Group EGroup E

Business ConceptBusiness Concept

Economical feasibilityEconomical feasibility Asia’s number 1 satellite broadcasterAsia’s number 1 satellite broadcaster Present the Asian perspective of AsiaPresent the Asian perspective of Asia Produce a balanced east-west entertainmentProduce a balanced east-west entertainment English + Chinese / Multiple languagesEnglish + Chinese / Multiple languages

Business ConceptBusiness Concept

audience advertiseraudience advertiser

RevenueRevenue

Key success factorsKey success factors

First-mover advantageFirst-mover advantage AsiaSat 1 as satellite platformAsiaSat 1 as satellite platform Multiple-language broadcasts possibleMultiple-language broadcasts possible

Key success factorsKey success factors

Supported by complementary resourceSupported by complementary resource===> distribution network===> distribution network

Re-broadcasting agreementRe-broadcasting agreement Free to air programmesFree to air programmes Hotels --- well-travelled business classesHotels --- well-travelled business classes

Complementary ResourcesComplementary Resources

Complementary TechnologyComplementary Technology MarketingMarketing Competitive ManufacturingCompetitive Manufacturing DistributionDistribution FinanceFinance

Complementary ResourcesComplementary Resources

Complementary TechnologyComplementary Technology– Availability of reception dishesAvailability of reception dishes– Cost of reception dishesCost of reception dishes– Changing to use other satelliteChanging to use other satellite

Complementary ResourcesComplementary Resources

MarketingMarketing– Advertising to the publicAdvertising to the public– Market segmentationMarket segmentation– International client advertisersInternational client advertisers– Deep penetrationDeep penetration– Change of advertisementChange of advertisement

Complementary ResourcesComplementary Resources

Competitive ManufacturingCompetitive Manufacturing– Ready-made programmesReady-made programmes– CostCost– Competition for better programmeCompetition for better programme

Complementary ResourcesComplementary Resources

DistributionDistribution– Free of chargeFree of charge– RedistributionRedistribution– Competitors’ programmesCompetitors’ programmes

Sustainable AdvantagesSustainable Advantages

Complementary Technology

Marketing

Competitive Manufacturing

Distribution

Complementary ResourceComplementary Resource

FinanceFinance– Funded by advertisingFunded by advertising– Revenue was insufficiently covering costsRevenue was insufficiently covering costs– Losses as high as $5 million per weekLosses as high as $5 million per week

Complementary ResourceComplementary Resource

FinanceFinance– Funded by advertisingFunded by advertising– Revenue was insufficient covering costsRevenue was insufficient covering costs– Losses as high as $5 million per weekLosses as high as $5 million per week– Source of fund raising was limitedSource of fund raising was limited

ThreatThreat

Potential competitors existedPotential competitors existed– Planned to launch or replace their own satellitesPlanned to launch or replace their own satellites– Allied with other channelsAllied with other channels

=>Substitution effect for the viewers=>Substitution effect for the viewers

Lead Time AdvantagesLead Time Advantages

First-mover advantagesFirst-mover advantages– Extensive brand name recognitionExtensive brand name recognition– Considerable viewer loyaltyConsiderable viewer loyalty

Difficulties of the entry for the competitorsDifficulties of the entry for the competitors– Insufficient fund to set upInsufficient fund to set up– Lack of experience Lack of experience – Lack of client baseLack of client base

Sustainable AdvantagesSustainable Advantages

Finance

Imitability

Lead Time

Strategic OptionsStrategic Options

Pay TVPay TV In-house programmingIn-house programming

Strategic AlliancesStrategic Alliances

Pay TVPay TV

Pros:Pros:– Increase revenueIncrease revenue

– Technical Technical improvement makes improvement makes this idea more this idea more commercially viable commercially viable Increase revenueIncrease revenue

America's cable TV's revenue's composition

Subscription Fee

Advertisement

Pay TVPay TV

Cons:Cons:– Deter producers to release popular and newest Deter producers to release popular and newest

programmesprogrammes– An efficient system to collect money is needed.An efficient system to collect money is needed.– Risk of killing new viewer growth.Risk of killing new viewer growth.

In-house programmingIn-house programming

1. 1. Increase the degree of vertical integrationIncrease the degree of vertical integration– Huge amount of money and experienced staffs Huge amount of money and experienced staffs

is need.is need.– Guarantee the channel is long-lasting.Guarantee the channel is long-lasting.

2. Acquire high-quality programmes2. Acquire high-quality programmes

In-house programmingIn-house programming

Main consideration:Main consideration:– Less appealing for international advertisers.Less appealing for international advertisers.– Big advertisers vs local advertisers.Big advertisers vs local advertisers.

Strategic AllianceStrategic Alliance

Pros:Pros:– Financial supportFinancial support– ExperiencesExperiences

Cons: Cons: – Culture may differ from that of Star’s Culture may differ from that of Star’s

RecommendationRecommendation

Pay TVPay TV

In house programmingIn house programming

Why Pay TV ?Why Pay TV ?

Standard TV structureStandard TV structure– 80% subscription fee80% subscription fee– 20% advertisement revenue20% advertisement revenue

Need subscription revenueNeed subscription revenue

How to implement Pay TVHow to implement Pay TV

Market segmentation strategyMarket segmentation strategy– Urban areaUrban area

» High living standardHigh living standard

» High population densityHigh population density

» Charge a feeCharge a fee

– Rural areaRural area» Low living standardLow living standard

» Low population densityLow population density

» Free of chargeFree of charge

Why In house programming ?Why In house programming ?

Support the Pay TV strategySupport the Pay TV strategy– Tailor made programme, fit the local marketTailor made programme, fit the local market

Attract local advertiserAttract local advertiser

ProblemsProblems

Lack of financial supportLack of financial support– Huge sum of money to implement the strategiesHuge sum of money to implement the strategies– Losing money, difficult to get loans Losing money, difficult to get loans

Lack of experienceLack of experience– Need hand on experienceNeed hand on experience– Take long time to produceTake long time to produce

How to solve it ?How to solve it ?

Form strategic alliance Form strategic alliance – Gain financial supportGain financial support– Get help to produce high quality programmeGet help to produce high quality programme

Which company?Which company?

TVBTVB

– Ready made programmes popular in Asia Ready made programmes popular in Asia marketmarket

– Richard Li would maintain controlRichard Li would maintain control

Sustainable AdvantageSustainable Advantage

Complementary TechMarketingCompetitivemanufacturingDistributionFinanceImitabilityLead time

Sustainable AdvantageSustainable Advantage

Complementary TechMarketingCompetitivemanufacturingDistributionFinanceImitabilityLead time