An in-depth analysis of the role of technology and digital media on the viewership behaviour in the media industry involving American Broadcasting Co. (ABC)USA

and Star TV India.

Submitted By: Submitted To:

Siddharth Subhankar Prof. Debashish Choudhary

BBA-3 Continent

A1810411006

ACKNOWLEDGEMENT

My deepest appreciation goes to Prof. Dr. Debashish Choudhury who provided helpful comments and suggestions. I also owe a very important debt to Dr. Shyamalendu Niyogi who provided technical help and sincere encouragement. I would also like to express my gratitude to my family for their moral support and warm encouragements.

DECLARATIONI hereby declare that the project report entitled “A

comprehensive study and analysis of the marketing

strategy in the broadcasting industry incorporating

content creation, consumer approach and retention on

the basis of culture as well as the impact of technology

on broadcasting involving the companies American

Broadcasting Co. (ABC) USA and Star TV India.”

submitted by me, Siddharth Subhankar, to California

State University, San Bernardino in partial fulfilment of

the requirement for the award of the degree of BBA in

International Business is a record of bonafide project

work carried out by me under the guidance of Prof. Dr.

Debashish Choudhury. I further declare that the work

reported in this project has not been submitted and will

not be submitted, either in part or in full, for the award

of any other degree or diploma in this institute or any

other institute or university.

Table of ContentsAn in-depth analysis of the role of technology and digital media on the viewership behaviour in the media industry involving American Broadcasting Co. (ABC)USA and Star TV India......................................................................................................1

ACKNOWLEDGEMENT..............................................................................................2

DECLARATION..........................................................................................................3

Research Methodology............................................................................................5

Objectives.............................................................................................................5

Primary Objective..............................................................................................5

Secondary Objective..........................................................................................5

Sample Design....................................................................................................6

Data...................................................................................................................6

Limitations of the study.....................................................................................6

Review of Literature.................................................................................................7

Sectoral Profile.......................................................................................................13

The American Media Industry.............................................................................18

The Indian Media Industry..................................................................................19

Company Profile.....................................................................................................21

ABC USA..............................................................................................................21

Star India.............................................................................................................24

Findings & Technological Impact on the industry..................................................27

Analysis..................................................................................................................36

Recommendations.................................................................................................38

Conclusion..............................................................................................................40

References.............................................................................................................41

Research Methodology

Objectives

Primary Objective

Enhancement of viewership & revenue for ABC USA &

Star India

Secondary Objective

Identifying the content created by ABC & Star India

Analysing how new technology is playing a role in

impacting the viewership in broadcasting media

Analysis how digital media is bringing a change in the

way consumers view content

Finding how digital advertising can generate revenue

for the mentioned companies

Provision of findings & recommendations where both can broaden the scope of their reach

Sample Design

The data that is being incorporated in the report is from

secondary sources therefore the sample design is not

available.

Data

Data collection method will be based on secondary

method as the information available is in the form of

secondary information.

Limitations of the study

The primary data is not available to analyse inside the report therefore no detailed implications can be mentioned.

Review of Literature

Broadcast networks and television stations usually acquire a

significant portion of the entertainment and media industry.

Furthermore they are also able to capture quite a huge share of

the content that they broadcast which come from sources such

as major movie producers, sport leagues, television & movie

studios. The acquired rights that have been claimed by the

broadcasting houses can range from small production houses

and contracts, season long sitcoms & dramas, to multiyear

multibillion dollar contracts for sports such as football,

basketball, cricket etc.

In the recent years, the access of television has become

available in a higher concentration through Internet. Now

content is available through websites such as Netflix, Hulu,

CBS.com etc. In 2008, Horace Newcomb of University of

Georgia said “It’s too difficult to choose among such choices”.

This was in regards to the slight decline in the television

industry due to the emergence of internet based television. Yet

at the same time, there was a 9.7% increase in the sales of

DirectTV during Q3 of 2009. According to DirectTV, their

assumption is that despite America’s poor economy, viewers

are still going for cable television. But the main concern that

remains is that there is a slow but steady shift towards online

content which can be accessed anytime and anywhere.

This trend has left many scholars and experts in this field on

divided opinions as they see that this sector can go either way.

