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DTW
During the Week, Reliance Industries drove a hard bargain and created a mega-deal in the entertainment space. According to a report in CNBC, “deal that values The Walt Disney Company’s India business at around $3 billion against earlier estimates of up to $15 billion.” This would lead to a ₹70,000 crore, Reliance-controlled joint venture (JV) that combines the media businesses of Viacom 18 and Star India.
The proposed merger of Walt Disney's Indian media business with Reliance Industries' Viacom18 is poised to reshape the Indian media and entertainment landscape. The amalgamation, set to be finalized by the first quarter of 2025 pending CCI approval, will create a formidable entity worth Rs 70,000 crore. With over 70 Star India channels, 38 Viacom18 TV channels, and dominant OTT platforms like Jio Cinema and Hotstar, the merged entity's influence will extend across multiple languages and mediums. Insights from industry experts suggest potential shifts in subscriber tariffs and advertisers' bargaining power, indicating a changing dynamic in the market. With a focus on dominating key markets and boasting coveted sporting spectacles like the IPL and World Cup, the merged entity emerges as a formidable force across the media, entertainment, and sports ecosystem.
We could use the SHOWTIME framework to understand the impact of digital platforms on entertainment industry:
Streamlined Content Delivery: Digital platforms like Netflix and Amazon Prime Video have revolutionized entertainment by offering streamlined content delivery, allowing users to access a vast library of movies, TV shows, and original content on-demand. Hotstar (now Disney+ Hotstar) provides a wide range of content, including Bollywood movies, regional films, and live sports, all accessible through a single platform. Of course, Netflix pioneered the model which offers a vast library of movies, TV shows, and documentaries, allowing users to stream content anytime, anywhere, without commercials.
Higher Reach and Accessibility: Digital platforms have expanded the reach of entertainment content, making it accessible to audiences worldwide. Platforms like YouTube and Spotify enable creators to share their content with global audiences, democratizing entertainment. YouTube has provided a platform for Indian creators to showcase their talent and reach a global audience, leading to the rise of popular channels like T-Series and CarryMinati. Across the world, Spotify has revolutionized the music industry by making millions of songs available to users worldwide, regardless of their location, through its streaming service
Opportunities for Diverse Content: Digital platforms provide opportunities for diverse content creators to showcase their work. For example, platforms like Disney+ Hotstar in India offer a wide range of regional and niche content, catering to diverse audience preferences. Amazon Prime Video produces and streams a wide range of original Indian content, including Hindi web series like "Mirzapur" and "The Family Man," catering to diverse audience preferences
Wider Audience Engagement: Digital platforms facilitate greater audience engagement through interactive features like comments, likes, and shares, allowing users to participate in discussions and share their opinions with others. Instagram and Twitter are popular platforms for Indian celebrities and influencers to engage with their fans, share behind-the-scenes glimpses of their lives, and promote their projects. The OG of short form video, TikTok has revolutionized short-form video content, with users worldwide creating and sharing engaging videos on various topics, from comedy sketches to dance challenges.
The adverse impact of digital platforms on the entertainment industry could be understood through-
Threat to Traditional Media: The rise of digital platforms poses a threat to traditional media outlets such as TV networks and newspapers, leading to declining viewership and ad revenue. The rise of digital streaming platforms like Netflix and Amazon Prime Video has led to a decline in viewership of traditional TV channels and a shift in advertising revenue. World wide newspapers and magazines have faced declining readership and ad revenue as more consumers turn to digital news platforms and social media for their information.
Impact on Content Quality: The proliferation of digital platforms has led to concerns about the quality of content, with some platforms prioritizing quantity over quality and relying on sensationalism to attract viewers. Some Indian web series have been criticized for relying on sensationalism and explicit content to attract viewers, raising concerns about the quality and integrity of storytelling. Over last few years, YouTube has been criticized for promoting clickbait and sensationalist content, leading to concerns about the platform's impact on societal norms and values
Monopolistic Practices: Large digital platforms like Facebook and Google have been criticized for their monopolistic practices, which stifle competition and limit consumer choice. In case of Jio and Disney, the monopoly in sports properties, particularly cricket, could drive higher ad revenues, consolidating the merged entity's stronghold. However, concerns arise regarding market competition, CCI approval complexities, and potential channel divestments or shutdowns, echoing past merger experiences. As the merged entity gears to maximize market share through increased investments in content and synergies, challenges loom for individual broadcasters to compete and grow.
Erosion of Privacy: Digital platforms often collect vast amounts of user data for targeted advertising, raising concerns about privacy and data security among users and regulators. By considering both the positive and negative impacts of digital platforms in entertainment, stakeholders can work towards maximizing the benefits while addressing the challenges for a more balanced and sustainable ecosystem. The Indian government has raised concerns about data privacy and security on social media platforms like Facebook and Twitter, leading to calls for stricter regulations and oversight. For example, the Cambridge Analytica scandal exposed Facebook's mishandling of user data and raised questions about the privacy practices of tech giants, sparking calls for greater transparency and accountability.
OTW
Over the Weekend, Aru traveled to Colombo for participating in Youth Forum Leadership Summit 2024 organised by US State Department.
I also used the opportunity to catch up with friends and family in Delhi NCR.
It is such a great feeling to catch up with old friends. See you around
I Love You
Shailendra
PS- Visiting Dehradun till 7th March 2024 and would love to catch up.
1. I would like to highlight my views on Reliance-Disney Deal's Future Prospects
-> deal could lead the entity to a dominant presence across TV and OTT Platforms...But it might shape in monopolistic concerns.
-> Both the platforms have huge audience base which might enhance competitiveness in OTT platforms.
2. I liked how meticulously both the sides of the coin has been explained via SHOWTIME Framework i.e, favorable and adverse impact of digital platforms on entertainment industries.
What one can deal with is "Optimizing Individuals Content Consumption Habit".......We are leveraged with various OTT platforms and other entertainment channels and one must access content conviniently, discovvering new perspectives and experiences.
This article helps us to understand Reliance Industries' significant deal with The Walt Disney Company's India business, valued at $3 billion, reshaping the Indian media landscape. The merger with Viacom18 is expected to create a Rs 70,000 crore entity, dominating TV channels, OTT platforms, and sports broadcasting. The SHOWTIME framework examines digital platforms' impact, highlighting streamlined content delivery, wider accessibility, diverse content opportunities, and audience engagement. It also addresses threats to traditional media, content quality concerns, monopolistic practices, and privacy erosion. With the help of this article we can understand the transformative influence of digital platforms and strategic mergers in the entertainment industry.