Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Balaji Telefilms: SWOT analysis - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Sep 24, 2007

    Balaji Telefilms: SWOT analysis

    In the previous article we had analyzed the company by applying the Michael Porter's model. In this article we shall analyze the company by doing a SWOT analysis.


    • Strong creative team: The company's serials accounted for 79% of the aggregate TRP of the weekday prime time shows featuring in the top 100 Hindi cable and satellite shows. Being the leader in the Hindi mass entertainment space, accounting for more than 40 of the top 100 programmes, some of its popular serials have been on air for years now but still dominate the TRP ratings. Balaji has also been very successful in regional programming.

    • Low overheads: Balaji's budgeting discipline is responsible for a strict control of costs. The budgeting discipline has the following priorities. Each programme is appraised as a profit center and costs are compared with the budgeted target across every episode, artiste, location, and people expenses. Secondly, project life cycle management comprises of a holistic perspective of shooting schedules, scene wise artiste requirements, ongoing shooting progress and final product delivery before shooting commences. Further, Balaji has invested in captive sets, wherein the company has in house sets, which helps in saving the hiring cost, and enhances production quality. Also, the company has reduced its dependence on vendor equipment by investing in sophisticated lights; sound recording equipment resulting in substantial cost savings. Balaji has two state of the art post production suites, which accelerates the conversion of recorded material into episodes and enhances the flexibility to review the produced content with the objective of revision and improvement.


    • Over dependence on key personnel: Ekta Kapoor is the creative director of Balaji and is chiefly responsible for the company's success. Although Balaji has a proper structured creative team in place, it still heavily depends on Ekta Kapoor. Balaji Telefilms evinces a lot of interest from aspiring actors who are eager to work with it. Initially the company doesn't have to pay high fees to these aspiring stars. However if any of their actors becomes very popular then high fees have to be paid to them. Besides this the popularity of the serial hinges on the performance of these key actors to some extent and their exit can hurt the TRP's of the show.

    • Difficult to sustain success: Balaji's programmes accounted for 79% of the aggregate TRP of the weekday prime time shows featuring in the top 100 Hindi cable and satellite shows. The tastes of the viewers are fickle and it will be very difficult for Balaji to sustain these high TRP's leave alone improving them. Thus Balaji's impressive track record may prove to be its bane in the future.

    • Lack of scalability: Production of entertainment software is not a very scalable business. The channels that Balaji services are limited in number. Besides, talented directors, technicians, artistes required for expanding operations are not easily available. Most of the other production houses produce only one or two serials at a time finding it very difficult to scale up their level of operations.


    • Growth opportunities: The penetration of television sets and cable TV is very low in India. It is expected to increase due to the rise in incomes and a decline in the prices of television. Digitalization (CAS and DTH services) will increase cable penetration from 70 m homes in 2006 to around 113 m homes by 2011. The Indian television industry had a market size of US$ 3.24 bn in 2005 and is expected to reach US$ 9.34 bn by 2010, a CAGR of 24%. Advertisement spending in India is directly linked to the growth in GDP. In view of the country's projected GDP growth, the country's TV advertising market is expected to grow from Rs 66 bn in 2006 to Rs 123 bn by 2011. (Source: Balaji Annual report FY 07) All these developments will increase the broadcasters ability to spend on content, which augurs well for content providers like Balaji.

    • Entry of new players in the Hindi General entertainment space: The Hindi general entertainment space will get more competitive with the entry of NDTV, UTV, INX Media. The broadcasters would try to maintain or increase their market share by improving their quality of content. Thus the broadcasters expenditure on content would increase. INX media has requisitioned Balaji to produce a couple of shows for it. Balaji's programming hours would increase as well as its realisations per hour should also continue to increase in the future.


    • Plummeting share of mass entertainment: Balaji has produced many successful serials in the mass entertainment genre. However, it has not been very successful in other programme genres such as comedy shows, reality shows, music contests that are getting increasingly popular and are telecast on prime time. In fact, the share of mass entertainment channels in terms of viewership and revenues is reducing (as seen from the table below). If this trend amplifies in the future, then it can adversely affect the profits of Balaji.

    Share of Indian TV viewership and advertising revenues
    (%) 2001 2003 2005
    Channnel genre Viewership Revenues Viewership Revenues Viewership Revenues
    Mass entertainment 54 59 36 47 38 41
    Regional language 35 15 40 18 37 25
    News channels 1 10 3 10 7 12
    Hindi film channels 3 5 4 5 8 6
    English Entertainment 2 4 2 4 2 4
    Sports 2 3 10 13 5 7
    Infotainmnet/Kids 2 2 3 2 2 3
    Music channels 1 2 2 1 1 2
    Total 100 100 100 100 100 100
    Source: TAM and ADEX
    • Competition from other production houses: Balaji is facing increased competition form other production houses such as Creative Eye Limited, UTV Software Communications Limited, Maverick Productions, White Leaf Productions. All these production houses are competing for the same prime time slots on limited number of popular Hindi channels.



    Equitymaster requests your view! Post a comment on "Balaji Telefilms: SWOT analysis". Click here!

    1 Responses to "Balaji Telefilms: SWOT analysis"

    Ajay Kumar

    Feb 8, 2013

    Thank you for the information. I am very happy by the analysis because it came to my use as an assignment. please keep on doing. Thanking you

    Equitymaster requests your view! Post a comment on "Balaji Telefilms: SWOT analysis". Click here!

    More Views on News

    Zee Ent: GST Short term Negative but Long term Positive (Quarterly Results Update - Detailed)

    Aug 14, 2017

    The management believes that GST will aid the advertising spends in the long-run.

    S Chand and Company Ltd. (IPO)

    Apr 26, 2017

    Should you subscribe to the IPO of S Chand and Company Limited?

    GTPL Hathway Ltd. (IPO)

    Jun 21, 2017

    Should one subscribe to the IPO of GTPL Hathway Ltd?

    Zee Ent: Advertising drives revenues (Quarterly Results Update - Detailed)

    Aug 1, 2016

    Zee Entertainment has announced its results for the first quarter of the financial year 2016-17 (1QFY17). The company has reported 18.5% YoY growth in sales and a 13.7% YoY growth in profit after tax.

    Zee Ent: Taxes, lower other income mar bottomline (Quarterly Results Update - Detailed)

    Feb 3, 2016

    Zee Entertainment has announced the third quarter results of financial year 2015-2016 (3QFY16). While the topline grew by 17% YoY, bottomline fell 11% YoY during the quarter.

    More Views on News

    Most Popular

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    The Most Profitable Investment in the History of the World(Vivek Kaul's Diary)

    Aug 8, 2017

    'Yes, it looks like a bubble. And, yes, it's like buying a lottery ticket. But there's something happening that has never happened before. It's an evolutionary leap in money itself.'

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    Bitcoin Continues Stellar Rise(Chart Of The Day)

    Aug 10, 2017

    Bitcoin hits an all-time high, is there more upside left?

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 (Close)