Industry Profile and Outlook
Our company will operate in the internet television industry. The industry is relatively new, fast growing and revolutionary. Our company will broadcast channels from Russia and other post soviet countries through Internet Protocol Television system (IPTV). IPTV is the digital distribution of television content via internet. IPTV allows the users to choose channels and show from an archived database either by streaming it from the server to a media player or directly downloading it to the user’s PC. This service is also known as TV on Demand. The peak times usually occur at 10pm and the data transfer can rise to 12GB per second, and that calls for a need of powerful servers, often maintenance and reliable internet provider. The figurine below shows the benefits of IPTV to all interested parties.
Our top competitors would be NetFlix, the biggest TV on Demand company in the US, International Media Broadcasting (IMB), who provides foreign language ethnic television, and Russian Canadian Broadcasting Corporation (RCB). Even though our target market, which is Russian speaking population of Canada, maybe not so important for NetFlix, this company still stays as a top competitor for us since many people from post soviet area who live in Canada for a significant time may not even look for Russian television and just subscribe to what is well known, these findings put our marketing strategy to a top priority. Our advantage is that NetFlix doesn’t stream any Russian channels or movies in Russian language or with subtitles. The RCB too doesn’t stream channel to choose from only selected programs or own news reviews on North America and CIS which is a really narrow choice for clients but still can draw our clients since RCB are located in Toronto and streaming also through Roger’s and Bell’s channels. The IMB company ,the most relevant competitor to our target market, is streaming 11 Russian channels which is from our point of view not enough for customers. As it was stated before the industry we will be operating in is relatively new to the market and significantly fast growing. In 2008 the actual amount of IPTV subscribers was 1 million and it grew to 26.9 million at 2009. According to the research it is predicted to grow to over 81 million at the end of 2013 and that just shows how the market is expanding. Another key factor that points to extreme increase in this market is that the revenue is expected to increase from $9.7 billion in 2009 to $25.6 billion in 2013 for that industry. This indicates that technological changes created a new market to enter and increasing availability of the internet access for households will keep it growing from year to year. Even though there are many companies in that industry both North American and European this market is still undeveloped and so to speak “undivided”. If we take NetFlix as an example of growth we can see that in the company recorded revenues of $2,162.6 million during the financial year ended December 2010 (FY2010), an increase of 29.5% over FY2009. The operating profit of the company was $283.6 million during FY2010, an increase of 47.8% over FY2009. The net profit was $160.9 million during FY 2010, an increase of 38.8% over FY2009. We may be not as large as NetFlix because our target market is significantly smaller but this data shows the noticeable increase in profits and what is more important it shows the increase of technological availability and increase of market potential.
Since our business is providing television by IPTV we don’t have the geographical limits for our market and can expand to any place by not even being physically located there or having a representative office. But still on our early stage of business we will be aiming on Toronto’s Russian population which amount to 400,000 people primarily inhabiting North York, Thornhill and Richmond Hill. The community is well...