Question

What is a neutral strategy? How does it affect TV production? (400 words, 2 sources)

Answer 1

Neutral strategy in literature meaning is market neutral position where a firm does not take any major risk but position itself in the market in such a way that if one product does not go well the other product runs well. This strategy is mostly used in investing activities of securities where the investor or investment firm seeks profit from both increasing and decreasing price by avoiding complete market risk. It is also called as long and short strategy in finance world.

When we implement this strategy in firm level, it works well for some industry where product mix is much more, and business can play around different product to maintain the profitability. If we implement this strategy on TV production then it will fit best. Like the way financial instrument behave where each share has different dynamics and independent to other share in such way different shows in TV production are also independent and behave differently. In TV production out of 4-5 shows if any two shows click on the market and TRP increased then the firm earn quite awesome revenue. All the Tv producers know that all of their product won’t run successfully in the market because of taste and preference of viewer are different in different times. By using this strategy, a TV production house can redirect their shows in that way where they can play around the slots and content such that it can attract maximum viewership.

We can take best example of Netflix, Amazon Prime etc. in this facet because they are using market neutral strategy to maximize their revenue and relevant in the market. These video on demand house stream their video in different geography and market in such way that they maximize their revenue. We can take example of Netflix in USA and India and how through market neutral strategy it maximizes itself. They know the content requirement in USA and India are different hence they do not want to impose what American viewer loves to Indian viewers and vice-versa. They are completely avoiding specific form of market risk in both the market by not meddling up with viewer’s choice.

Source- Investopedia, Policy and Marketing Strategies for Digital Media- Yu-li Liu, ‎Robert G. Picard - 2014