Thursday, May 11, 2006

Doing Business in the East - The West Way

There is something unique about how some businesses are run in the west

Wireless phone service providers give phones free or at highly discounted rates. Sometimes they even give you money back when you buy one of their phones.
The catch is, you will have to sign a contract for 1 or 2 years with the service providers. That's where they make most of their money.

Car dealers, give great discounts when you buy a new car from them. Dealers don't make much money when they sell the car. But when something is wrong with the car, and when you take it to the dealer, they charge you heavily. That's how they make most of their money.

This is how business is usually done in the West.

Tamilnadu Assembly Elections 2006

DMK has promised a free color TV to every household, if they win the elections.

Now, the question of whether they will stick to the promise, now that they have won the election, will have to be seen.
Honestly, I don't think so. I believe that in urban areas, many families may get free color TV, with great media attention. But in rural areas, probably a whole village may get 1 or 2 free color TVs.

Why would DMK want to give a free color TV, say mainly to people in urban areas?

I belive the reason is two fold.

First, to get people's attention and win the election, which by the way seem to have worked.A classic example of textbook execution.

But the second reason, which I think is true, is truly an interesting and amazing plan.

Sumangali Cable Vision (SCV), part of the Sun TV group, DMKs voice in the media world, is a large cable operator in the Chennai area. They are in a huge acquisition spree, acquiring small cable operators in all parts of Tamilnadu.

So the more people have TV, the more subscribers for Sumangali Cable Vision, the more revenue! TADA!

And since SCV is in acquisition spree, very soon, they will have a huge monopoly in cable business.
Of course the cable service might be free for sometime, say 3 months or so, much similar to the ‘deals’ that they give in USA.
But after that, there is a great chance, that they can charge high amounts for the cable service. This also serves as a platform for them to provide broadband internet services through cable, similar to Comcast in USA.

Once almost every household have TV and SCV, DMKs voice, it can be used as a powerful media to push the agendas of DMK. They can literally control what the people can see and listen through TV.

This is really an ingenious plan.


Anonymous said...

Who will pay for the TV?

vimal said...

As it is 'free' tv from government, end of day its going to be Taxpayers money!