According to Tim Arango of the New York Times “In the last 3

months of 2008, the broadcasting networks have lost nearly 3

million viewers i.e. nearly 7 per cent of the total number of

television viewers in all of USA.” With this being said, Hallvard

Moe (2008) of the University of Bergen argues that

“Broadcasting is likely to remain central to our everyday lives

and thus central to the public”. The introduction of high speed

internet, live streaming, applications, smartphones & tablets

has made it a lot easier to gain access to television shows

anytime and anywhere you want to. Based on many of the new

media outlets that are currently available to consumers, it is

becoming somewhat of a necessity for broadcasting companies

bringing in new techniques and methods which are going to be

required to change their current business operations in order to

keep up with market demand and new trends to ensure

survival.

But yet, with the new advancements in technology, there

comes some trade-offs with them. What format are the shows

to be shown in, how frequently they need to be converted to

High Definition, how frequently do they need to be uploaded

onto the servers, and how big do the file sizes need to be to

ensure optimum use of bandwidth.

While many of the broadcasting companies will move forward

towards showing content online and in real time, it is not

possible to download entire programs. Additionally, large

network events such as the Super Bowl, Academy Awards, the

Grammys & Emmys are not available in full format as well as

content online, as they are exclusive to specific networks who

buy off the rights to broadcast these programs.

Due to the constant presence of the broadcasting & cable

televisions in homes, an opportunity is created to reach out to

more and more consumers who have not adopted the

technological breakthroughs in this industry. In many places

such as in India, people only have access to only televisions and

are apparently not even aware of the applications, and

websites where they can see the programs they like. In India,

the advent of DTH television during the past two years has

been immense. The introduction of DTH in the country was a

boon for people who resided in areas that were rural and hilly

and where the availability of television network was scarce.

Furthermore, in various metros like Delhi, Mumbai, Chennai,

Kolkata, Bangalore etc. the presence of easy availability of DTH

has benefitted people who tend to shift their homes or who are

just too busy with their work life that they find the online

recharge system of DTH to be highly efficient. Also, the steady

rise in economic growth has been a very key catalyst, which has

been reflected in a number of trends including household

growth and urbanization, rising TV penetration, and higher

incomes and improved affordability.

From the above points that have been made, we have been

able to identify that technology is playing a somewhat neutral

role in today’s broadcasting scenario.

At the same time, advertising is facing a hard time due to the

trends in technology. With Nielsen’s decision to combine digital

viewership and merging it with the standard television

audience data resulting in a combined national television

rating, it is going to become difficult for advertising firms to

determine as to how many viewers actually watch their ads.

According to an article of Brian Steinberg of Advertising Age in

2010, “At present, advertisers pay based solely on the number

of viewers who see commercials during a particular show as

many as three days after the program airs. That measure,

known as ‘C3,’ and created to take into account the growing

number of viewers playing back programs on digital video

recorders, was introduced in 2007” So, it is highly possible that

the number of people that Nielsen will report in its ratings

watching the same program, are a lot lower than the actual

number who are watching that same program. This is because

Nielsen will use only those in its online viewing data who are

going to watch the same program with the same commercials

that have been aired on national TV. This could leave many

viewing occasions unrecorded as they do not necessarily run

the same ads that are run on national television and can leave

the market fragmented. This becomes a concern for the

advertising conglomerates because they determine the cost of

paying the broadcast networks on the basis of how many

people have watched their advertisements. And they

determine online costs separately. Therefore for advertising

companies, it will become a problem when these viewers will

be combined as one as it will be a hindrance in determining the

price per viewer.

Sectoral Profile

The media industry comprises of many businesses that have

been operating for a long time such as print, television

broadcasting, digital content creation & radio. As the demand

for information and content grows more and more, the

transition of this industry is becoming evident. People want

information at hand. In this age, the possibility of having a delay

or a lag in getting any sort of information or content can be

devastating for many businesses. The consumers will flock

together to those who will give them what they want. The

aspect or right timing is of utmost value nowadays. The days of

procuring content conservatively like print, television and radio

are now gone. A new entrant in the form of digital media is

creating waves among the masses. The world of traditional

media is under increasing pressure from the digital landscape

and consumers are facing an ever-growing array on content

choices.

Consumers all around the world continue to spend their hard-

earned money on media and entertainment, from acquiring

broadband access to reading books, magazines, and

newspapers, subscribing to TV and satellite radio, buying music,

watching in-home videos, and playing video games. As a result,

global spending on media and entertainment grew 5.8 % in

2012.

In North America, itself, there was a 4.5% increase in the

amount of money that was spent on entertainment and media.

The major reasons were a boost in broadband access and

digital advertising.

At the same time, the growth in Asia was measured at around

8.5 % with China being a major contributor in the industry with

a 16.4% growth by itself. Excluding China, the growth in all of

Asia can be measured at 6.1%.

