Star Tv India Global Marketing Plan

STAR TV India Global Marketing Plan

Willie G. Burgess

Indiana Tech

INTRODUCTION

Rupert Murdoch’s News International launched SKY Television, February 5, 1989, in Britain.  It was a nine-channel satellite television service, public limited company.  Murdoch was bullish on cable and satellite service describing it as “the most important single advance since Caxton invented the printing press.”  Murdoch had nurtured a long-held ambition of breaking into the United Kingdom television industry.  On June 27, 1983, shareholders of Satellite Television accepted Murdoch’s £5 million offer for 65% of the company.

        The company lost £10 million in 1987, but Murdoch had the financial wherewithal to sustain the operation.  He created the SKY Television Network in June 1988.  To get around the British broadcasting ownership laws, Murdoch rented space on satellites that were owned by a Luxembourg company.

        In June of 2015, Murdoch decided to make a move to purchase the 60.1% of SKY that he did not own.  Getting control of 100 percent of SKY would give him a chance to control a European distribution network and the cross-promotional opportunities that would be afforded to SKY.  And in the internet-age, a cheap distribution network is available across local Internet providers.  With properties in Italy and Germany on its books, would be able to work the cross-promotional angle to huge advantage.

        In January of this year, James Murdoch returned as SKY chairman (Sweney, 2016).  Murdoch passes to his son his desire to gain more content, more leverage (Auletta, 2014).  Industry analysts believe what’s driving Murdoch’s urge to merge: the overused word “synergy”.  He is also seeking to take the risk out of capitalism (Auletta, 2014).  In his bid to acquire Time Warner, Murdoch agrees with the sentiments expressed by his bitter rival, Ted Turner,

You need to control everything.  You need to be like Rockefeller with Standard Oil. He had the oil fields, and he had the filling stations, and he had the pipelines and the trucks and everything to get the gas to the stations.  And they broke him up as a monopoly.  The game is over when they break you up.  But in the meantime you play to win. And you know you’ve won when the government stops you (Auletta, 2014).

Here’s where Murdoch’s head is at in relation to growing his Satellite and television media empire; as all the more consumers watch film and television online and constantly seek ways to cut their expensive monthly cable bills, Murdoch continues to predict what’s coming next.  His network is looking to deliver programming directly through the Internet.

STAR TV India

British colonial rule ended in India in 1947.  Since that time, India has been the world’s largest democracy.  The democratic process continues to work in the country, despite religious and ethnic differences. In less fortunate Third World countries, military coups afflict those populations.

India has approximately 1.1 billion in population.  With a more open and free market economy, socialism and political strife are on the downswing.  With large multinationals seeking to cut costs in the more developed world, India has been able to take advantage of the upsurge in outsourcing.  In the fields of electronics, telecommunications, and software, the country is benefitting from its local entrepreneurial talents (Johannson, 2006, p. 317).  The country has been able to sustain strong growth figures for several years.

Thanks to British colonial rule, the Indian educational system is the envy of many other countries.  As domestic opportunities for India’s citizens increased as the socialist policies and government controls fell by the wayside for privatization and free markets, the country experienced an uptick in the return of the educated elite (Johannson, 2006, p. 317).  Local Indian companies have had to adapt to the increased competition from entering multinationals.  They have had to pay attention to consumer needs, instead of assuming consumers would adapt to inferior products.

Emerging markets have to develop a more effective way of marketing.  They have to acquire a functioning distribution network.  It will take more than an infusion of capital and know-how (Johannson, 2006, p. 322).  How are NDC’s different from other developing countries?  There was usually hostility to capitalism, although the political systems tried to provide a basic path to a decent life and good elementary education.  The focus was on production and not consumption.  As consumer psychology rapidly changes, the local populations change their attitudes, preferences, and traditional lifestyles.  Customers in the NDC markets become more and more like consumers in more mature markets (Johannson, 2006, p. 323).

In India, 21st Century Fox owns STAR TV India, a media and entertainment company.  Their portfolio comprises forty-eight channels, in eight different languages.  STAR TV India offers television channels, dth cable system, channel distributor, channel broadcast, film production and distribution, and home shopping.  Rupert Murdoch obtained a 64 percent stake in STAR TV India.  He paid $525 million for that stake.  Fox Broadcasting’s content was the original product beamed out.  Murdoch was very aware of the synergies that were becoming available to the company:

“telecommunications have proved an unambiguous threat to totalitarian regimes everywhere…satellite broadcasting makes it possible for information-hungry residents of many closed societies to bypass state-controlled television channels” (UNK, newscorp.com, 2016).

By 1993, STAR TV India was third in Indian market share, behind Zee TV and Sony.  Over a four-year period, STAR TV India lost nearly $500 million.  The company then decided to target its programming to “mass instead of class” (UNK, newscorp.com, 2016).  The programming department chooses to begin creating Hindi-language programming.  Besides India, many of STAR TV India channels are also available in Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan and Maldives.  

        Given the usually low-incomes in the country, price was a significant factor in major decisions.  Often to get a foothold, companies have to reduce package sizes, simplify designs, and offer less service.  One challenge is if the product can be imitated, local entrepreneurs create “me-too” versions.  This can be overcome by establishing joint ventures with a local business (Johannson, 2006, p. 321).  The emerging Indian middle class seeks out global brands as a “status symbol”.  But the majority of the middle class is price sensitive.  This was a hurdle that many multinational companies did not anticipate as they moved into the Indian market.  Using strict controls on overhead costs allows a company to lower prices and still capture positive margins.