of the channels are dependent on content providers like Balaji owned by Ekta Kapoor,
Endemol, BCCI for IPL Cricket and others. As the number of channels are more and the content
providers are less, the suppliers have a higher bargaining power over competitors.

6. Bargaining Power of Customers

With more than 5000 channels, the television viewers have a wide choice of programs to choose
program. Channels like SETMAX which keep on showing cliché movies like Sooyavansham and South
Indian dubbed movies are avoided by viewers. So channels like Star Plus are offering Rs 500 Crore to
stars like Salman Khan to geet fresh movies in their channels. So we can say the bargaining power of
customers are higher than that of competitors.

7. Threat from New Entrants

There are a slew of new OTT Channels like Hotstar, Amazon Prime, Netlix and Alt Balaji that are
giving exciting content like Sacred Games. These new channels are beamed through Internet and are
very popular among young viewers. So we can say that the threat from new entrants is very high.

8. Threat from Substitutes

The Substitutes to Cable Television Channels are OTT and Multiplexes. OTT are offering fresh,
relevant, contextual and appealing programs. Superstars like Akshay Kumar, Hrithik Roshan and Saif
Ali Khan are now making web series for OTT. The multiplexes arealso gaining in popularity as
hangout and social interaction places. So overall we can say that threat from substitutes is very high
for Cable Television Channels.

9. Entry Barrier

The Entry Barrier is very low in case of Cable Television Channels. The permission can easily be
obtained from Information and Broadcasting Ministry. The Channels need a space in Satellite and a
studio to beam their programs. The Government does not interfere with channels unless they beam
obscene, communal or politically sensitive programs.

10. Inference

The threats are very high, bargaining power is very low and the entry barrier is very low. So overall
we can say that the Cable Television Industry is not very attractive to invest.

5
11. Conclusion

As per the TAM Annual Universe Update, India now has over 167 million households (out of 234
million) with television sets, of which over 161 million have access to Cable TV or Satellite TV,
including 84 million households which are DTH subscribers. Digital TV households have grown by
32% since 2013 due to migration from terrestrial and analog broadcasts. TV owning households have
been growing at between 8-10%. Digital TV penetration is at 64%. The growth in digital broadcast
has been due to the introduction of a multi-phase digitisation policy by the Government of India. The
typical Indian soap opera is by-far the most common genre on Indian television. Fiction shows
(which also includes thriller dramas and sitcoms) are extremely popular among Indian audiences, as
they reflect real family issues portrayed in a melodramatic fashion.

There are thousands of television programs in India, all ranging in length, air time, genre and
language. The Hindi and Tamil television industry is by far the biggest. However, some have much
greater influence on the audiences, and therefore make the annual list of the best Hindi shows.

The Industry is very competitive with numerous players offering a variety of programs. However, the
margin in the business is very low making it unattractive for investment.