Are you a 2nd-year student preparing for final placements?
We’ve got something special for you. In association with Aditya Birla Group, InsideIIM brings you this unique new series called “Learning #IRL.” Get your monthly fix of sector-wise knowledge transfer, solve quizzes and case studies and find out what certain terms mean!
What’s This Series About?
In this series, we bring you 4 fun things every month.
- Quiz: Solve a quiz based on concepts you will learn at b - school in marketing, HR, finance and operations. Test your conceptual clarity and know how!
- Case Study: Solve a sector-wise case study every month! Don’t all interview prep experts tell you to sharpen your logical thinking and practise cases?! Well now, you can practise a case every month and find out how well you know various concepts!
- Video: Check out this unique explainer video laying out the facts and figures for you. Whether it’s the 7 Ps of marketing or the Jidoka model in supply chain and operations, these videos tell you all. Have a specific concept you wish to understand? Let us know and we’ll help you comprehend it!
- Comic Strip: Reading reams of pages can be so boring. Now read comic strips and find out what’s what in your b - school curriculum! Wondering about Time Value of Money? Or perhaps HR strategies and tools? These comic strips will help you understand the same old concepts in new and refreshing ways.
Who This Is For?
If you want to:
- Check your comprehension
- Learn new concepts
- Brush up on your concepts
- Just test yourself
The Learning #IRL series is for you.
Fun Fact About ABG, who sponsored this content:
Did you know that the Aditya Birla Group is a US $44.3 billion corporation in the League of Fortune 500? Anchored by an extraordinary force of over 120,000 employees belonging to 42 nationalities, the Group is built on a strong foundation of stakeholder value creation. With over seven decades of responsible business practices, the businesses have grown into global powerhouses in a wide range of sectors – metals, textiles, carbon black, telecom and cement. Today, over 50% of Group revenues flow from overseas operations that span 34 countries in North and South America, Africa and Asia.
And now let’s start with the month’s case study!
How to solve this?
Read the case. Answer the questions noted below in the comments section.
THE CASE - INTRODUCTION
It’s called the Happiest Place on Earth.
Disney has been the foremost name in the media business for several decades now. What started as just a bunch of cute cartoon figures who lit up the middle-class American screens every evening, has transformed into a media behemoth which after the recent acquisition of Hollywood biggie 20th Century Fox is now also the Most-Watched Place on Earth.
Disney owns a variety of properties in the following broad areas of business:
|Media networks - Sky Sports, ESPN, Disney Channel, ABC, Freeform, Bamtech, Hulu, Disney+
|Parks and resorts - Disneyland, Disney World, etc built all over the world
|Studio entertainment - Marvel, Disney, Pixar, Lucasfilm (Star Wars franchise), 20th Century Fox
|Consumer products and interactive entertainment - Merchandise, Online Games
For the purpose of this case, we are going to focus on the first area of business. Media Networks.
Today, the consumption of TV is moving online. New Over The Top (OTT) platforms are springing up every month and conversations on social media are peppered with conversations around the favourite web series and films. From Netflix to Amazon Prime Video, everyone is jumping onto the OTT bandwagon to woo audiences. And now the party has well and truly arrived at the Indian shores.
India’s OTT Scenario
With 4G becoming cheaper than a movie ticket, access to fast broadband internet has become a given in most parts and most consumer classes in the country. With the improvement in internet speeds has come the demand for more and more video to be consumed. India has spawned youtube stars, web entertainment startup successes and content production houses specialising in series for the web.
First things first. Over the top (OTT) is a term used to refer to content providers that distribute streaming media as a standalone product directly to viewers over the Internet, bypassing telecommunications, multichannel television, and broadcast television platforms that traditionally act as a controller or distributor of such content.
The Indian OTT market today has more than 30 different players. Among them, they have a variety of revenue models - from freemium to advertiser-funded to pure subscription. The biggest currency remains, as it does for any online player today, the monthly active users (MAUs). Here’s how the $0.5 billion Indian market is split up among the many players today (by MAUs).
