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ITV could either join forces with the UK’s other public broadcasters or operate on its own to create a viable rival to Netflix for UK consumers - Edexcel - A-Level Business - Question 1 - 2022 - Paper 3
Question 1
ITV could either join forces with the UK’s other public broadcasters or operate on its own to create a viable rival to Netflix for UK consumers. (d) Using the data ... show full transcript
Worked Solution & Example Answer:ITV could either join forces with the UK’s other public broadcasters or operate on its own to create a viable rival to Netflix for UK consumers - Edexcel - A-Level Business - Question 1 - 2022 - Paper 3
Step 1
Join forces with other public broadcasters
Answer
Combining resources with other public service broadcasters (PSBs) such as BBC and Channel 4 could provide significant benefits.
Benefits of Collaboration
- Economies of Scale: A joint venture may allow ITV to reduce average costs and share resources. This could help in pooling technology and infrastructure, reducing the financial burden on ITV
- Content Pooling: Sharing original programming may attract more audiences and help ITV to compete effectively with Netflix's vast content library.
- Regulatory Support: Joining forces may offer a better chance of achieving regulatory approval, as it serves a public interest objective.
Challenges
- Corporate Influence: There may be clashes in corporate objectives and strategies, which could lead to organizational dissonance and ineffective management.
- Risk of Failure: Past attempts (like Kangaroo) have failed, indicating the potential pitfalls of such collaborations.
Step 2
Operate on its own
Answer
Opting to operate independently could also offer ITV unique advantages.
Benefits of Independence
- Flexibility: ITV would have the freedom to develop its own strategic vision, tailor content specifically for its audience without the constraints imposed by partner broadcasters.
- Ownership of Content: It could maintain full ownership of its intellectual property, leading to potentially greater profitability in the long run.
- Targeted Strategy: ITV could focus on niche markets and explore innovative content that specifically caters to the UK's viewing habits, which might not be of interest to larger conglomerates like Netflix.
Challenges
- Increased Costs: Operating independently may lead to higher operational costs, including technology, production, and marketing expenses.
- Market Competition: Facing a saturated market and stiff competition from established players like Netflix, ITV may struggle to attract and retain subscribers without partnerships.
Step 3
Recommendation
Answer
In evaluating both options, a joint venture with other PSBs appears to be more strategically viable. The collaboration could reduce operational costs while giving ITV access to a broader audience and enhanced programming capabilities.
By pooling resources, ITV can create a formidable rival to Netflix, maximizing its chances of success in an increasingly competitive landscape.