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CIA – 1
PESTEL ANALYSIS
MARKETING MANAGEMENT, MBA 231

Yadu Krishna N S - 2027114

Paidi Ravikiran -2027135
Latika Lunani – 2027141
Akshitha Reddy M – 2027158
Sudharshanaa B S - 2027159
Roshan Varma - 2027160

Submitted To: Dr. Kavita R Gowda

Submitted On: 1st November 2020

MBA PROGRAMME

SCHOOL OF BUSINESS AND MANAGEMENT

CHRIST (DEEMED TO BE UNIVERSITY), BANGALORE

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PESTEL ANALYSIS OF MEDIA AND ENTERTAINMENT INDUSTRY

INTRODUCTION

Entertainment, decades back for Indians meant circus, movies and radio and media was
newspaper and books. But today the entertainment and media industry has grown to a large
extent. Today we have various options, television, movies, internet, social media, print media,
live entertainment etc. Liberalization efforts of the Indian government has also brought benefits
to the Media and Entertainment Industry along with Information and Communication
technologies. M&E industry shows a strong phase of growth and development since the
beginning of 2000, the industry is backed by increasing consumer demand and advertising
revenue. The industry is been directed by continuous digitalization. It’s said by 2021 Indian
M&E industry will reach 2.35 trillion of GDP and is expected to have a compounded annual
growth of 13.5% for the financial year 2019-2024. India currently ranks at 15 in the world in
the music industry. And is forecasted that India will reach top 10 of music markets by 2022.

Media and Entertainment industry in India has an extensive growth, the industry growth is
expected to be much faster than the world’s average growth rate. The growth is specially
expected to be seen in the retail advertisement and film industry.

In a PESTEL Structure Survey, this study explores the Media & Entertainment Industry in
India. The environmental effects on a organisation are protected by a PESTAL study. The
acronym stands for the Political, Economic, Social, Technical, Environmental And Legal
problems that could influence a company's strategic growth.
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POLITICAL FACTORS:

• Government Support:

The Minister of State for Science and Technology, Mr. Kapil Sibal, has described the
entertainment industry as an important sector for India's export-oriented development.
Compared to governments in other nations, however, the Indian government's efforts
to promote the sector have been very limited.

• New Government Initiatives:

A 25-acre Special Export Zone (SEZ) was to be developed solely for the entertainment
industry on Thiruvananthapuram's outskirts. The SEZ construction within the Film and
Video Park (FV Park) set up by the Kerala Industrial Infrastructure Development
Corporation near Thiruvananthapuram was approved by the Commerce Ministry. The
Entertainment Production Association of India recently proposed to the Ministry of
Information and Broadcasting of India that all TV channels should guarantee a 10%
reservation for local animated content.

• TAX:

Delhi entertainment and betting Tax Act, 1996, collected by the entertainment tax
department 25% - 30%.

• Film Chambers:

The 1952 Cinematograph Act, involving

1. Provisions to license and certify film cinematography.

2. The regulation of exhibitions by means of cinematography also involves this.

3. Issues of title; Actors & Directors; Distribution.

• Music:

The Right Society Performing Indian:

1. Issuing licenses for music consumers.

2. Gathering royalties from them.

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3. Issuing licenses to permit the use of music in India.

• Television:

1. Indian Telecom Regulatory Authority Problems relating to the uplifting and

downlinking of Indian television channels.

2. Consultation Report on International Broadcasting Investment.

• Multimedia:

1. Indian Telecom Regulatory Authority Including Software Licensing Issues Problems

with growth and production

2. The Law of Information Technology

3. General problems concerning intellectual property

ECONOMICAL FACTORS:

• Lack of Finance:

In financial power, Indian entertainment companies do not equal their western

counterparts. It was pointed out that state support in the form of tax holidays was
essential for success in the entertainment industry. Canada, for instance, provides its
studios with substantial rewards for producing entertainment goods. However, the
financing of entertainment and digital media ventures by India's financial institutions
has not been very encouraging.

• Economical:

1. India is among the world's top 5 economies.

2. Raise in industry sows expansion to overseas market Increase worldwide focus on

the Indian entertainment industry

• Demography:

1. The rise in segmented customer targeting has contributed to an increase in market

growth.
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2. The emergence of the higher middle class in India with greater earning power will
drive the entertainment industry's greater growth.

SOCIAL FACTORS

The media and entertainment industry has a big role to play in the field of information
dissemination to the people all around the world. The most important social factors include the
cultural aspects, the population demographics, lifestyle changes, attitude to work-life, social
mobility and so on.

• The media and entertainment industry should be aware and sincere about the
information they share. The population is dependent on them for the information. The
firms should only share the information with trusted content or else it could lead to
controversies or affecting the feeling of people.
• The media industry is the one main factor that drives the lifestyle changes in the people.
They share contents in the form of ads, posters to attract people and make a huge profit
out of them. Most of the brands are dependent on the media platforms for the smooth
running of their businesses. Thus, the industry should hold itself responsible as in one
way the people are trusting the promotions.
• As the trends in the society are changing day by day, the employees are the ones who
find it difficult to deal with, the employees should be given rewards, recognitions and
other benefits they deserve from time to time as it could help them develop a positive
attitude towards work and thereby increasing the productivity.
• The content shared by the media channels should be appropriate enough to be viewed
by the people of all cast, creed, colour, religion etc.

