The coming together of arch rivals Subhash Chandra’s Zee entertainment and Rupert Murdoch’s STAR India to create a distribution company will have lasting impact on the TV distribution landscape. The joint venture called Media Pro Enterprises, (Media Pro, a 50:50 joint venture between STAR DEN Media Services and Zee Turner) will distribute 68 channels, including both firms flagship channels and plus the regional channels.
This is very interesting move from media and television industry perspective. Another example of such collaboration is ESPN STAR SPORTS, a joint venture in south Asia; between ESPN and STAR Sports, who compete in all other geographies. For any media company, content generation is most important thing and which takes a lot of attention. Media companies need to have their act together in content creation. Distribution is important arm, but it can be collaborated.
Similar consolidation happened in telecom industry, where the tower and infrastructure was handled through collaboration among different companies, who compete in the general market. A JV was formed to handle all the tower business. It makes lot of sense for the companies which will help to improve the margins and thus gives lot of competitive advantages when comes to the pricing model.
Such kind of collaboration is common in services industries as well. Infosys and Wipro, who compete in outside market in almost all the accounts, do collaborate when comes to certain technologies or certain customers. It is important to have a clear line of division between two companies when comes to such kind of collaboration.
What is important here is the customer or consumer. This is very healthy sign and trend that in order to serve customers, companies are coming together and forming Joint Ventures. This helps to improve margins and the quality of services will also improve (The media distribution for example, will help in digitizing the content across both the companies, and this makes the HD content possible) the service quality.
In order to improve the margins, such business models are being generated, which would eventually redefine how the business is operated.
For me, customer gets benefited and being consumer of such services/products I am happy by end of the day.
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There is something comes to my mind that the era of SAAS BAHU. has come to an end. These big players are getting tough competition from Regional channels. Probably the content created are less influential to mid and small city(Major population of India still lives in villages and towns), which for now is on target for all business. Spending behaviour is changing in villages. The one who can influence the spending mass will have the cake.
In future we may see something similar in Ad world.
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