Sie sind auf Seite 1von 6

Name: Chandan Nayak

MBAe, AIM

1. Elaborate on the history of the success of Cartoon Network. How has Cartoon
Network been able to run successfully in the Indian Television Market for so long?
Discuss the strategy used by Cartoon Network to capture the Indian Market.
The case describes the growth and evolution of Cartoon Network. Cartoon Network was first
launched in the US in October 1992 offering animation programs from Warner Bros, MGM
and Hanna-Barbera cartoons targeting on children’s segment. Over the years, the channel
spread across Europe, Latin America and Asia pacific regions. With famous cartoons in its
library and some successful original shows such as Mike, Lu & Og, Ed, Edd n Eddy, etc.
Cartoon Network became one of the leading children’s entertainment channels during 1990s.
By 1998, Cartoon Network launched its website and soon became one of the world’s top ten
websites in terms of time spent on site during 1998. In February 2001, it was reported that the
channel had a subscriber base of over 75 million in 145 countries.
Cartoon Network entered India in October 1995. Initially, it only had showtime in morning
slots (9am to 5pm). In its beginning phase, there were no viewership for cartoon network when
it started in India. Despite being a global name, it had to start building its audience base from
zero level. However, since there were not any significant players in this industry category,
Cartoon Network easily became the households names in the country within short period of
time. There were many challenges for Cartoon Network in India. Intense competition from
Kermit and Nickelodeon and the local channels such as Star, Zee and SAB TV networks which
also started airing cartoons gave a tough time. But, with proactive strategies from Cartoon
Network and its unique ahead of time activities always kept it at top in the industry. One of the
main strategies that helped Cartoon Network gain access to common households in India was
its ‘Localization’ strategy. The unique marketing of Cartoon Network was also one of the
reasons that helped it to successfully run in the Indian Television market for so long.
With localization strategy, it dubbed its most popular cartoons in Hindi language and localized
the content to appeal to the Hindi-speaking audiences. By 2000, Cartoon Network was offering
nine hours of Hindi versions of various popular cartoons. It further reached Tamil people by
bringing Tamil-dubbed cartoons and further deepened its roots in Indian industry. As a result,
it reached 10 million homes in India, appealing to children between 4 and 14 years.
The unique and innovative promotional activities of Cartoon Network always helped it to
maintain its status in market over other competitors. In May 2000, it introduced ‘Super-Size
Cinema’ that premiered new cartoon shows and involved children in various games. It offered
many other programs and contests that involved kids. Other popular promotional activities
included its cricket tournament involving parents and kids, Dream Diwali, Cartoon network
sound machine, Toon Hunt for Scooby Doo, Save Dexter’s brain, etc. With the help of these
promotional activities, it regularly reinforced engagement with its target group and kept the
charm of cartoons characters and cartoon network alive. Cartoon Network also created a
separate website cartoonnetworkindia.com for its Indian customer base and allowed children
to engage with its cartoon characters, offered games, etc. It also brought cartoons to attract
teenagers and adults and succeeded in gaining that customer base too. In this way, by mid-
2002, it became the second most successful channel in terms of audience share.
Concluding, the four factors in its strategy, which played important roles for Cartoon Network
to capture Indian market were 1) its idea of localizing its shows, 2) innovative promotional
activities, 3) it’s focus on leveraging latest technologies and 4) The content that Cartoon
Network produced and acquired.

2. Despite the attractive strategy used by Cartoon Network in the Indian Market, most of
the people have criticized the approaches used by Cartoon Network. What were the
reasons for such criticism? Do you agree with such criticism? Express your view.

Cartoon Network was criticized by some analysts and section of the audience for its Hindi and
Tamil version. Some of the reasons that are highlighted in the case are its lack of original
English version flavor in its dubbed versions. People did not find most of the popular dubbed
shows as entertaining as their original versions. Many parents wanted their children to learn
some English words and phrases through the medium of cartoons and part of the reason was
English language for which they preferred Cartoon Network for their children’s entertainment.
Another major reasons for the criticism was inappropriate use of Hindi language in Hindi
versions which taught children Hindi language wrongly. One of the major concerns occurred
due to its lack of ability to balance contents for adults and children. For a children
entertainment segment, Cartoon Network was offering more violence, horror and adventure-
based programs to cater its teenage and adults’ segment of audience. It was also criticized for
exploiting the pester power of children by airing advertisements that targeted children.
To see whether the criticisms were fair or not, we will use a PESTEL tool and generate insights
to justify the points.

