“Quarter’s Five Forces Report”
The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E industry is on the cusp of a strong phase of growth. The entertainment industry continues to be dominated by the television segment, with the segment accounting for 44.24 per cent of revenue share in 2016, which is expected to grow further to 48.18 per cent by 2021.
Balajitelefilms limited is a leading content provider in the Indian entertainment industry and has been in business since 23 years. It has its business diversified in television industry, motion pictures and digital media. The company occupies a dominant space in the television content creation space, with the No.1 show on Indian television to its credit and all of its shows among the Top 50 on television. Currently its producer of several leading serials on major channels like Star Plus, 9X, Sony TV, Zee TV and SUN TV network.
Competitive Forces and Balaji Telefilms Ltd
Threat of new entrants:
Television content production is a capital intensive business and requires reasonably high capital investment. There are also many regulatory requirement related to the content produced.Balaji telefilms limited already has around 250+ hour of premium original and exclusive content. Also, production and distribution of motion pictures too need high investment. Making the barriers to enter production and distribution channel very high.
Threat of substitute:
In the current scenario there is threat to television shows from the digital media, younger generation shifting to online series rather than television shows. Making the threat of substitute high, althoughBalaji telefilms limited has diversified in digital media and launched ALTbalaji, the subscription based entertainment platform with six new shows and planning to add new shows every month, in order to mitigate the threat.
Bargaining power of buyers:
Balaji Telefilms limited sells it content to different broadcasters namely star TV, ZEE and Viacom. Since it is able to command higher TRP, hence, bargaining higher margin from broadcasters compared to its peers. Although due to some tie ups with certain broadcaster it has to sell and air its content on prime slot to that specific broadcaster. Therefore, making the bargaining power of buyers moderate.
Bargaining power of seller:
The suppliers in this case are the actors. Balaji Telefilms, being the largest entertainment software provider, evinces a lot of interest from aspiring actors who are eager to work with it. Thus the bargaining power of the aspiring actors is very low. However, once these aspirants become household names their demands increase resulting in higher salary costs to the company. Hence, the bargaining power is moderate.
Rivalry between existing players:
The rivalry between production houses is high and they try to poach each other’s actors, creative personnel and technicians. Since, Balaji telefilms is at leader’s position it easily attracts new talent and retention of current buyers and suppliers is easy. Further, they plan to earn the Intellectual Property (IP) rights of all the content that they create as to own it. By this making the rivalry forces low.
By:- Sunaina Vaidya.