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Skyline Business School |
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Skyline Business School |
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Issue:4
Advertising & Marketing
India
Droves of advertising, marketing and media professionals from across the country and the region are descending on Jaipur for AdAsia 2003, as the pink city plays host to about 1,500 delegates and 24 speakers from 17 nations, all congregating to ‘Break the rules’, the theme of the congress.
The convention was held in India after a gap of 21 years, will earn goodwill for the country, and also make it a natural choice for more such conventions, organisers said. Compared to the near stagnant growth in mature markets like the US and Europe, Asia is growing at 6-8%, and the large youth demographic and the rising profile of the middle class in India makes it a particularly attractive market for all manner of goods and services. “Interest in India as a country is pretty high in the region, and there is also more awareness now that India is a force to reckon with in advertising,” said Ramesh Narayan, Chairman, Planning committee, AdAsia 2003 & MD-Canco Advertising.Source: The Hindu Business Line, Nov.10
On a day that would go into the pages of history as the strongest pitch ever made for Brand India, the country’s two most important brand ambassadors—Kumar Mangalam Birla and Mukesh Ambani—for the first time joined forces on a common platform at AdAsia 2003 to position India as the destination next.
“ India is an idea whose time has come. It has all the ingredients of a global brand waiting to be communicated first to the internal audience and then to the world, said the AV Birla Group chairman. Also, Mukesh Ambani said, “ India is standing at the cusp of a lifetime opportunity being home to 1/6th of global population, with 80% of it expected to remain productive and young in decades to come”.Source: Hindustan Times, Nov.13
On the topic of ‘Building great brands’ (which was the focal point of the second session of day-4 at AdAsia 2003), Rory Morgan, global marketing sciences director, Research International, UK, chose to speak on ‘Measuring and Leveraging Brand Power’. Research International’s principal expert in branding, brand equity and micro modelling highlighted the fact that fundamentally, human motivations and needs drive people to choose some brands over others, and that understanding basic human needs should form the bedrock of all branding effort. Morgan also drew attention to the fact that consumers do not necessarily think rationally while purchasing brands and that brand selection is based on mood, which is why brands need to be perceived as meeting specific human needs. “We need to look at core human values and needs more from the perspective of the brand, and less from that of the person,” he argued.
Morgan revealed that in the wake of the intensive study, it was found that there are 15 universal needs that brands can tap. These are: (1) Well-being: the sense of ‘feel-good’ that is both physical and emotional, (2) Fun/enjoyment: enjoyment in a very active and ‘participative’ way, (3) Self-indulgence: the sense of being a little naughty, a little sinful, (4) Harmony: where brands create a feeling of balance and inner peace, (5) Knowledge: not bookish knowledge but knowledge that is about being smart, (6) Individuality: being distinct from the crowd, (7) Security: which includes the concept of being free of threat, (8) Respect, (9) Attractiveness: the need to look good, (10) Love: an absence of selfishness, (11) Belonging: where brands play a part in bringing like-minded people together and cementing their association (Morgan termed this as “tribalism”), (12) Control: the need to stay in control over things, especially in today’s fast-changing environment, (13) Tradition: the appreciation of heritage and the days gone by, (14) Leadership: coming across as the premier or the first off the block, (15) Freedom: not the same as ‘individuality’ but as liberation from constraints.
Morgan is of the opinion that brands should be perceived to be filling these human needs. “You can identify links between brand properties and these universal needs and address each need individually,” he concluded.
Source: Agencyfaqs.com, Nov.14
The world
One of the world’s most annoying forms of advertising on the Internet, ‘ pop-up ads’ could be history,
pending Microsoft’s recent decision to test pop-up blocking tools for future versions of Internet Explorer. Pop-up ads make up about 7% of all online ads, up form 3% a year ago, says Nielsen/NetRatings. Advertisers love them because they grab customer’s attention, but users hate them. In a recent survey in the US, 40% of the respondents said pop-up ads are the most annoying form of online ads. Google and others already offer pop-up blocking software, but one still has to download it.Source: Hindustan Times, Nov.13
India
How many television news channels can coexist in the country?
