WorldSpace Satellite Radio: Fading Signals?
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Case Details:
Case Code : BSTR239
Case Length : 22 Pages
Period : 1990-2006
Organization : WorldSpace Corporation
Pub Date : 2006
Teaching Note : Available
Countries : The US, India, Africa
Themes: Corporate Strategy
Industry : Media,
Entertainment, and
Gaming
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Promotional Campaigns
When WorldSpace India was launched in 2000, it launched a
nationwide advertisement campaign, even though the service was initially
introduced only in the cities of Bangalore and Chennai. After the adoption of
the subscription-based business model in 2004, another print and TV ad campaign
was launched in the cities in which the company had a sales presence...
Localized Content
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WorldSpace India's growth was also attributed to the wide range of content that
the company provided on its channels. Channels like "Farishta", Jhaankar (Hindi
Film Music), Shruti, Ghandharv (Indian Classical Music), and KL Radio (Tamil),
among others, not only entertained music lovers across the country but also
Indians living abroad who received these channels through the AsiaStar
satellite, whose footprint covered parts of Asia, Europe, and Africa. The
television news channel NDTV India broadcast the audio component of both its
English and Hindi news, along with other news providers like CNN International
and BBC world. (Refer to Exhibit VII for channels broadcast via the AsiaStar and
the AfriStar satellites)...
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Competition
The greatest competition for WorldSpace India came from the private FM channels
that had begun operating in India from 2000. A number of FM channels were
launched in this period and they claimed to provide non-stop entertainment to
listeners. The success of FM channels was also attributed to the rising number
of cars in India. These channels targeted people traveling in cars and became a
source of entertainment during travel. They were localized and catered to
specific pockets in various regions across India and were usually broadcast in
the regional language...
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The Challenges for
WorldSpace
WorldSpace Corp.'s total revenue in 2005 was $11.6 million of which $3.4
million (29%) came from WorldSpace India. The first two quarters of 2006
yielded revenues of $7.2 million worldwide. The net losses that
WorldSpace had been posting since its initial launch fell substantially
from $577 million in 2004 to about $80 million in 2005 (Refer to Exhibit
VIII for WorldSpace Corp.'s Financials between 2004 and 2006). However,
while the other two satellite radio service providers, XM and Sirius,
made substantial ground in their areas of operation, WorldSpace, which
was considered to be the pioneer in digital satellite radio, continued
to suffer losses... |
Exhibits
Exhibit I: WorldSpace's Old Logo
Exhibit II: A Note on Satellite Radio
Exhibit III: WorldSpace's Satellite Coverage
Exhibit IV: WorldSpace Corp. Subscription Base Over the Years
Exhibit V: WorldSpace Receivers
Exhibit VI: WorldSpace India's Subscription Rates
Exhibit VII: List of WorldSpace Channels
Exhibit VIII: WorldSpace Corp. Financials
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