The impact of media has brought revolutions in the social and has also created a more
enlightened society, which is an appreciation to the industry.

TECHNOLOGICAL FACTORS

Technology has become a part of the entertainment and media industry. Over the years, we
could see the development, from black-white movies to colour to 3D, 5D and now 10D is
experienced. Technology has played an important role in redefining the products, cost
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structure, and market. Widely known examples in the media and entertainment industry are e-
books, 10-Dimensional movies, interactive TV, etc.

• The high-speed technological advancement calls for increased spending on research

and development. This requires a large number of skilled and technical expertise.
• There are no academic institutes for churning animators and content editors in
countries like India; there lies a vast disadvantage. But at the same time, it can be seen
professionals joining the industry has been compounded yearly at the rate of 18.2%.
This shows the opportunity availability and the requirement for technicians.
• India, for a long time, has been importing the machines required in the film industry,
it’s high time we develop our own machinery.
• In this era of growing technology, the consumer always wants the immediate flavour,
expects new things, and always fascinates to experience the unique technological
effect. India is yet to become self-reliant.
• Need for refinements in equipment such as robotics, artificial intelligence, and tax
machines. An example is the launch of iPad iBook’s, created a huge opportunity for
publishers.
• A good thing about the technological advancements is saviour of environment. The
transfer of print media to devices and websites has reduced the cost of print and paper.
The devices has given one stop solution to many such problems.

A problem with technology is its forever changing, the companies has to constantly upgrade
themselves, to hold their spots in the competitive market.

ENVIRONMENTAL FACTORS

Technology has become a part of the entertainment and media industry. Over the years, we
could see the development, from black-white movies to colour to 3D, 5D and now 10D is
experienced. Technology has played an important role in redefining the products, cost
structure, and market. Widely known examples in the media and entertainment industry are e-
books, 10-Dimensional movies, interactive TV, etc.

• The high-speed technological advancement calls for increased spending on research

and development. This requires a large number of skilled and technical expertise.
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• There are no academic institutes for churning animators and content editors in
countries like India; there lies a vast disadvantage. But at the same time, it can be seen
professionals joining the industry has been compounded yearly at the rate of 18.2%.
This shows the opportunity availability and the requirement for technicians.
• India, for a long time, has been importing the machines required in the film industry,
it’s high time we develop our own machinery.
• In this era of growing technology, the consumer always wants the immediate flavour,
expects new things, and always fascinates to experience the unique technological
effect. India is yet to become self-reliant.
• Need for refinements in equipment such as robotics, artificial intelligence and tax
machines. An example is the launch of iPad iBook’s, created a huge opportunity for
publishers.
• A good thing about the technological advancements is saviour of environment. The
transfer of print media to devices and websites has reduced the cost of print and paper.
The devices has given one stop solution to many such problems.

A problem with technology is its forever changing, the companies has to constantly upgrade
themselves, to hold their spots in the competitive market.

LEGAL FACTORS:

Media and Entertainment industry creates challenges for artists like privacy, publicity, finance,
intellectual property etc. Legal issues are generally observed while creating original work of
entertainment and while licensing and distribution stage. The following few are the legal
aspects which are framed by the Government of India which would help the actors and actresses
to maintain their calm:

• Employment laws
• Labour laws
• Contract laws
• Security law
• Right to privacy
• International laws
• Insurance laws
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• Handling of defamation claims

• Status and Reputation
• Sponsorship deals
• Right to free speech and Censorship

In order to maintain peace and harmony in the media and entertainment industry it is important
that there is no violation of Copyrights, Intellectual property, expressions and freedom of
speech.

PORTER’S FIVE FORCE MODEL FOR MEDIA AND

ENTERTAINMENT INDUSTRY

S.NO FORCES MEDIA - FACEBOOK ENTERTAINMENT –

THE WALT DISNEY
1. Competitive Social media is the place This component in Porter’s Five
Rivalry where the continuous use Force analysis framework,
of advanced technologies measures the external factors that
and innovations play an helps in keeping up the
important role in terms of competitive environment among
survival. The customer the companies in the industry.
trends are constantly So, here Walt Disney company
evolving, the choose the focuses on the effect caused by
one that is more trending firms on one another in theme
and easier to use. Facebook parks, entertainment, and mass
has many rivalries like media industries along with the
Twitter, WhatsApp, trends that impact these
Instagram, Snap Chat, businesses. The external factors
Reddit and so on. The in this component will bring out
speciality with these strong competitive rivalry
platforms is that one has against The Walt Disney.
certain features that other
doesn’t have. Certain
platforms like Snap Chat
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aims for youngsters.

