Retail television channel - business plan

Abstract

The Indian television industry has been expanding at a rapid pace, reaching out to 11.2 million consumer households. Television has become an attractive medium for consumer end businesses to reach out to large number of viewers. Retail industry in India has already been capitalizing on this opportunity with Television based Home shopping growing at a rate of 26.8 %. Since the retail space has become a constraint for expansion of large format retailers, alternative mediums to reach out and sell to customers have become attractive. Television, with its penetration level higher than the internet has become a plausible option for retailers to approach consumers. Infomercials have been the widely used by retailers to sell products on television. In the regional market of Tamilnadu, infomercials that are viewed by television users have a total airtime of 3957 hours an year including a large number of infomercials by local businesses. Retailers and other businesses telecast their infomercials in entertainment channels that do not provide prime time slots and charge higher rates for infomercials. Hence a television channel that caters to the requirement of retailers and other businesses to reach to consumers and also fulfill the informational needs of consumers would be a viable proposition for a new business venture. The proposed business channel airs infomercials of television shopping businesses and produces in-house shows for large retailers. In-house production of infomercial shows are based on a viewer driven infomercial model that allows consumers to choose the product category on which the information is required. In addition to retailers, service businesses that need to reach out to large number of consumers can benefit out of infomercials. The revenues of the proposed channel primarily arise out of airtime charges and pay channel subscription fees. Financial plan of the proposed channel has been developed with estimates from the industry on the investment, expenses and income involved in launch and operation of television channel. A regional channel with a preferable viewership and large number of infomercials in its programme schedule has been used as the basis to arrive at a financial plan of the business channel. The business venture is financially profitable and has the potential to leverage on opportunities available in the retail and television industries.