DISCOVERING INDIA

Discovery Channel

#1 Non-fiction media Industry

• 1985 - Founded by John Hendricks– Cable Educational Network Inc.

• 1986 – Investments from– United Cable Television Corp– Cox Cable Communication Inc.– Tele-Communications Inc.Subscription increased to 7 million

• 1987 – Agreement with Mitsubishi Corporation to telecast programs in Japan

• 1990 – Launched television’s first Interactive Video – Discovery Interactive Library

Changed name to Discovery Communications Inc (DCI)

• 1994 – Launched Programs into few other Asian countries

• 1995 – Extended programs to Canada & India– Launched Online service – Discovery Channel

Online– Acquired Discovery Store Inc.– Launched Consumer Catalog - Discovery Channel

Catalog

• 1996 – Launched in Brazil(in Portuguese)– Entered into Europe (Germany, Austria &

Switzerland)– Subscription increased to 101.4 million

• 1997 – ranked #1 media brand by Total Research’s EquiTrend Study– Partnered with The Media Group to enter into

Turkey– JV with BBC to launch BBC America

• 2002 – world’s most widely distributed television brand, aired in over 155 countries with 700 million subscribers. 14 brands , 33 networks and 33 languages.

• 2010 - 1.5 billion Cumulative subscribers across 180 countries

Private Television in India

• Economic and Social reforms in 1991• High Demand from Indian Television Viewers• Star TV- Launched MTV; Star Plus; BBC

Prime Sports ; Star Chinese Channel• Zee TV –First Private owned Indian Channel• Discovery Channel Came to India in 1995

Market Need

• Need for Speciality Channel

• Infotainment Channel

• Parents worry about wrong influence of TV on their children

Discovering India

• In 1995 Indian Television market was dominated by entertainment channels

• First channel to provide Infotainment Programs• Programs related to nature; wildlife; science and

technology in English Discovery Channel

Animal Planet Discovery Travel and Living Discovery Science Discovery Turbo

• 3 million households in first year of operation

• Reached 10 million households by 1999

• 79.5 million cumulative subscriber base in 2011

Market Trends

• Launch of specialty or niche channels, which achieve breakeven faster because of lower investments

• Near immediate broadcast of movies upon release pushing up content acquisition costs; switchback to the outright exclusive rights model from syndication model to improve viewership ratings but at a higher cost

• Overseas markets gaining importance as an additional source of revenues for Indian broadcasters

Market Growth

• 1992- 412000 Urban Households in India• Nov 1992 – 1.3 million Households• 1994 – 11.8 million out of 32.4 million households• The Indian television industry, consisting of television

distribution, advertising and content, has reported a compounded annual growth rate (CAGR) of ~13.8% over the period 2005-2009 increasing to Rs. 26,550 crore.

• 2011- 71 million out of 130 million homes.• Growing at a robust rate of 8-10 %• Growth of Channels to 960 in 2010 from 120 in 2003.

Revenues

• Globally 1.5 billion Cumulative subscribers across 180 countries

• 79.5 million cumulative subscriber base in india• Global Revenue is US $ 3.5 billion• Asian Market Revenue is US $640 million• Indian market account for 10-12 % of Asian market is

US $ 69 million• India only accounts for 2% of global sales• Japan; India; Australia Largest market for DiscoveryAsia

MARKETING MIX

Product

• Programs aired in India possess at least 10%culturally neutral content.

• Discovery channel was known for its nature and animal programming

• Offered programs based on non-fiction focusing on themes of history; popular science and knowledge about different countries in the world.

Promotional • Sponsoring inter school quiz programs• Launching educator guide to help teachers use channel

as an educational source.• In 2002-conducted a contest for students -entered into tie up with Canon India Ltd -imaging contests in around 75 schools in 7 cities• Discovery Exhibition -students watched the channel’s program ‘Popular

Mechanics for Kids’ -created things under teachers directions -tie up with Colgate Dental Cream

• Discovery also came up with the novel concept of programming guides to provide information about Discovery programs for every quarter

Place

• Distribution channel was through LCOs and DTHs

• Discovery entered into a joint venture with Sony Entertainment Television (Sony), known as SET Discovery, with an equity structure of 74:26

• Discovery announced that it had launched a 24-hour feed in Tamil with its ties with Vijay TV

Price

• Pay channel

• Revenue generation model : Advertising & Subscription at 90 : 10

• 250-280 crore of Ad revenue annually

SWOT ANALYSIS

STRENGTHS

• Company’s broad diversification• Farsighted technological focus• Talent pool• Business of making video games-educational

power of video games• Association with established brands• Content Programming• India specific programs

WEAKNESSES

• Technological focus excludes the less tech-savvy demographic

• No single shows that are big hit

OPPORTUNITIES

• Educational media market

• Existing expansive online presence

• New era of HD Channels

• India is a Technological Hub; young nation with a thirst for knowledge.