In Europe, Middle East & Africa i.e. EMEA countries, as a whole

the increased combined spending was 3.0%. Among them all,

Western Europe performed the poorest by just having 0.9%

increase in spending as compared to 2009 when its spending

fell by 1.9%. In contrast, Middle Eastern & African countries

growth was measured at around 21.3% which reflects the

increase in media penetration through increased broadband

access. In Central & Eastern Europe, there was an increase of

8.5%.

Latin America showed the best growth among all the regions

with an increase of 13.3%. This region as compared to others is

still in the early stages of development and increases in

broadband networks and in-home entertainment systems as

the primary factors of growth.

Global media is expected to grow at a projected rate of 6.1%

compound annual rate. The expectation is that Western Europe

and North America will be the slowest growing regions but

Central & East Europe & Asia will continue to grow at high

single digit rates. Subsequently, Middle Eastern & African

regions will continue to grow exponentially in media spending

with double digit compound growth till 2017.

The American Media Industry

In USA, the use of television is growing steadily as a medium of

entertainment. In this country, the whole of media industry is

completely controlled by 6 media giants who currently control

a now staggering 90% of what we watch, read or listen. In 1983,

the media industry was controlled by around 50 companies.

Come 2012, the same amount of the media market is

controlled by these 6 major companies. These 6 companies are:

GE which owns NBC, Comcast &Universal Pictures.

News-Corp which owns Fox, Wall Street Journal & New

York Post

Disney which owns ABC, Miramax, Marvel Studios, ESPN &

Pixar

Viacom which owns MTV, Nick Jr. & Paramount Pictures

Time Warner which owns CNN, HBO & Warner Bros.

CBS which owns Showtime, Smithsonian channel &

NFL.com

Combining the Big Six together, the total revenue for 2012 was

around $275.9 billion. They control nearly 70% of all cable

television in USA and they have monopolies in cities such as

NYC & Chicago.

According to Nielsen’s 2014 Advance National TV Household

Universe Estimate (UE), there are 115.6 million TV homes in the

U.S., up 1.2% from the 2012-2013 estimate of 114.2 million.

On the contrary, according to Wayne Friedman of Media Daily

News, the number of U.S. digital TV users -- those who view at

least one TV show per month via the Internet -- will climb 37%

in four years to 145 million in 2017, from 106 million in 2012.

This amounts to digital TV user growth climbing at a 6.9%

compound annual growth rate -- a higher increase than

previously forecast in August 2012.

The Indian Media Industry

The Indian media industry is one of the largest in the world. It

comprises of various television stations, production houses,

advertising agencies, radio channels, newspapers, magazines

and Internet-based websites. Many of the media is controlled

by large media houses and conglomerates which are for-profit

organisations and reap revenue from advertising, subscriptions

and sale of copyrighted material. India has more than 70,000

newspapers and over nearly 690 satellite channels in multiple

languages where more than 80 are news channels, and is the

biggest newspaper market in the world with over 100 million

copies sold in one day.

The media industry is expected to grow at a compound annual

growth rate of 18% to about Rs. 2245 billion by 2017. The

industry is incorporated of print, electronic, radio, internet and

outdoor segments. As the Indian government is aggressively

pushing in for digitization of TV, Multi System Cable Operators

(MSOs) are expected to lose 15-20% of their subscribers to DTH

(direct-to-home) or satellite services. Digitization will facilitate

increased number of channels and high quality viewing. The

Information and Broadcasting (I&B) ministry has already

completed the second phase of digitization, which involved

digitizing 16m cable TV houses in 38 cities by April 1, 2013. It

aims to complete the third phase of digitization which includes

all other urban areas (municipal corporations/ municipalities)

by September 30, 2014. The rest of the country is likely to be

covered by December 2014 under the fourth phase of

digitization. The digital subscribers are expected to outdo the

analog subscribers by 2013-14.

The broadcasting industry, according to PWC, is estimated at

Rs. 38,500 crore in 2011-12 is projected to grow at a CAGR of

12 percent to reach Rs. 54,720 crore by 2014. Continuation of

digitization of distribution infrastructure and the demand for

regional and niche content are key drivers of growth in this

segment.