The users are accessing the OTT platforms primarily through their smartphones. As affluence and penetration increases, the Indian OTT market is expected to hit $5bn in revenues by 2023. This kind of growth is very attractive for businesses to come in. While the user base has plateaued in the developed world, markets like India provide a huge expanse of possibilities for companies like Amazon, Netflix and now, Disney.
Disney’s OTT Plans
What makes Disney such a formidable challenger in the OTT markets all over the world is because of the properties it owns the rights to. Any platform is only as powerful as the kind of exclusive content it can offer to its users. The first time you downloaded a Hotstar app was when Game of Thrones was released on it and the first time you downloaded Netflix was when Stranger Things was streaming. And the Disney of today is far more than just Mickey Mouse and Donald Duck.
Between Marvel, Pixar, ESPN, 20th Century Fox films, the Star® Wars franchise, Fox TV channels, Star Sports channels, Sky sports channels and a lot more, Disney has perhaps the most diverse bouquet of globally recognisable content properties anywhere in the world.
With the merchandise in place, Disney now plans to launch its shop which will stock all this merchandise.
But wait, Disney does own a couple of pretty important OTT platforms already.
ESPN+ is the destination for all kinds of sports programming online in the USA. Live sports is the most profitable business area for Disney. ESPN alone accounts for more than 22% of Disney’s overall revenues.
Hulu is an international success as an OTT platform with a variety of differentiated, high impact web series and other content.
Closer home, it now also owns Hotstar - the biggest player in India by MAUs. Again live sport, especially cricket, proving to be its major driver. The last IPL final was streamed to 10.3 million viewers concurrently on the platform!
Disney now plans to launch a comprehensive new OTT platform across its markets - tentatively called Disney+. All the Marvel, Pixar and Star Wars shows, films, etc currently being streamed on Netflix, Amazon, etc are not going to see their licenses renewed as they will now be hosted on the new platform,
Over the next 5 years, the 3 top players - Netflix, Amazon and Disney are each planning to pump in upwards of $10 billion on creating new content globally.
Disney’s India Entry
With the above as context, Disney is planning to enter India, all guns blazing, by the end of 2019, But there are questions that still need answering as far its entry strategy is concerned.
One school of thought is that it should just beef up the Hotstar offering as it is a very strong brand already with a great presence in India. It shortens the brand building and consumer acquisition drastically for the parent company.
Another is for it to enter with the Hulu brand, already popular in several markets as the ultimate destination for premium, differentiated content - a worthy challenger to Netflix - the one brand which globally makes the most revenue from the OTT business and commands a high premium in subscriptions compared to any other player in any other market.
A third option is to consolidate everything under the international Disney+ umbrella - bringing premium content, Marvel superheroes, Pixar characters, live cricket and football and everything else under the mother brand and then charging a Netflix-ish premium for the subscriptions.
There is also a line of thought that maybe a market the size of India requires its own dedicated brand and presence.
There are others who feel that maybe live sports is the entry point to India. Like the USA, live sports is big in India. Sony Liv is an otherwise unremarkable platform that has made major inroads by being big on live sports.
There is another group in the company that thinks that all family-oriented, mass content should reside on Disney+, the more adult, evolved content on Hulu, live sports on ESPN+ and India-specific regional content on Hotstar. And they can then be offered as a packaged subscription.
Your Mission, Should You Choose To Accept -
Tell us your thoughts on the following Operations specific challenges of their India launch...
- What do you think is the scope of operations management in this case?
Keeping business goals in mind, which of the different operations processes will be applicable in this case in terms of producing and distributing content?
- A shop floor layout or process layout - which one is more applicable in this case?
- Made to stock vs. made to order- what inventory model do you think is applicable in this case and why?
- Can you think of a bottleneck in this scenario? Also, share how you would remove the bottleneck
- Do you know of the marketplace/ inventory and a hybrid model of e-commerce? Which model do you think is applicable in this case of production and distribution of content? And why?
- What are the main activities involved in logistics management in such a scenario?
- How can the hub and spoke model be used in this scenario?
- Should Disney opt for 3PL? Explain how 3PL would be applicable in this case?
- How will this supply chain differ from a normal supply chain?
- What do you think will be some of the challenges you’ll face setting up operations and how will you overcome them?
Post your answers on this thread!