THREATS

• No longer the only provider of streaming content online

• Under declaration of Subscribers by LCOs

Situation AnalysisPolitical

• Gulf war 1990• In 1990, Govt. of India liberalized the economy on the ground

of severe foreign exchange crisis. The process included:

Removal of the numerous restrictions on foreign trade and

The increased role of private equity in Indian market

Economic

• Liberalized Economy

• High Disposable Income of Consumers in a growing Economy.

• Dominating Economy in Asia-Pacific

Social

• The customer base is divided across different regional languages.

• The concept of non fiction channel were new to the indian public.

Technological

• The mode of distribution has to shift from analog to digital. Digitisation would also remove bandwidth constraints, facilitating carriage of a larger number of channels and thereby leading to rationalisation of carriage fees

• The requirement of large investments, to an extent, has slowed the progress of digitisation in the country.

• To fund the use of set-top boxes at the customer end and also to consolidate LCOs/ MSOs through buyouts

Marketing Strategies Implemented by Discovery

• New strategy ‘My time on Discovery’ implemented in October 2001

• Providing advertisers a focused platform to reach out to their key target group.

• Introduced Programming blocks targeting different viewer segments on basis of broadcast time.

Market Demograhics

• Six Time Bands introduced in August 2001 Sunrise( Weekdays 7am to 9 am) Discovery Kids ( weekdays 3pm to 4 pm) Action Zone (week days 4pm- 5pm; repeat at 11pm) Prime time (weekdays 8pm-11 pm) Friday showcase (9pm-11 pm) Super sundays( 7 am to midnight)

• Telecasts in Hindi & Regional Languages

New Strategies

• April 2002 extended to 9 time bandsWoman ‘s Hour (weekdays from noon to 1 pm)Amazing Animals Late night Discovery• Came up with Innovative Program "World Birth Day”• Launched India Hour ( Sundays)• Launched Tech Tuesday

Implications of New Strategy

• Viewership among women increased by 21 %

• Viewership among kids increased by 22%

• Prime Time band Viewer ship Increased by 43 %

• Differentiated discovery from NGC

Success Factors of Discovery in India

• Innovative Programs• Parents who were convinced about influence of TV

on children.• Programs aired in India possess at least 10%culturally

neutral content• Offered programs based on non-fiction focusing on

themes of history; popular science and knowledge about different countries in the world.

Crisis faced by Discovery Channel

• In 1999 Discovery became Pay channel charging Rs 5 per household

• High Consumer Demand; increased to 12 million within 6 weeks.

• Indian consumers perceived it to be channel airing nature and animal and regarded as educational channel

• Kiran Karnik former MD; “Discovery India has to rework its Brand

Positioning”

Reforms made by Karnik

• Extensive Brand building exercise to change its brand image in the country.

• Tied up with DD to air discovery programs in Hindi

• In 2000; entered in revenue sharing agreement with Vijay TV to air in Tamil

Change in Leadership• Deepak Shourie took over as MD of Discovery India

by 2000.• Realized Perception of consumers as niche channel

airing programs on wildlife and nature.• Market Research was conducted to understand

perception. Population of Viewers consisted of urban males

between 25-54 years. Around 60% of its viewership was from Sec-A and

Sec-B Popular with kids and their parents.

Future Plans

• Communicate the Sheer width and intense variety of programming on discovery.

• Future plans, India: Expand into newer urban and semi-urban territories. Promote Animal Planet. Launch new lifestyle channel

Key Learning's

• Adaptability of Discovery to suit the diverse customer base in India.

• Discovery ventured in to Niche channels which has become the Trend in a growing industry.

• Successful Brand Positioning done over a period of time.

• Successful Joint Ventures.