PESTEL analysis for cartoon industry in India for 2001

Political
• The political situation in India can be characterized as stable. It has a federal republic
Democracy, which comprises political stability with effective governmental policies.
• Proper laws and regulations and government policies.
• The government is welcoming for foreign channels’ companies and has favorable FDI
law for satellite TV and cable segments.

Economic
• India in 2001 was top 5 fastest growing economy.
• Increasing per capita consumption.
• Spending power of people was steadily increasing and it was observed that between
1995 and 2002, nearly 100 million people became part of consuming and very rich
class people. On an average 30-40 million people were joining middle class every year
representing huge consumption spending in terms of demands for mobile phones,
television, etc.
• Spending in advertisement witnessed enormous growth after 1995 and it could be top
10 largest market in ads in 15 years’ time.

Socio-cultural
• 35.3 % of population was in age group of 0-14 years in India according to census of
2001.
• 41% of population accounted for less than 18 years of age in India according to census
of 2001.
• Children entertainment choice was heavily decided by parents in early years.
• 31.6% of households in India had television in 2001.
• Only 12.5% Indians in 2001 spoke English, while 53.6% of Indian population spoke
Hindi.
• India is a multi-ethnic, multi-lingual, and multi-religious country.
• The country has a growing middle class with good disposable income.

Technological
• Television is major platform for entertainment source of households in India in 2001.
• Growing internet users in India. 0.5% of population in 1995, 0.7% in 2001, 1.5% in
2002.
• Improved channel distribution mechanism.
• Being a large market, it is sure that all sorts of technological products in world would
easily reach in Indian market.
• The entertainment industry is dependent upon technology to reach the large audience.

Environmental
• India's growing population is causing India's environmental degradation.
• Major issues include environmental degradation, pollution, water scarcity, solid waste
pollution.
• India is one of the largest consumers of electricity and other sources.

Legal
• Copyright act
• Television Broadcasting regulation
• Telecom regulatory authority of India Act
• Trade marks act
• Information technology law.
• Self-regulation of content
• Cable TV Networks (Regulation) Act
• FDI law for satellite TV and cable segments.
As per our PESTEL analysis, we can see that Only 12.5% Indians in 2001 spoke English, while
53.6% of Indian population spoke Hindi. One of the major criticisms that Cartoon Network faced
was that its Hindi version were not as entertaining as its original version. If we observe the facts,
above criticism could be partly true but most of the consumer watching the Hindi segment should
be new to Cartoon Networks and its shows. So, with localized content, we can assume that it
reached new set of audience who were less likely to be aware of original cartoon.
Children’s entertainment and content choice was heavily dependent upon parents. Seeing the socio
cultural and economic factors where we see most of the people who could afford technology and
entertainment, most of the parents belong to progressive thoughts in terms of education and it is
natural for them to want their children to learn English. English is superior language in 2001 and
was a matter of status in 2001 as many people did not spoke this language fluently. So, part of the
reason, why most of the children were turn to channels like Cartoon Networks could be because
they wanted their children to engage in content which will be helpful in learning along with
entertainment.
The criticism for inappropriate use of Hindi language in dubbed version should be strongly
accepted by Cartoon Networks as per my view as there were no real industry standard set for the
quality of Hindi dubbed children’s TV content. The population of India shows huge market for
children, teenagers and adults’ segments separately. It was obvious that Cartoon Network would
lose balance, if it tried to cater programs of all these segments in single channel. It surely effects
children’s segment while trying to create content for teenager and adult’s segment.
It was also criticized for exploiting the pester power of children by airing advertisements that
targeted children. Well, I do not completely agree on this criticism. Cartoon Network had audience
bases from 4 to 18 years of age. The advertisement was displayed based on the type of shows and
since, the content was highly distributed over the time periods such as morning and night shifts,
there was lesser chance for one set of children segment to encounter ads which could actually be
termed as exploiting their pester power. However, in the absence of proper monitoring and legal
laws for displaying advertisement, we cannot blame Cartoon Network for the type of ads it
displayed. The government or entertainment and advertising law is to be blamed.

