1. The Digital Content Conundrum

The Digital Content Conundrum

The ability to create new video content is singularly dependent on the ability to inexpensively distribute it and effectively monetize it

Published: November 11, 2014 12:17 AM

Broadcast television remains the killer app for mass distribution of video content. No other platform comes even close. And now the DVR feature on addressable systems allows you to record your favorite shows and watch whenever you want, making TV come very close to delivering a VOD (video-on-demand) experience—that holy grail of video content consumption.

But TV has its own challenges. For the most part, it is immobile— though increasingly both platforms and apps are offering live streaming television onto other devices—phones and computers.

While the TV screen population is now approaching 200 million and nearly 80 million of those are DTH/digital cable screens, the number of mobile phone screens are almost 800 million. While these are mostly ‘dumb’, the rise of the smart phone screen will soon overtake TV screens. India, as always, is leapfrogging into a multi-screen environment—more than 900 million Indians will experience the internet for the first time in their life not via a conventional computer but via a phone or tablet device.

The challenge for internet and mobile connected screens as compared to broadcast screens is poor bandwidth. Neither the internet nor mobile was originally built for video. But both have very quickly become the brand new platforms for video distribution. Social media distributes YouTube videos instantly and between apps, social networks and CDNs (content delivery networks), video is suddenly available everywhere, anytime and even on the go—but it is not always a pleasant viewing experience.

Every time a new platform or device or medium is invented, the chorus begins, “What kind of content will work on this new medium?” And the answer every time is the same. To start with, old content is distributed on the new medium. It happened with television, which lived off movies, songs and dubs in its early years. Then as a medium matures and gains traction—in both number of users and ability to monetize—it starts to create new original content, often tweaked, customised and mutated to suit the new consumption habit.

For now, the video being distributed and consumed on the new digital screens is old and existing content, lots of rehashed, pirated and user created content. The inescapable conclusion? What changes in the first instance is never content but a consumption habit—about how, when and where the same content is consumed. Only very slowly are we seeing the first green-shoots of original created content. Most of this is still short-form, DIY, How To and funny stuff, supported by a fragile, low value ad-model.

The ability to create new video content is singularly dependent on the ability to inexpensively distribute it and effectively monetize it. Currently broadcast and theatre screens are a proven way to distribute and monetize video content. Internet, mobile and social screens are getting there. When today Netflix in the US commissions its own expensive original series House of Cards and funds the sequel to Crouching Tiger Hidden Dragon, it behaves like a traditional TV network and movie studio, and only because it has the critical mass of high-value paying consumers to
allow it to create new content in addition to acquiring and re-distributing existing content.
The rapid speed with which digital screens are spreading boggles the mind. Technology is playing catch-up, trying to create the affordable

bandwidth and architecture to enable hundreds of millions of users to simultaneously consume video on their multiple screens via a variety of access points. The big advantage with mobile is that it has a ready-to-use wallet and billing system in place. So what do digital screens, the VOD application and a billing mechanism offer the consumer and creator alike? Millions of niches of content without the tyranny of a broadcaster’s schedule or an individual programming head’s taste.

Direct-to-consumer first saw the incredible rise of social media. Now direct-to-consumer, with billing in place (DTH, mobile, even e-commerce giants aspire to distribute and retail video), creates amazing new opportunities for content creators. That’s what makes the future of digital video so exciting.

ADDENDUM By Sameer Nair

The author is Group CEO, Balaji Telefilms

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