THE TELEVISION

INDUSTRY BY:
Anadi Sinha
Anirbam Majumdar
Piyush Agrawal
Pankaj Sinha
Roja Tithi
WHAT ARE PORTERS FIVE
FORCES?
 Threat of new entrants
Sunk costs- Large capital costs are required for
branding, advertising and creating a hype, and
hence this limits the entry of newer players in the TV
news industry.

Advantage of incumbents- Incumbents have a

strategic upper hand over new channels due to their
popularity and experience.

Retaliation of incumbents- There are very few

ways for incumbents to retaliate against the new
entrants if they manage to report quality news and
steadily build their reputation.

Hence threat to new entrants is average

Threat of Substitutes

Cross price elasticity of demand- The cross price elasticity

of demand of a TV news channel is very high, since if the
subscription charge of a particular channel is higher than
average, it is bound to lose viewership as people have a lot of
options to choose from. Also there are several other popular
options like newspapers, magazines, online news, etc.

Switching costs- The switching costs (if any) are very

negligible. It costs almost nothing to switch from one news
channel to another, or to other sources of news as stated
above.

Hence, it is clear that there is a high threat of substitutes in the TV

news channel industry.
 Bargaining Power of Buyers
There is no monopsony in the TV news industry as
almost the entire nation is curious about the daily
happenings in the country.

There is no monopoly in the TV news industry as

there are a large no. of news channels, which gives
The buyers of TV news the buyers a lot of options.
channels are
Viewers
DTH and Cable There is no segmentation of buyers as the TV news
Network Providers industry focuses on delivering news to the general
Advertisers mass, and hence, any form of segmentation
contradicts the industrys purpose.

These points show that the TV news market is very

competitive, which means the buyers (i.e. the general
mass) have Average bargaining powers.
Bargaining Power of Suppliers
News channels get news
information from:
News Agencies like
PTI,AFP and Reuters

Stringers (Freelance
Journalist)

Seller Concentration is high because news

agencies like PTI hold majority of the market(PTI
holds a market share of 90% in Indian news agency
market)
There are not many substitutes for suppliers
product.
Suppliers can forward integrate.

Thus the bargaining power of the suppliers is high

 Intensity of Rivalry
There are several competitors in the TV news industry in
the form of various news channels.

Incentives to fight are high, since exit costs are high. Also
there isnt much scope for differentiation as most of the
news that are reported are about day to day events which
dont vary much from channel to channel.

Tacit coordination, which involves implicitly holding higher

prices, is not feasible as then people would go for the
several other cheaper substitutes like newspapers, online
news, radio, etc.

Hence, the rivalry in the TV news industry is quite intense.

BIG QUESTION
Whether leaving Times Now
and entering the TV news
industry with a new
channel Republic TV be a
wise decision for Arnab
Goswami ?
 A Look At Times Now
15 October 2016 to 21 October 2016

WEEKLY
Times Now has a viewership share of 35% by
IMPRESSIONS (IN number of viewers ,in English News Channel
000'S) SUM Industry

Weekly Impressions (in 000's) sum

632

289

259

209

115

T I ME S CNN INDIA NDTV BBC

N OW N EW S 1 8 TODAY 24X7 W ORLD
N EW S
 Arnab Goswamis Role in Times Now
Arnab Goswami is the Editor-in chief and Times Nows entire sales strategy,
face of Times Now.He is the money-spinner in fact, is built around Arnab !
for the company with his flagship program
Newshour.

Times Now generates revenue of 150 Crore

Rupees from subscription and another 40
crores from other sources like ads yearly,
while Newshour brand is valued between
80-90 Crore Rupees.
 Conclusion
The market of News Channels in India is
highly competitive and the Porter Five
Forces analysis shows that the News
Channel industry as a whole is not a very
profitable business venture but ..
The brand name of Newshour
and Arnab is very large ,
which made Times Now
successful in his leadership as
the Editor-in Chief

So , we conclude that Arnab should proceed with

his decision to leave Times Now and form
Republic TV
Thank You