Company Profile

ABC USA

The American Broadcasting Company or ABC is an American

television broadcasting network which is primarily viewed in

USA & Canada. It was formed in early 1943, from the former

NBC Blue radio network. It is now owned by The Walt Disney

Company which acquired it in 1996 and is now part of the

Disney-ABC Television Group. ABC’s first television broadcast

was in the year 1948. Since a long time ABC has been a part of

the “Big Three television networks” and has contributed

significantly to the American pop-culture with classics such as

Zorro, The Untouchables, The Brady Brunch, Happy Days, The

Fugitive etc. More recent popular titles include:

Lost

Modern family

Castle, Revenge

Desperate Housewives

Grey’s Anatomy

Once Upon A time

Nashville

Agents of Shield

Scandal

The Goldbergs

Jimmy Kimmel Live

Their reality shows include:

America's Funniest Home Videos

Extreme Makeover: Home Edition

Dancing with the Stars

Wipeout

The Bachelor

The Bachelorette

Extreme Weight Loss

Secret Millionaire

Their news shows include:

ABC World News

Good Morning America

20/20

Nightline This Week

America This Morning

Primetime

World News Now

Star India

Star India is an Indian Median and Entertainment company

headquartered in Mumbai, India. The company produces and

broadcasts satellite television programs and content all around

Asia. The company`s services also include filmed

entertainment, television production, cable systems, direct-to-

home services, terrestrial television broadcasting, wireless, and

digital services.

It has various channels which show various forms of

entertainment such as sports, dramas, soap operas, movies,

reality shows etc.

Star India also manages News Corporation's interests in seven

ventures including DTH operator Tata Sky; cable system

Hathway, channel distributor Media Pro Enterprise, south

Indian broadcast business of STAR Vijay, the film producer and

distributor Fox Star Studios India and STAR CJ Alive Home

Shopping.

Star India entered into High Definition broadcasting on 15 April

2011 with the launch of the HD versions of its channels,

including Star Plus HD, Star Movies HD, Star World HD, Star

Gold HD and National Geographic Channel India HD.

Their Channels are:

Star Plus: Hindi General Entertainment Programs

especially soap operas

Star Gold: Hindi movie channel

Star Movies: English movie channel

Star World: English language program that broadcasts

American programs

Star Movies Action: English channel showing action movies

Life OK: Hindi General entertainment channel

Movies OK: Current Hindi movies channel

Channel V India: Hindi music video channel

Star Utsav: Marathi channel which shows some of the

popular programs from STAR Plus

Star Sports 1: A sports channel

Star Sports 2: A sports channel

Star Sports 3: 24X7 Hindi sports channel consisting of full

cricket programming and broadcast by ESPN STAR Sports

(ESS), a Joint Venture with ESPN International

Star Sports 4: broadcast by ESPN STAR Sports (ESS), a Joint

Venture with ESPN International

Star Jalsha: Bengali-language general entertainment

channel.

Jalsha Movies: Bengali-language movie channel

Star Pravah: Marathi-language general entertainment

channel in India.

Star Vijay: Tamil-language general entertainment channel.

Asianet: Malayalam-language general entertainment

channel.

National Geographic Channel India

Nat Geo Wild

Fox Crime

Fox Traveller

Findings & Technological Impact on the industry

In the modern world of today, technology plays a big part in the

media industry. There are advantages and disadvantages to

this. The advantage of new technology is that it keeps us up to

date with current affairs. Information is more accessible

especially with the internet and the use of WAP (Wireless

Application Protocol) technology and message alerts on mobile

phones. The Internet, undisputedly, offers the most variety

when it comes to alternative television technologies, however,

it is not as large of a global influence on television as it is in the

United States. Nowadays many television channels have

created websites to help with television viewing without using

a television itself.

In the USA, digital TV viewers will cross a critical tipping point --

surpassing 50% of the USA Internet user population. Those

users who watch at least one movie per month on any Internet-

capable device will climb to 115 million in 2017 from nearly 80

million in 2012, a 9.7% annual growth rate. It was reported by

eMarketer, the U.S. streaming revenues of $2.19 billion for

2012, growing moderately from quarter-to-quarter, with its

U.S. rental DVD revenues totalling $1.14 billion and declining

each quarter.

For as widespread as television on the Internet is, television via

mobile devices is rapidly growing, especially with advances with

the smartphones. Television is becoming more interactive

through the use of telephony as a return channel, particularly

with the rapid spread of SMS an MMS messaging on mobile

phones. Fundamentally, this changes the entire use of

television as an outlet because of the shift from connecting

with the general public, to connecting on an individual level.

This provides a completely alternative way of individualizing

advertising based on locations, interests, common searches,

and messaging.

In India, DTH revolution along with live streaming of TV

channels changed the face of broadcasting industry soon after

its inception. DTH was successful in addressing the needs of

rural as well urban audiences. DTH was a boon to rural people

who resided in hilly and remote villages. At same time urban

audiences in metros like Delhi, Mumbai, Chennai and

Bangalore, who frequently shift their rented house welcomed

DTH with open arms as they can shift the small antenna while

shifting their house and on top of that online recharge

procedure helps them to recharge and access TV whenever

they want.

