Doordarshan's Problems

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Themes: Brand Management
Period : 1994-2001
Organization : Doordarshan
Pub Date : 2002
Countries : India
Industry : Media, Entertainment & Information

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Case Code : BSTR012
Case Length : 8 Pages
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Cable Onslaught

In 1984, cable television made its foray in India and it was considered a cost effective alternative to watching borrowed cassettes of feature films. Local entrepreneurs saw in this an opportunity, as investments required to install a cable network were low. In the early 1990's many private channels were launched to tap the nascent cable television in India.

Launched in 1992, Zee TV was the driver of the expansion of cable television in India. During 1992-94, there was rapid increase in the number of cable connections in western and Northern India.

In southern India, the states of Tamil Nadu and Andhra Pradesh saw an accelerated growth in Tamil and Telugu channels in the mid 1990s.

Though by 2000 DD had an incredible reach of 70 mn homes in comparison to C&S's reach to only 30 mn homes, (Refer Table II for growth of cable and satellite penetration in India) it could not turn this network into an advantage.

In the urban households, DD's presence was miniscule with hardly any viewers for its programmes. Few people watched its programmes in the urban areas. DD was also lagging behind the private channels in terms of ad revenues as its TVRs were very low compared to the TVRs of programmes on private channel.

TABLE II
CABLE TV GROWTH IN URBAN INDIA

Year	Number of households with Cable TV (in million)
1992	1.2
1993	3.3
1994	11.8
1995	15
1996	18
1999	22
2000	30

Source: www.indiacabletv.com

Sagging Revenues

During 1996-99, TV advertisement market grew by 76%, but DD's revenue from advertisement registered a negative growth (Refer to Table III). Though DD continued to be number one in overall audience share, it lost out on viewership segments with the highest purchasing power. In 1998-99, DD channels revenues from advertisements were to the tune of Rs 4 bn (25.8% of the market). Zee TV was close at Rs 3.85 bn, Sony at Rs 2.53 bn, and Star Channels⁸ at Rs 2 bn.

However, in case of private channels revenues from the ads have grown significantly compared to DD. During the period 1996-99, Zee registered growth of 122% in ad revenues, Sony 299% and Star channels 206%. During the same period, DD's ad revenues had gone down by 70.17%.

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8] Star channels include Star plus, Star Gold, Star News, Star movies etc.