Now with DD News (from public broadcaster Prasar Bharati’s stable) joining the race and another couple of private players intending to launch some time soon, the question has surfaced again. Experts indicate that there is room for a maximum of four Hindi news channels, meaning that a shakeout is imminent. As for English news channels, only two are expected to survive, and a business channel perhaps. Even as three to four news channels are a norm internationally, India is a unique and a more fragmented market, where regional news channels also compete for space. Universal Mc Cann president, Chintamani Rao, predicts a new development for the news broadcasting industry –niche segmentation in line with the American market. Mindshare India, managing director, Ashutosh Srivastava, however says that, “ there’s always room for more channels.” He asks,“why are there so many newspapers?” adding, “ so many newspapers are surviving, but not all of them are making profit.” News channels would follow the same pattern. Their agenda is not to make a quick buck, but for strategic considerations. A recent industry survey puts the share of news channels at 12% of the total TV advertising pie. As per 2002 figures, the estimated size of the total advertisement revenue for the TV industry is around Rs. 2000 crore. According to a KPMG-Ficci report, the Indian TV industry revenue break-up in 2002 was 54% from subscriptions, advertising bringing 35%, and other income 11% (including production deals and providing up-linking facility and content to other channels). A recent research published by a media company showed that from 1998 to 2000, advertising revenues of news channels grew 27.6%, and 2000 to 2002, 100%, and from 2002 to 2003, 80%.Source: Financial Express, Nov.10
Aaj Tak and Sahara TV could be among the private television channels that public broadcaster Prasar Bharati is planning to sue for violating its intellectual property rights (IPRs).
Prasar Bharati plans to move court against copyright infringement of cricket footage from matches played in India, over which it holds exclusive rights. Several private TV channels are guilty of this violation. Prasar Bharati’s CEO, KS Sarma took strong objection to the unauthorised use of software in the light of breaches of the India-Australia-New Zealand tri-series cricket footage for which DD has exclusive terrestrial and satellite rights. Mr. Sarma said that a case would be filed in the next two-three days. Criticising the scant regard for copyright in India, he stressed the need for a change in mindset. Prasar Bharati has observed that several news and current affairs channels are using DD footage—far exceeding the normal 45 seconds to one-minute limit, in their programmes. To make matters worse these programmes are run through sponsorships, meaning the channels are also making money. Sources alleged that Aaj Tak’s Wisden’s Show was one such programme.Source: Economic Times, Nov.7
The Ronnie Screwvala-promoted-UTV is aggressively looking at expanding its broadcast business.
While a kid’s channel is in the offing, according to industry sources, the company is also exploring the possibility of a launch in the mass-entertainment space. The plans for the kid’s channel are at an advanced stage and the launch is expected sometime in the later half of 2004, however the other plans are still at the research stage. “ We see good demand and as growth potential for a kid’s channel”, says Screwvala, CEO, UTV. On the kid’s front, UTV is aiming at an extended audience.” Ours won’t be just a kid’s channel. It will be a youth channel too, wherein we would be targeting audience in the 4 to 14 years and 14 to 20 years of age groups”, Screwvala says. He admits that if UTV manages to build a loyal audience base among kids and the youth, it will be easier to push them to the next business level of movies and television content. UTV at present has interests in the television content creation; wherein it is producing fiction and non-fiction content and is also handling airtime sales. It is also in the animation business big time and has co-produced several series with and for US, UK and Canada based companies. The company also operates in the movie production and distribution space and is also aggressively looking at expanding in the international market. When CPDQ of Canada picked up a 14.8% stake in it last year, UTV was valued at around Rs. 300 crore. Screwvala rules out any possibility of a joint venture for the kids project. UTV’s regional project in the south, Vijay TV, though, has STAR as its majority stakeholder (51%) Source: Economic Times, Nov.2Channel [V] claims to have overtaken MTV in the last one-month and become the no. 1 music channel for a target audience aged 15-34 years in the six metro cities.
