Electronic Media in Pakistan

Television, radio, mobile TV, and internet are major segments of electronic media. We select TV channels for analyzing external environment, chasing up key trends impacting the industry and focus on one organization to analyze internal factors which are necessary to run a channel successfully.

TV Channels History and Performance

Pakistan television network was in monopoly for decades in Pakistan, as this was operated by Govt. of Pakistan. In 2004 due to the development in technology, launching of cable TV and people growing interest of watching TV creates platform for big organizations to enter in this business. To control channels performance Govt. pass an ordinance for media industry and PEMRA is a result of this initiative. It is the sole regulatory authority to control channel broadcasting, and make code of conduct for channels. Below is the graph for satellite TV channels license history.

In 2007/08 almost 50 STV licenses were accepted by authority, and in last seven years total 85 channels start their operations in Pakistan. Satellite TV are operated and broadcasted from Pakistan, while other type is landing rights permission. In this type local investors operate an international channel, and there are total 26 channels operated in Pakistan as of date 2010.

Category of channels
There are seven different categories of channels in STV and landing rights. Each category has various players in both STV and landing rights. Following table shows number of channels for each category,

Entertainment and news channels are the major segments for media industry, 50% industry is based on current affairs and entertainment programs. Regional language channels (City-042, Punjab TV, Khyber TV, and Roohi TV) are the third largest segment in the industry.

Cable TV network
For satellite TV channels cable TV is an important medium to show their programs and reach their viewers in different geographical areas. Below is the graph for cable TV operators growth in last five years,

Currently 2500 operators are working in Pakistan, and there industry shows an continuous growth over a period of time.

License Fees
PEMRA charge some 20 million for license permission and same what channels has to pay annually to keep activate their license. Increase in PEMRA revenue from license fees shows the growth and money involvement in the media industry.

Revenue from STV has been growing to 77% from o8 to 09. Which indicates that channels are performing well in industry, and earn enough money to pay license fees to PEMRA.

TV sets in Pakistan
To find number of people watch channels is difficult, but to trace haw many TV sets sold till date and what is growth in TV set industry will determine the growth in media industry. Currently 12-million TV channels are owned by Pakistanis.

The table is taken from NIPS (National institute of population studies), in row 2 television possession size is given in all over Pakistan.

Strategic Groups of Media Industry

In Pakistan, 85 satellite channels are operating. STV are operated in 7 different categories, such as news, entertainment, regional language, sports, health, education and agriculture. There are few giant groups who own number of channels in industry, Jang, ARY, AAJ, Express and Dawn are key players who own maximum STV in Pakistan. PTV is also a big player in industry and it is owned by Govt. of Pakistan.

(Market share data is given at the end of report) Geo held more then 25% of electronic media industry share and a market leader. Four channels are in Geo portfolio and all channels has minimum 5% share of industry. ARY operate in industry with maximum channels. ARY has satellite TV license for all channels and landing rights of HBO and nickelodeon channels. ARY held 15% market share with its portfolio. PTV also a key player in market as it take 12% market share with only two channels. Express and aaj TV are small players as have only 5% market share.

Value chain analysis of GEO

On time broadcasting, quality of programs and effective services are the important variable which adds value to viewers and buyers. Geo pay attention to each activity independently and integrate all valuable activities with firm own activities and activities of firm stakeholders.

Primary Activities
Inbound activity
As geo is a satellite TV, it receives programs from international market via satellite. While programs from local suppliers are transferred in hard form. Finished goods: geo outsource programs, talk shows, soaps, cricket matches and international news from various suppliers. All these goods are in finished form need no operations and broadcast as they received. Raw Material: geo produce most of its programs in-house. Anchors, actors, reporters, music VJs and directors will be the raw material for inbound activity, and geo operations will be required to create final product. Advertisers: as sponsors are main source of income, and they broadcast their ads during a program or soap. On time receiving of these commercials required as any delay will effect operations of geo. Cricket matches: channels bit for broadcasting rights of a match. Geo own camera men are there to shoot a cricket match. In case of outsourcing, finished package of match will be received from other sport channel and geo will only broadcast in Pakistan. All these inbound activities are valuable for viewers, as cricket lovers want their favorite matches on time without any interruption, drama viewers want to see their favorite soaps on time. On time broadcasting of these shows add value to geo customers.