3. Considering the growing number of competitors such as Nickelodeon, Disney Channels,


Nicktoons, how do you think should Cartoon Network cope with its competitions. Provide
recommendations to Cartoon Network on the competitive strategies to be used in order
to sustain its leadership position.
To discuss about the competitions, we will use Porter 5 force analysis and conduct internal
assessment of SWOT to recommend strategies.
Porter 5 forces Analysis

1. Threat of new entrants


Cartoon Network needs to consider potential new entrants and their possible effects on its
business. Considering new entrants in Indian market, there are many large companies
globally as well as locally which can easily start their service in children segment of India.
This component of Porter 5 forces analysis shows that India being economies of scale
attract many top players. Due to low switching costs in this industry, it is easy for audiences
to move to Nickelodeon, Disney Channels, etc. However, established brand identity and
high capital requirement weakens the intensity of this force. But still it is very easy for new
entrants established globally or locally to enter this segment and capture the market and
quality of programs that of Cartoon Network.

2. Threat of substitutes
The substitute products for cartoon industry in 2001 could be videogames, internet, toys,
outdoor games but in terms Cartoon Network reach and variety of programs, games already
offering in the industry, the possible substitutes do not show significant revenue impact on
its business. The availability of substitutes was nominal in 2001. One of the substitutes that
could harm is Internet but switching costs to other means of entertainment could be quite
expensive over TV shows.

3. Bargaining power of suppliers


Most of the supply of programs and shows of Cartoon Network were built in-house or
directly/indirectly owned. Threat of forward and backward integration is also low. Also,
the channel uses global population with too many suppliers in the industry. So, bargaining
power of suppliers is a weak indicator which will not affect highly. However, due to the
other big players, it could face competitions in acquiring big shows and suppliers of big
shows which is directly acquired by Cartoon Network can have upper hand in their
bargaining power.

4. Bargaining power of buyers


Customer can easily switch from Cartoon Network to other competing firms due to low
switching costs. But firm’s concentration is dominating over buyer concentration. Only
few big players are serving the big buyer volume. The price sensitivity is moderately
affected, as people will not be willing to pay more for their service.

5. Competitive rivalry
The competitive rivalry is very high in this industry. There is high aggressiveness among
firms over marketing strategies. The competitor’s differentiation is easily countered by
other. The product differences weaken this force of porter.
SWOT Analysis
Strength:
• The company is most popular cartoon channel brand globally as well as in Indian market.
• It offers wide range of shows, and conducts successful events regularly which is accepted
by children as well as parents.
• It already has legendary character loved, recognized and cherished by children, adults and
parents and they are all in-house creations.
• Good hold in alternate areas such as websites and games.
• Use of latest technologies.
Weaknesses
• Highly priced over local channels as there are free-to-air channels in industry.
• The audience loses interest of popular shows over few seasons.
• Quality of its Hindi content.
Opportunities
• Creating regional characters in cartoons.
• Further diversifying into new line of its segments such as toys, video games, etc.
• Promoting websites.
Threat
• Its own online media.
• Serving two segments – Children and teenagers/adults.
• Other channels.
Competition and threat of new entrants are the most significant forces determined by Porter’s five
forces analysis for Cartoon Network. Given, that competition and threat of new entrants are the
most significant concerns determined in this analysis, it is recommended that Cartoon Network
focus on developing competitive advantages to further strengthen its brand. It should focus on
further penetrating markets especially developing new regional markets with its localization
strategy with improved quality dubbed contents. It should continue its promotional activities where
Cartoon Network are able to engage parents as well as children. It should continue to evolve in
terms of leveraging latest technologies and keep diversifying its products to prevent its audience
from switching to other competitors. Despite having 30 to 40% users from teenagers and adults’
segment, it should not forget the channel’s core segment is children. Therefore, the channel should
be careful and balance the violence, horror and adventure in its shows.