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

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)...

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...

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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