Operations
Operations on Finished goods: programs/shows received from suppliers in finished form need only allocation of air time. Commercials also add in these programs in operations. Operations on Raw Material: programs/shows produced by geo, are complex in operations. Geo has to manage studio, all facilities for making of programs, and management of time slots. As they acquire on studio/home for shooting and use it for various programs.

Outbound Activity
Channel card: cable operators are major source of distribution of channel programs. They buy geo card which receive frequencies from satellite and viewers watch on their TV sets International market: as geo operates in more then 50 countries, so they have contracts from local dish TV providers, or cable operators and supply of programs is also done through satellite. International news/sports channels: as journalism is interconnected worldwide, geo provide news of Pakistan to other international channels to broadcast on their network.

Marketing and sales

Hoardings and web marketing: geo is doing is marketing mainly through billboards and streamers in outdoor media. On internet, popular online video channel and google adworld are mediums for geo, on which they promote themselves. Sales: geo dont allocate sales targets to their employees, but sales department is operating in geo to facilitate cable operators and media partners worldwide.

Services
Services for advertisers: geo publish its tariff and air time rates on website with terms and conditions, which gives proper guideline to buyers. As buyers buy time and if there ads were not run due to traffic of news, so they compensate with the same potential time to buyers.

Secondary Activities
General Administration
Quality Management: as product performance and quality are KSF of industry, geo GA manage quality of their all programs effectively. This adds value to their business as quality appreciated by viewers. Legal and Govt. Affairs: for geo news legal issues are problematic, as organizations, institutes and individuals sue a channel to highlight any private issue. Govt. interference and pressure are increasing day by day and geo management is unable to counter this fact Strategic planning: geo launch Pakistans first sports channel, and all set to do the same in English news. Geo plan well for future as they send 500 employees for training which indicates they are preparing their team for challenges.

Human resource

Geo philosophy towards their Human Resource

Diverse cultural backgrounds and multi-ethnic origins add up to create a strong resource base at GEO. Each member makes a valuable contribution while overall functioning as a team. Committed to doing more for their country, GEO people remain dedicated and passionate about their work. GEO people are focused on broadening horizons and meeting new challenges. Creative and multi-talented, these fine individuals take pride in shaping the future of Pakistan

Equal opportunity employer: geo accept applications from all over Pakistan on their website, and they claim that they hire people from all provinces, races and gender. Training and development: Formal multi-disciplinary training has been given to employees of GEO staff including all producers, reporters, writers, camerapersons and editors by Intelligent Media Consultant.

Technology
Newsroom Automation Service: GEO has state-of-the-art newsroom computer system designed to meet the challenges of today's dynamic news environment. A powerful and comprehensive news production system, it can be customized for use by everyone - from small news channels with just one broadcast a day, to 24-hour, multi-channel news networks. It grasps and connects all the elements of news operations. Newsgathering, feeds, wires, scripts, rundowns, archives, contacts, video browser, on air schedules, personal work spaces, staffing and much more created and formatted to meet individual requirements. Graphic system: GEO is using is the leader in real-time digital graphics, integrated enterprise content management and distribution tools for visual communication. Its tools enable organizations to create their message once and deliver it simultaneously to different media with major economies in production and increased impact. Systems Products and solutions are used by major broadcast television networks, Internet portals, museums and universities around the world. It produce software that enables the creation and distribution of rich visual content for broadcast graphics, virtual environments and quantitative visualization and information display across networks that are delivered to different media platforms, including television, interactive television, the Internet, and Wireless Application Protocol. Automated play out system: Over time the system GEO is using, has developed cuttingedge Products including: STUDIO-D, a dubbing studio control system that controls and synchronizes VTRs with audio multi-track recorders and digital workstations This System provides an adapting operational function for any business model. This automation provides the full spectrum of TV technology and networking functionality Media server systems: Media Server System is comprised of network interfaces, discbased storage subsystems and system software. These modular components attach to the

