Group E

1
Group E

• Star TV

2
Business Concept

• Economical feasibility
• Asias number 1 satellite broadcaster
• Present the Asian perspective of Asia
• Produce a balanced east-west entertainment
• English Chinese / Multiple languages

3
Business Concept

• audience advertiser

Revenue
4
Key success factors

• First-mover advantage
• AsiaSat 1 as satellite platform
• Multiple-language broadcasts possible

5
Key success factors

• Supported by complementary resourcegt
  distribution network
• Re-broadcasting agreement
• Free to air programmes
• Hotels --- well-travelled business classes

6
Complementary Resources

• Complementary Technology
• Marketing
• Competitive Manufacturing
• Distribution
• Finance

7
Complementary Resources

• Complementary Technology
• Availability of reception dishes
• Cost of reception dishes
• Changing to use other satellite

8
Complementary Resources

• Marketing
• Advertising to the public
• Market segmentation
• International client advertisers
• Deep penetration
• Change of advertisement

9
Complementary Resources

• Competitive Manufacturing
• Ready-made programmes
• Cost
• Competition for better programme

10
Complementary Resources

• Distribution
• Free of charge
• Redistribution
• Competitors programmes

11
Sustainable Advantages
12
Complementary Resource

• Finance
• Funded by advertising
• Revenue was insufficiently covering costs
• Losses as high as 5 million per week

13
Complementary Resource

• Finance
• Funded by advertising
• Revenue was insufficient covering costs
• Losses as high as 5 million per week
• Source of fund raising was limited

14
Threat

• Potential competitors existed
• Planned to launch or replace their own satellites
• Allied with other channels
• gtSubstitution effect for the viewers

15
Lead Time Advantages

• First-mover advantages
• Extensive brand name recognition
• Considerable viewer loyalty
• Difficulties of the entry for the competitors
• Insufficient fund to set up
• Lack of experience
• Lack of client base

16
Sustainable Advantages
17
Strategic Options

• Pay TV
• In-house programming
• Strategic Alliances

18
Pay TV

• Pros
• Increase revenue
• Technical improvement makes this idea more
  commercially viable Increase revenue

19
Pay TV

• Cons
• Deter producers to release popular and newest
  programmes
• An efficient system to collect money is needed.
• Risk of killing new viewer growth.

20
In-house programming

• 1. Increase the degree of vertical integration
• Huge amount of money and experienced staffs is
  need.
• Guarantee the channel is long-lasting.
• 2. Acquire high-quality programmes

21
In-house programming

• Main consideration
• Less appealing for international advertisers.
• Big advertisers vs local advertisers.

22
Strategic Alliance

• Pros
• Financial support
• Experiences
• Cons
• Culture may differ from that of Stars

23
Recommendation

• Pay TV
• In house programming

24
Why Pay TV ?

• Standard TV structure
• 80 subscription fee
• 20 advertisement revenue
• Need subscription revenue

25
How to implement Pay TV

• Market segmentation strategy
• Urban area
• High living standard
• High population density
• Charge a fee
• Rural area
• Low living standard
• Low population density
• Free of charge

26
Why In house programming ?

• Support the Pay TV strategy
• Tailor made programme, fit the local market
• Attract local advertiser

27
Problems

• Lack of financial support
• Huge sum of money to implement the strategies
• Losing money, difficult to get loans
• Lack of experience
• Need hand on experience
• Take long time to produce

28
How to solve it ?

• Form strategic alliance
• Gain financial support
• Get help to produce high quality programme

29
Which company?

• TVB
• Ready made programmes popular in Asia market
• Richard Li would maintain control

30
Sustainable Advantage
31
Sustainable Advantage