The channel announced this with loads of fan-fare. However, it may have uncorked the champagne a little early. TAM Media Research data for the same period reveals that while Channel [V] may be the preferred music channel in the metros, it still trails arch-rival MTV on an all-India Basis. Source: Business world, (17 Nov.)The world
The chances of Rupert Murdoch’s 30-year-old son James eventually taking the reigns at News Corp. were bolstered when he was named chief executive of British Sky Broadcasting Group PLC, the satellite broadcaster that is 35.4% owned by News Corp. Plucking the younger Mr. Murdoch from Asia, where he ran another News Corp. satellite broadcaster, has raised the hackles of the two largest shareholders groups in the U.K., whose members control as much as 40% of Britain’s stock market. Brushing aside complaints that James Murdoch’s appointment could compromise the interests of minority shareholders, the BSkyb board late Monday chose him to succeed Tony Ball, who is leaving after four years as CEO of Britain’s 18th largest company, with a market capitalization of £ 12.4 billion ($ 20.79 billion). The appointment took effect from Tuesday. Given the increasing importance of digital broadcasting to News Corps’s empire—evidenced by its recent $ 6.6 billion deal to acquire control of DirecTV in the US—James Murdoch’s new position as BSkyB’s boss strengths his position in the succession stakes. Source: The Asian Wall Street Journal, Nov.5
James Murdoch is determined to confound the critics of his new role at the helm of Britain’s largest media company.
He began meeting institutional shareholders who have questioned a selection process that saw him through. Given that Mr. Murdoch’s father is chairman of both the BSkyB and News Corp—which controls 35.4% of the UK media group—investors want assurances that the executive will defend the interests of other shareholders at the pay-TV group. Speaking at BSkyB’s London office, he argues that questions about alleged nepotism in his selection should be addressed to BSkyB’s non-executive directors. “ We worked with one of the most respectable search firms in the world. I was on the sharp end of the process. Citing the turnround at Star TV, he dismisses suggestions that his role was overshadowed by his family name.“ My job, in addition to working with the management team, is going to be about communicating with shareholders,” he says. “We believe that the core business in the company’s home markets have a lot of growth in them.” BSkyB insiders say one of his first challenges will be to decide BSkyB’s sales and volume targets. The instincts of Mr Ball, the outgoing chief executive, were to secure 8m subscribers and then concentrate on converting more to premium services. But Rupert Murdoch is said to prefer continued volume growth, possibly lifting subscribers to about 12m over the medium term. The new chief executive employs an American football metaphor for his approach at BSkyB. He plans to go,” through the hard yards” of each issue facing the company. Those issues include a return to investment-grade status and resuming dividend payments.Source: Financial Times, Nov.5
India
The Tamil Nadu assembly on Friday sentenced five journalists of The Hindu to 15 days’ imprisonment for breach of privilege.
The sentence was awarded in connection with an editorial published in April making critical observations about Chief Minister J. Jayalalitha’s style of functioning. The same sentence was awarded to the editor of Murasoli, the DMK organ, for publishing a translation of the editorial. Source: Hindustan Times, Nov.8Hathway Investments has hived off five magazines—Outlook, Outlook Traveler, Outlook Saptahik, Outlook Home and Outlook money—into a separate company.
“The publishing business has been de-merged from Hathway Investments into a separate company called Outlook India Publishing India Ltd.”, Maheshwer Peri, Publisher of Outlook said, adding that though there were no proposals as yet, infusion of foreign funds in the company is not ruled out. It is probable that the hiving-off process is part of a larger strategy to get foreign direct investment in the future. Outlook India Publishing India Ltd. is 100% owned by Hathway Investments, which is the investment company of the Mumbai-based Raheja, who also has interests in businesses like retail, construction, as well as cable distribution. “This is part of the group strategy. Hathway Investments has functioned like a fund which allows a company to go on its own once it achieves a critical mass,” Peri said. He however did not divulge the financial details of the company including its paid up equity capital. However, sources close to the deal said that the company has been structured with a low paid up equity base. With a large capital base, and varied interests it may have been difficult for Hathway to induct a foreign partner.Source: Business Standard, Oct.29
There are strong indications that CHIP will finally re-launch sometime in November.
