DD is the India's premier public service broadcaster with more than 1,000 transmitters covering 90% of the country's population across an estimated 70 million homes. It has more than 20,000 employees managing its metro and regional channels. Recent years have seen growing competition from many private channels numbering more than 65, and the cable and satellite operators (C & S). The C & S network reaches nearly 30 million homes and is growing at a very fast rate. DD's business model is based on selling half - hour slots of commercial time to the programme producers and charging them a minimum guarantee. For instance, the present tariff for the first 20 episodes of a programme is $30 plus the cost ofproduction of the programme. In exchange the producer get 780 seconds ofcommercial time that he can sell to advertisers and can generate revenue. Break-even point for the producer, at the present rates, is thus $75 for a 10 second advertising spot.

Beyond 20 episodes, the minimum guarantee is $65 for which the producer has to charge $115for a 10 second spot in order to break-even. It is at this point the advertisers face a problem - the competitive rates for a 10 second spot is $50. Producers are passive about buying commercial time on DD. As a result the DD's projected growth of revenue is only 6-10% against 50-60% for the private sector channels. Software suppliers, advertisers and audiences are deserting DD owing to its unrealistic pricing policy. DD has the following options; first, it can privatize, second it can remain a purely public service broadcaster and third, it can take a middle path. The challenge is to exploit DD's immense potential and emerge as a formidable player in the mass media.

1. What is the best option, in your view, for DD? Justify your answer.
2. Conduct Porter's five forces analysis for a typical media broadcaster like DD.