PPS.tv is a Chinese peer-to-peer streaming video network software, which became popular in the mid-2000s, and today is one of the most popular platforms in China. However, the start-up did not immediately succeed in becoming a sustainable business that brings a steady income (Anthony et al., 2008). In 2008, the founders of PPS.tv faced many problems related to the objective conditions of the Chinese market. This paper aims to provide recommendations for PSS.tv, using external and internal analysis management strategies.
PESTLE and SWOT Analysis
PPS.tv had high chances to take its niche in the market, as it had many strengths. The most significant competitive advantage of PPS.tv was its unique broadcasting technology, which allowed users throughout China to watch videos without waiting for downloads and buffering. Although the introduction of technology required significant investments, it has become a stable base for the company’s business (Anthony et al., 2008). However, the right technology could not help with the company’s primary weakness – the need to immediately establish a reliable channel of profit for getting IPO status. The primary source of revenue for the company was advertising, but advertisers put forward many hard-to-meet requirements.
Nonetheless, the high standards of international advertisers played into the hands of PPS.tv, allowing their technology to be used to expand its opportunities. At the same time, high competition could pose a threat to the start-up business, as it had less experienced managers and less extensive investment opportunities. In particular, PPS.tv had to adapt not only to advertisers, withstanding fierce competition with more influential market participants, but also to demonstrate success in this area to potential investors.
The business of the company was complicated by the political and legal situation in the Chinese media market, which was in no hurry to introduce stricter measures to protect the business but had a developed system of fines and penalties. At the same time, economic factors, such as the fact that China was a new market, created a situation in which PPS.tv could rely only on international advertisers. Chinese advertisers did not see prospects in the online business, did not trust the statistics on online advertising, and therefore did not want to invest money.
Social factors partially compensated for this situation – projects such as PPS.tv were very popular with viewers. Consequently, it would not be difficult for a company to attract more users to compete on equal terms with more influential players. As noted above, investment in technology development was an excellent move, which allowed the start-up to reach a vast audience across the country. Besides, a sound technological base helped to meet the high demands of users and advertisers.
In the proposed case, possible solutions that start-up developers were going to address were considered. However, convincing reasons were given for why these solutions could significantly aggravate the problems faced by the business (Antony et al., 2008). The main mistake in developing these solutions was that entrepreneurs focused on their weak sides, while they should pay attention to the opportunities of that their business. Based on the analysis above, the most favorable external factor for PPS.tv is the social factor, namely, a high level of user interest in such platforms. It means that investment in content development and diversification has high potential. Therefore, companies should use their technology to become a platform with the highest number of users. To implement this decision, the company would need to convince investors to allocate funds for the development of several projects.
First, the company should hire an excellent lawyer to help the company gain an advantage from the state of China for distributing high-quality and legal content, and also find out ways to combat pirated content as a competing force. These could be some logos that draw the attention of users to PPS.tv’s high level of consciousness and its high-quality content.
Secondly, companies should find a cheaper alternative to American and European popular TV shows and films. And this alternative can be not only local Chinese films and TV shows. For example, PPS.tv. may include educational and enlightening content that is 10% state-funded: Chinese educational cartoons, programs on healthy eating, online yoga, or fitness classes. It can also be films and TV shows of non-American and non-Chinese production: television production of Bollywood, Turkey, South America, inexpensive art-house movies of young directors from Europe and other countries. This move will expand the circle of users in terms of their age and purchasing power and will make PPS.tv a more attractive platform for advertisers.
Finally, if PPS.tv investors have sufficient funds, they can create their content-production studio. The studio can be based in China or one of the neighboring countries, and produce series, anime cartoons, and films with a low budget. Reality shows (like Bachelor, Stay Alive) can also be in good demand. Filming a reality show is not much more expensive than TV shows or films, but they open up a ton of opportunities for advertising included in the video. The company can also film local “smart” reality shows for another segment of consumers, following the example of those offered by Da Vinci Learning or Fashion TV. For this, PPS.tv could sign agreements with television channels for using their ideas.
Thus, recommendations for PSS.tv were provided, based on PESTLE and SWOT analysis models. To summarize, leading technologies are the most favorable internal factor. At the same time, the social factor, expressed in the growing interest of viewers, provides continuing external support to the start-up. Therefore, the company should rely on these strengths to solve problems with investors, advertisers, and gain IPO status. The most favorable solution may be to increase the number of users by expanding content, as well as creating a content-production studio.
Anthony, K., Chen, R. E., Rackoff, A., & Wong, W. Y. (2008). PPS.tv and China’s online video distribution market. Web.