A part of Germany based Vogel Burda Publications, CHIP was due to be launched in August this year after a long hiatus following its acrimonious break up with JasuBhai Digital. But its plans got delayed when Tata Infomedia, the parent of the company that has the Indian license for the title, was bought by ICICI ventures. Source: Business world, (10 Nov.)Metro, the English-language community paper from Mid Day Multimedia, will soon have a language edition.
The company, according to Anwar Dawood, publisher, Metro, is looking at a presence in both Marathi and Urdu apart from English. "We have sent the declaration for a Marathi-language as well as Urdu-language paper; whichever materialises first will be launched by November-end or early-December this year," he says. If launched on schedule, the foray will mark the group's entry into the language space, something it has been toying with for a while now. Not a bad idea given the group's prospects. For the quarter ended September 30, 2003, the company registered a profit before tax or PBT of Rs 2.61 crore against net sales of Rs 22.12 crore. In the same period a year earlier, that is, for the quarter ended September 30, 2002, the company reported a loss of Rs 11 lakh against net sales of Rs 18.93 crore. Source: Agencyfaqs.com, Oct.27International Data Group (IDG) continues to expand the company's stable of Chinese-language editions of foreign magazines –everything from Computerworld to Cosmopolitan, a Hearst Corp. title that IDG helps publish in China.
In all, the Boston publisher has invested $20 million in the mainland since first travelling there 23 years ago. Today IDG has 28 titles in China, with four more expected in the coming year.The print advertising market in China is growing at 37% annually, with total revenues of $5.5 billion last year. Those numbers haven't escaped the attention of media moguls worldwide. A few early birds in the magazine business –mostly tech titles—have been in China since the 1980s. But lately, international publishers have been piling in, forming joint ventures with Chinese partners or licensing their name and content for publication on the mainland. Today, more than 50 foreign magazines have Chinese-language editions, with a dozen more expected in the coming year. "Investors see China as an untapped media market with huge potential," says Li Xiguang, director of the Centre for International Communications Studies at Tsinghua University in Beijing.
Even the McGraw-Hill Companies licenses the BusinessWeek name and content to the China Foreign Economic Relations & Trade Publishing House, which has published a Chinese-language edition since 1986.
Since 2000, Fortune, Forbes, and Harvard Business Review have joined the field of business magazines.The opening of the Chinese media market to new publications is partly due to a new regulatory regime for media. The changes that have swept China's economy in recent years are finally reaching the country's 11,000 cash-strapped periodicals. In an effort to rationalize the media sector, Beijing's General Administration of Press & Publications in July announced that it will no longer require Communist Party members to subscribe to many of the turgid, grey newspapers, magazines, and journals published by ministries and municipalities. By year-end, some 1,000 periodicals are expected to close, and thousands of others will need to find new sources of funding. "The government doesn't want to be responsible for paying for the media sector," says Zhao Xiaobing, president of Global China (Beijing) Media Consulting Co.
Source: Business Week Online, (10 Nov.)New York Times co. last year made an unsolicited approach to acquire Dow Jones & Co., publisher of The Wall Street Journal, only to be rebuffed.
The New Yorker Magazine reported that New York Times chairman, Arthur Ochs Sulzberger Jr. personally made the approach. Dow Jones currently has a market capitalization of about $ 4bn. Mr Roy A. Hammer, a Dow Jones director who serves as trustee to Dow Jones’s controlling shareholder, the Bancroft Family, said in an interview that Mr. Sulzberger’s “general thinking was that both the New York Times Co. and Dow Jones & Co. were relatively small compared with some of the media giants and that by combining forces in one way or another we would compensate for that size differtential.” However, the Bancroft family and the board have always reaffirmed the company’s intention to remain independent.Source: The Asian Wall Street Journal, Oct.27
Radio Media
India
Revenue sharing between private FM radio players and the government has been finalised at 4%, according to sources.