Facebook is the largest
platform and has acquired
WhatsApp, Instagram and
continue to be the
dominant one, so the
competition rivalry is in the
medium level.

2. Threat of The substitutes for The fear of substitution brings

Substitute Facebook include pressure on the company in terms
Products Google+, Twitter and so of pricing, market share etc. Walt
on. These are similar to Disney’s business always has
Facebook as they have this pressure. So, the company
similar features in has to now implement strategies
comparison to Facebook. that would grab the attention of
Many new innovative apps the customers and prevent them
are also introduced in to the from choosing other available
market these days, there are substitutes.
also marketing for business
purposes done on other
websites, blogs, newspaper
and television. So, these
factors conclude that the
threat of substitutes is high.
3. Bargaining The number of social The bargaining power of buyers
Power of Buyers media platforms available or customers is considered by
today is large, so there is an this framework as it is found that
intense competition among there is an impact on business
them. The second kind of strategies like pricing strategies.
users are those running ads The effect of these factors will
on the social media for contribute to the strong
business purposes. They bargaining power of Walt Disney
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could shift to other company customers. Therefore,

platforms if Facebook is this component will help the
costly or when the other company to find strategies that
platforms have more will help them retain customers
viewers. So, Facebook has irrespective of the competition
to adopt a satisfiable against them.
strategy for both users and
themselves. So, the
bargaining power of
customers is also at a
moderate level.
4. Threat of new Building a social media This component identifies the
entrants platform like Facebook, threats that occur due the entry of
Instagram, etc are easy but new firms or businesses into the
the difficulty is in grabbing industry. Here the threat for Walt
the market share. Disney could be the entry of any
Significant investments are large firm with huge capital into
required in terms of the entertainment industry. This
branding, marketing and would become a hindrance for
applying other innovations continuing the success of already
to attract customers from existing businesses in the
using other platforms. industry
Thus, that’s expensive and
will also take a good
amount of time to develop
a loyal customer base.
Thus, the threat of new
entrants to this field is low
and today Facebook has the
largest market share and
followers.
5. Bargaining power The suppliers of Facebook This component of the analysis
of Suppliers include those firms that focuses on supplier’s influence
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supply technology and on the business. The stability of

developers likes IBM and Walt Disney suppliers will
Ericson that helps with influence its multinational
software innovations and operations. In order to maintain
other applications. The an efficient and effective supply
suppliers in this field are chain, the company has to
limited and switching from address the influence of its
supplier to the other might suppliers on the industry
be costly. Thus, it can be environment.
concluded that the
bargaining power of
suppliers in the field are at
a moderate level.

PORTER ANALYSIS OF MEDIA AND ENTERTAINMENT INDUSTRY

AS A WHOLE

1. COMPETITVE RIVALRY:

The competition rivalry is also high due to a fragmented industry, diverse rivals, and
high fixed cost.

2. THREAT OF SUBSTITUTES:

The threat of substitute in the market is also high due to print media, internet, cultural
and sport events, etc…

3. BARGAINING POWER OF BUYERS:

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The bargaining power of customers are high due to the availability of alternate sources
of entertainment and increased globalization.

4. THREAT OF NEW ENTRANTS:

The threat of new entrants is low as it requires a huge capital and difficult access to
distribution

5. BARGAINING POWER OF SUPPLIERs:

The bargaining power of suppliers is low as there is an increase in number of content

providers.

CONCLUSION

On one hand PESTEL Analysis gives informative framework to understand the market
environment, while on other hand Porter’s five force model is helpful to understand or make
sense of an industry’s growth. This analysis is valuable as it gives knowledge about our close
competitors that can affect the business or an industry. If the executives or the members of the
industry carefully analyse the forces and environment of market, the chances of success will
increase in a significant way.

REFERNCES:

• https://www.slideshare.net/ankitasaxena03/industry-analysis-media-and-
entertainment-industry
• http://thebusinessofmediaentrepreneurship.blogspot.com/2013/10/media-industry-
pest-analysis.html
• https://www.swotandpestle.com/category/industries/media-and-entertainment/
• https://www.porteranalysis.com/porters-five-forces-analysis-of-facebook/
• https://pestleanalysis.com/pestel-analysis-of-movie-theatre-industry/
• https://www.ukessays.com/essays/business/business-environment-of-indian-
entertainment-industry-business-essay.php
• https://www.ibef.org/industry/media-entertainment-india.aspx
• https://www.scribd.com/document/29847179/PESTEL-ANALYSIS-OF-
ENTERTAINMENT-INDUSTRY
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DETAILS OF THE WORK DONE

NAME WORK
Yadu Krishna N S PORTER Analysis of Facebook and media
and entertainment industry as a whole
Paidi Ravikiran Social Factors of the PESTLE and
Conclusion
Latika Lunani Legal Factors of PESTLE and Report
compilation
Akshitha Reddy Environmental Factors of PESTLE and
PORTER Analysis of Walt Disney
Sudharshanaa B S Introduction and Technological Factors of
PESTLE
Roshan Varma Political and Economical Factors of
PESTLE