network. They manage data storage, and handle the connection of external devices to the network. Geo technology is the backbone of their operations and distribution. Technology integrates channel primary activates with each one and they as a whole add value to company.

Procurement
Buy programs: as product performance is based to retain viewership, geo buy programs from best production houses. Buy cricket matches: a sport channel has to bit to win rights of a match. Geo specialized team buy rights with complex calculations. Relationship with suppliers: geo share good values with suppliers, and with good players they are in contract and they produce good only for geo.

P+ and P- from value chain analysis:

Threats-Opportunities-Weaknesses-Strength Matrix
STRENGTHS
S1: Efficient Management S2: IT-Infrastructure S3: Marketing Capabilities S4: Human Resource S5: Good Customer Services S6: Differentiated Products S7 : Strong Brand Identity S8: Good Performance of Geo Products S9: Coverage in 50-Countries S10: Experience in journalism S11: Financial Resources SO: STRATGIES O1, O2, S11, S3, S1, S2. As media is growing in various segments and markets. Geo can avail this opportunity due to its financial resources, marketing capabilities, efficient management and IT infrastructure. O3, O4, S4, S7, S8, S6. Geo carry strong brand mage due to its differentiated products, human resource and good performance of these factors ST: STRATGIES T1, S6, S7, S8. Geo can defend competitors through its brand image and focus on differentiated products T2, T8, S8. More then 100 channels make number of options for viewers, geo good performance can hold TRP T3, S9, S11. Viewership Pakistani channels market is covered in last decade, so channels had to cater international market for company growth. Geo had sources to counter this threat

WEAKNESSES
W1: Poor relations with Govt. bodies W2: Low Bargaining Power (Supplier, Anchors, and managers) W3: Uncontrollable Standards of third party products W4: Low Distribution Control W5: Product Portfolio

TOWS Matrix

OPPORTUNITIES
O1: Developing Market O2: Emerging Segments O3: Brand Conscious Viewership O4: Product Differentiation in Fragmented Market O5: Entry Barriers

WO: STRATGIES W5, O2. Emerging segments are shaping in industry while geo had only four channels W4, O1. Geo had low control on distributors which can create problem for geographical expansion O4, W2. As viewers identify differentiation in various products so geo had to pay high returns to suppliers O3, W3. Viewers are brand conscious and product standard variation effects channel TRP WT: STRATGIES T1, T9, W5, W2. Saturated market and new segments will hit weal point of geo. Its small portfolio and high cost for good quality products will create problem for channel growth. T2, W5. Geo product range is not sufficient to counter threat of fragmented viewership. As people are watching many channels and geo face difficulty to stick its TRP T5, W1. Political pressure is increasing as PEMRA had control over channels and cble operators, geo bad relations with Govt. will intensify this threat

THREATS
T1: Increasing Competition T2: Fragmented Viewership T3: Slow Growth of Industry T4: Exit Barriers T5: Political Pressure T6: Distributors Control T7: Human resource takeover by competitors T8: Low Switching cost of viewers and sponsors T9: Diverse competition and multiple segments in market

Max-Max strategies
Viewership in industry is brand loyal, geo strong brand image and product performance will keep and retain their current viewers. Markets and segments are increasing and an opportunity for geo as channel has strong financial resources and marketing capabilities which gives leverage to company to grow in various markets.

Max-Mini Strategies
Geo has absence in various segments of industry, potential opportunities will allow geo to overcome this weakness, and geo can compete well with strong competitors.