Although a lower revenue-sharing rate was proposed by some members of the expert committee on radio. Revenue sharing will follow payment of a one-time entry fee through bidding. The committee headed by Ficci secretary general Amit Mitra has submitted an advance copy of the draft report to the Information and Broadcasting Ministry. The formal report would be submitted by November 7. Incidentally existing FM licensees, who had bid sky high for licences during the first phase of privatisation, found the going tough once they set up operations. That was when FM Radio companies, including Bennett Coleman, Living Media and Mid-day began lobbying with the government, stating that the high license fee regime was killing their business. The government then decided to form this committee to overhaul the rulebook of FM Radio.Source: Financial Express, Nov.4
JAPA4, the first commercial private FM Channel in Andhra Pradesh, has tied up with Telugupeople.com to web cast its programs live on the portal.
“The huge NRI population will be able to listen to our programmes at the same time as their kin latch on to the popular program here in Hyderabad, ” Mr Ilias Ahmed, chairman of JAPA4, said. The effort is being supported by unique screening software developed by Telugupeople.com, which allows for free and uninterrupted flow of audio files over the net. Sources in the portal said there was a good revenue model in the arrangement. “Advertisers will have a unique platform to reach out to the audience elsewhere. It will go well, provided that the idea is sold well,” the sources said. Source: The Hindu Business Line, Nov.8Web Media
The company, bid-up.tv (and its new sister channel price-drop.tv) is growing rapidly, is profitable, and is even creating interest among economists.
They might be just the natural experiment economists have been looking for to test aspects of the economic theory of auctions, dating back to 1961. Ashley Faull and John Egan are the ones who founded the company that owns bid-up.tv and price-drop.tv in 2000. “ Existing TV home shopping was not entertaining,” explains Mr Egan, “ and we thought that online auction websites would succeed, so we came up with the concept of three ‘Qs’: a mix of QXL and QVC and quiz shows.” That combination of auctions, home shopping and entertainment remains the core idea running through the output of both auction channels, though Mr Egan now substitutes eBay for QXL in conversation.Bid-up.tv company’s revenues have doubled each year since 2001. Turnover is expected to reach £110m ($183m), already about half the level of the leading home shopping channel, QVC. The company now claims to be the UK’s fourth largest retailer of bicycles and fifth largest retailer of jewellery.
Bid-up.tv’s success is based on its entertaining formats—Viewers bid for the product on offer, normally with the minimum bid starting at only £1. The quantity of goods on offer in each lot is limited. Minimum bid level starts to rise and all this information is displayed live on screen. The Auction continues until the gavel comes down between seven and nine minutes later.
The clever part of the business is the flexibility of the technology. The quantity of goods on offer are varied to match audience numbers throughout the day: large number on offer at peak periods such as pub closing time and Sunday evenings, fewer goods on a Tuesday morning. Also, if a particular product is attracting lots of bidding interest, the studio director can tell the auctioneer to keep describing it for a couple of extra minutes.
“English-style auctions are well understood. The potentially interesting new development was the launch of price-drop.tv in June. It is a TV variation of a “ Dutch” auction, which originated in Amsterdam’s flower markets. In this an on screen price starts at a ludicrously high level, say £100 for the 30 Nike tracksuits on offer, and begins to fall. Once the price drops to a level that people are willing to pay, viewers can ring in and bid. Once there have been bids for all the tracksuits, the auction finishes.
Every successful bidder pays the same price—the lowest price—so there is no penalty to bidding early. The speed at which the price comes down is controlled by the studio director, who can see how many viewers are hovering on the telephone lines at anytime.
Beauty of price-drop.tv for practical economists is that the combination of the two channels, both of which sell the same products to potentially the same audience, is pretty close to a natural experiment of the differences between the auction formats. This could inform sellers, much more generally, of the best way of maximising the price of any item sold.
William Vickrey’s 1961-paper, which won him the Nobel Prize in 1996. He proved that under certain conditions the revenue received by sellers should be identical, regardless of the auction style. However, an extension of the theory says that if buyers are risk-averse, they pay more in Dutch auctions, awarding more money to the seller.
Source: Financial Times, Oct.15India
Music retail chain Music World and music channel MTV Networks India have formed a partnership under which Music World will be the preferred partner for MTV's consumer interactive promotion activities.