Smartphones, tablets and now even smart television sets

provide interactive applications to users which enable cutting

edge services like live streaming through the Internet. Delivery

of content through the data networks is all set to get a boost

with imminent 4G rollout, while at the same time cable

networks in the country are rapidly moving towards digitization

with the regulator having set a deadline of June 2012 for

metros. Major developments in the area of digitization of

single-screen theatres and multiplexes wherein movies are

streamed directly via satellite to the theatre resulting in cost

savings and logistical complexities of physical print delivery.

Further, Video-On-Demand (VoD) services are being rolled out

through a cross-section of services from DTH to IP based

networks. It will be interesting to observe how the digitization

of cable networks would impact growth in VoD. Last but

significant is the emergence of new toys on the block – tablets

and smartphones which are fast replacing television and radio

sets as the primary last mile enablers of content delivery.

Digital advertising is expected to grow at a monumental rate. Below are the facts and figures of how digital advertising will be acting in the next few years:

Analysis

From our findings, we have been able to ascertain as to what is

happening in the current media scenario:

The Global spending on media and entertainment industry

is increasing year by year with Asian, Latin & Middle

Eastern countries growing exponentially due to broadband

access in these regions. The media and entertainment

industry is growing content wise and the ability of people

to access media with the help of new technology is

providing them greater access.

The American television industry’s viewership is going

down steadily and there is hard evidence that people are

now going for digital services such as YouTube, Netflix,

Hulu Plus, Amazon Instant Video, HBO Go etc. People are

looking forward to having content with them anytime and

anywhere and the internet growth is rated at around 35%

CAGR.

The Indian consumers are now opening up to the idea of

having internet based content. The drawback here in India

is that internet based content is not readily available

through the companies’ websites and a majority of them

can be accessed through television viewing only. But with

the advent of new technology, rising purchasing power

and people’s approval of mobile phones and tablets as an

acceptable form of entertainment, web-based content is

an irresistible opportunity for broadcasting companies to

make content available online in huge volumes.

Digital advertising is going to boom in the next few years.

By 2018, digital advertising is going to own a global market

share of $994 bn. This comes as part of the package that

broadcast television channels are taking to internet based

content and this model is going to generate revenue for

them. Advertisers will be teaming up with the

broadcasters to showcase ads online which can be easily

accessible to the viewers.

Recommendations

Technological adaptation on a large scale : As the need of

the consumer to have quality content at any time possible

is growing, there must be certain adaptation techniques

that must be taken by broadcasting companies so that

they can provide consumers with whatever content they

need. ABC has started incorporating its content on its

official website but are yet to come up with a mobile

version of their video streaming website. Another way

they can increase viewership is that they can introduce

applications for streaming content anytime and anywhere.

With the increase in the use of smartphones and tablets

and the advancing penetration of internet and broadband

all over USA and the world itself, it is an irresistible

opportunity to grow big. The same can be said for Star

India which can capitalise on this rising trend as they

haven’t really gone to the same measures that ABC has.

Enhancing content quality: With the number of online

viewers on the rise, it is becoming imperative for

broadcasting companies to make content that can satisfy

the viewers. Also the content can be made in such a way

that it can relate to the viewers in question i.e. Generation

Y. ABC already has some shows that are modern and

connect with the new generation of viewers. Star on the

other hand still broadcasts shows that are traditional in

nature with the themes of joint families, melodrama etc.

being unambiguous. They have to make content so that

the new generation can connect with it and not only

middle aged people.

Enhancing focus on digital advertising : As the realm of

digital advertising grows, it is a straight and clear

opportunity for broadcast companies to collaborate it in

their online content to raise their revenue channel. This

model will bring about more money into the broadcast

companies and will allow for more content creation and a

better advertising scenario. With digital advertising

creating nearly $994 bn dollars by 2018, it is precisely

obvious that this is the next big thing in advertising and

seamless collaboration with advertising agencies and

creation of new and interactive digital ads will enhance the

companies’ money inflow.

ConclusionAs we move forward in time, the importance of the media and

entertainment sector is rising on a very high rate. People are

wanting to have a more convenient and hassle free method to

gain access to quality content at the most efficient price

possible. Technology is going to play a huge role in this sector

and is definitely going to change its face and in the future we

can see that television entertainment will be accessed on

personal devices rather than on large televisions themselves.

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