Mini-Max Strategies
Increased competition, fragmented viewership, and multiple segments are potential threats for geo. Product performance, product difference and strong brand image can make able to counter these threats and sustain its market share.

Mini-Mini Strategies
Geo has only four channels in its portfolio, market is fragmented in various segments and competition is diverse which make it difficult for geo to set game rules as a market leader.

Corporate Level Strategy

Jang group was Pakistan first newspaper who covers all cities and towns of Pakistan, daily Jang, The News, akhbare jahan, the daily news were different products run by Jang group. Jang was good in market due to quality of news, highlighting issues which are in grater interest of public, analytical skills of their reporters, fashion magazine, and entertainment news covered in akhbare jahan were the intangible resources which create core competency for Jang. Jang leverage its core competencies as they launch geo news in 2002. Geo news was a related diversification of jang group. They both create synergies for company as jang core competencies support geo in market.

Synergy from Related Diversification

Jang share its tangible and intangible resources for a related diversification of geo. Now both are creating synergy as one business support other business.

Jang goodwill, reputation, popularity of journalist, quality of analysis on current affairs, and reporters in all cities of Pakistan and in major countries of world, share and leverage core competencies to geo. Core competency tree is designed below for geo,

Internal Development
Rather than to avail opportunity of merger and acquisitions, Jang group are focusing on internal development. They expand their business in new markets and focus on new products to cater demands of current market. They have strategy at corporate level to make sure geo channels presence in many countries, and they launch fur channels in ten year time period.

Corporate level Strategy for Five forces:

As industry rivalry is high, jang need to diversify in unrelated businesses. As industry growth is low and multiple segments make viewership fragmented, so its a right time to invest in other ventures. Mobile journalism and internet are two main threats for firm, so it will be strategically fair to start new businesses in those industries. As it will support firm loosing business from segments where money is going. Suppliers and buyers have low power, firm had to standardize their operation through strict policies, which support company performance.

Generic Strategies
Low cost leadership
Jang is operating in print media industry which is on declining phase and rivalry is also high. To counter these problematic dynamics of industry jang is following low cost strategy for firm. They have mechanistic culture in firm and innovation is not dealt in operations, as they are also not required in competitions.

Differentiation Strategy
Geo offer different programs then rivals, as viewers are looking for new and variety of programs. Geo is focusing on differentiation strategy to compete in market. As product performance and product quality are KSF of the industry so geo creates difference through differentiated program.

Differentiation Strategy with five forces

As industry rivalry is the biggest threat, geo can encounter this threat by creating and offering differentiated products.

Business portfolio
Jang group has two business units. Jang and Geo are two units. Jang newspaper, the news, akhbare jahan, fashion magazine and the daily news are products of Jang. Geo news, entertainment, super and Aag TV are geo products.

Geo has 25% of market share and it is double then the 13% held by ARY, so geo is draw on 2X on BCG matrix. As electronic media growth is calculated through growth of television set industry which is on 14% annual growth. Opportunities and Threats for Geo From porter, pest, and strategic group analysis we draw key opportunities and threats which geo has to consider for making their five year plan from now.

Opportunities
New markets and emerging segments Brand image and product performance

Threats
Intense competition and multiple segments Substitutes of TV channels

Strategies to counter OT
Strategies for opportunities
Pakistani channels are growing in various markets; geo strong brand image and their product performance are critical factors which generate success for them worldwide. Global strategy need to be adopted by geo. Geo entertainment is key product for geo as Pakistani soaps, dramas and comedy shows are creating their demand in global markets.

Strategies for Threats

Threat coming from multiple segments such as cooking and Islamic channel can be addressed through acquisition strategy. Geo can buy key players of a segment, for example Masala TV or Health TV as they have good share in their related segment. Viewers are using internet, social media, mobiles and radio which had negative impact on TRP of a tv channel. Geo need to make its presence in industries which are affecting business of geo TV.