This would include MTV VJs visiting Music World stores, and the stores being featured in MTV programming. Select Music World outlets will also carry MTV signage, and specially branded sections will be reserved for promoting MTV events, shows and product launches. Also, MTV will be shown on TV sets in Music World outlets. This is essentially a marketing relationship that seeks to leverage individual strengths, and is the first such national-level relationship for the chain, S.K. Chowdhury, General Manager, Music World said. It does not entail any investments by Music World at this point.Source: The Hindu Business Line, Nov.7
Films & Cinema
The world
The Walt Disney Co. on Wednesday said it had sold a record 8 million DVDs and Videos of the smash hit movie, the animated underwater adventure—Finding Nemo—in its first day on retail shelves with demand so high it raised the possibility of shortages.
Disney, in partnership with Pixar Animation Studios Inc., produced the film about the lost fish Nemo and his father’s adventure to find him. The previous single-day record for an animated movie was 5 million DVD and video sales for their previous collaboration, Monsters, Inc. Sony Corp.’s Sony Pictures Entertainment, sold 7 million DVDs and videos of its Spider-Man movie when it first hit retail shelves in November last year. The movie, Nemo, which was released in May, has been 2003’s biggest box-office hit with just under $340m in movie ticket sales in the US and Canada. “You can’t have great DVD without great film, and people know what great entertainment finding Nemo is,” said the DVD’s producer, Bill Kinder, of Pixar. If the DVDs and videos were sold at suggested retail prices, Nemo’s one-day sales figure would total $156m. That underscores the fact that amid the booming DVD market, the home entertainment groups of Hollywood’s major studios are pumping up profits. Source: Economic Times, Nov.7 MiscellaneousNews Corp.’s fiscal first quarter net profit jumped by more than two and a half times on improved newspaper business and solid results by its Fox unit in the U.S.
Net earning for the media and entertainment company rose to US $ 422m during the period ended Sept. 30 from US $162m a year earlier. Sales climbed 22% to US $ 4.65 billion.Earning before one-time items rose to US $ 386m from US $162m, far higher than US $ 357m, the most optimistic of analyst’s forecasts. Earnings before interest and tax also beat expectations, rising 31% to US $719m, despite including a US $117m loss from Italian pay-television operations.Most of a US $36m gain from one-time items was due to sale of shares in Sky Perfect Communications Inc. of Japan. But the bumper results didn’t prompt News Corp. to increase its full-year earning forecast, leading to a relatively muted market reaction.
As expected, newspaper earnings rebounded as circulation revenue recovered in U.K. and advertising sales increased in Australia. The growth came from “robust” worldwide home-entertainment sales of movies such as “Daredevil” and “Phone Booth”, and television titles as well as higher syndication profits from Twentieth Century Fox, News Corp. reported. Source: The Asian Wall Street Journal, Nov.7
Reuters yesterday reported 3rd quarter results slightly ahead of forecasts, continuing a recent run of positive news from the global news and electronic information group.
Shares in Reuters, which have more than doubled since March, recorded the biggest gain in the FTSE 100 yesterday, closing, up 6% or 14 ½ p at 249 p. “ Its now three quarters in succession where we’ve gotten it right or we’ve been ahead,” said Tom Grocer, the chief executive. Underlying recurring revenues fell by 10.9% in the three months to September 30 from £654m to £609m. This compared with a forecast decline of around 11%. Investors were also reassured by the nuance in Reuters’ guidance for the full year. An analyst at Numis Securities said,” It’s encouraging to see that revenue declines are coming in below expectations.” “At the interim stage the results were better than expected because of the company’s cost cutting programme. This time it’s because revenues were ahead of expectations,” he added. However Reuters cautioned that the nine-month reduction in the average rate of net cancellations has not yet spread to Europe. Total revenues at the group—Including those derived from its Instinet US electronic brokerage affiliate—fell by 8% from £855m-789m Pounds. Source: Financial Times, Oct.28
Compiled by
Saurabh Marya, BA Mass Comm (1st year)
Assisted by- Kumar Gandharva, BA Mass Comm (1st year)
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