MxMIndia

Tag: recession

  • When the chips are down, look at the stars. Hemang Arunbhai Pandit, founder-MD of Ganeshaspeaks.com, tells us why the astrological forecasting media is "reasonably" recession-proof

    The Anchor: 5 reasons why astrology business is reasonably recession proof

    By Hemang Arunbhai Pandit

     

    1. Astrology is a trouble shooting-oriented business in most parts of India and Asia. People turn to astrology when they are in trouble during a recession, thereby generating business for astrologers.

     

    2. In good times, the business class generally wants to diversify and expand, again for which astrology guidance is generally taken as a safety measure and for good mahurats.

     

    3. Astrology in India is a precursor to a lot of rituals and other remedies in terms of gemstones, yantras, and so on. People spend money on a consultation, which is generally followed by an appropriate ritual or a remedy to ward off the trouble. This is also a good source of income for the astrologers.

     

    4. Outside India, mainly in Europe and the US, astrology is also used as a tool for self analysis and development. This process has nothing to do with recession, since people do it all the time, as long as it is not too expensive.

     

    5. Outside India, astrology is the primary tool for determining whether you are with your soulmate or not, especially for young girls. The process of dating and romance is inherently recession-proof, thereby lending the same status to astrology.

     

    Hemang Arunbhai Pandit is Founder, MD & CEO, GaneshaSpeaks.com

     

  • Channels which operate without a robust management team, a unique market position, and a defined target audience, won’t be able to garner sustained and loyal viewership feels Ashish Pherwani

    Analysis: Ashish Pherwani on when it’s right for a channel to pull the plug

    By Ashish Pherwani

     

    Rule of three

    The media business is largely governed by the ‘rule of three’ i.e. companies which are the top three or four players in a genre, or geography, tend to be profitable, while the rest tend to make losses in the long run.

     

    Accordingly, when a TV channel is unable to make it to the top of its segment for a long period of time, chances are it would have been hemorrhaging money for its owners, and that situation cannot last indefinitely.  Eventually, investors will pull the plug.

     

    Expensive programs as drivers

    TV channels which garner a majority of their viewership from reality TV shows and expensive films, and not from lower cost fiction programs, are also susceptible to being shut down in the medium to long term.

     

    Most large channels do not recover their direct variable reality content production and distribution costs through advertisements alone, but use such expensive programs as drivers to build channel loyalty and viewership for lower-cost fiction programs.  If this strategy does not work, and fiction shows continue to under-perform on a TV channel, the chances of broadcasters continuing the channel are remote even in the medium term.

     

    ‘Overhauls’ and ‘Makeovers’

    Over the last decade or so, most unsuccessful channels which have tried ‘overhauls’ and ‘makeovers’ that have failed to achieve their objectives within six to eight months, have eventually shut down their operations.  There are a few exceptions where channels are politically motivated, treated as marketing tools for large business houses, or those who believe they could build channel valuations for a profitable exit, but such companies are few and far between, and the recession of 2009 and the slowdown in 2011-12 have weeded out most of these.

     

    Foreign investors prefer less risky ventures

    In the case of foreign broadcasters enteringIndia, those with deep pockets and who believe in theIndiastory, which I certainly believe in, too, tend to stay invested inIndia.  But some foreign broadcasters prefer a less risky approach than creation of high-cost content.

     

    They prefer to exploit their existing global content library inIndia. Accordingly, more cautious and risk-averse foreign investors wouldn’t continue to fund under-performing TV channels indefinitely, and would rather take the less risky route.

     

    Viewership, the only asset

    To conclude, the only asset a channel has is viewership.  Channels which operate without a robust management team, a unique market position, and a defined target audience, won’t be able to garner sustained and loyal viewership.

     

    If channel management is able to make these three aspects fit seamlessly together, chances are the channel will succeed as a business, else, it would make business sense to pull the plug!

     

    Ashish Pherwani is Associate Director, Advisory Services, Ernst & Young Private Limited