With the rise in digital content consumption in India, Amagi is all set to leverage the tidal shift
After being operational for over 10 years, media technology company Amagi is now looking at India as its next big market. Relaunched three months ago, Amagi has already made strides by acquiring some of the leading media houses as its clients. In conversation with BrandWagon Online, Baskar Subramanian, CEO and co-founder, Amagi, talks about the company’s plans for India. (Edited excerpts)
How does Amagi work and what is your core value proposition?
We have a three pronged business. On one hand we work with content creators worldwide, on the other side, we work with the distribution of that content. Presently, most of the OTT consumers have subscribed to at least three or four OTT platforms. When we see this from a global perspective, there are more than 1,000 distribution mechanisms through which people are consuming content today. We as a platform, allows these content creators to distribute the content through content distributors, and be able to monetise it by advertising. That’s our core value proposition.
How has your business fared in the past one year, post pandemic?
For the last three years, we have been able to double the revenue. While I won’t be able to provide you with our exact financials, we are expecting to see a three digit run rate of Annual Recurring Revenue (ARR) in the next 12-18 months. Our largest market is the US and our growth is driven from there. Thanks to the rise in content creation and its need to be made available across the globe, we are expecting to clock a 15% rise in revenue in the next 12-18 months. As for advertising revenue, in the 40 countries that we operate in, Amagi has a total of 550 channels. Through these channels we offer over two billion advertising opportunities every month which is about $200-300 billion worth of advertising that actually goes through our system on an annual basis.
What are your plans for India?
Presently, India is not a major market for us. We’ve been very focused on the US and the European market. However, we plan to change this and relaunch ourselves in India and Asia. While India has great content and high viewership, the challenge we faced was the slow migration of advertising dollars from television in OTT when we looked at the market about three-four years ago. For example, in the US, there is a definite shift of traditional television paid TV dollars, or what we call the broadcast dollars moving into connected TV platforms which are primarily OTT platforms. But as a shift in consumer behavior takes place in India, we are now seeing advertising move from traditional to digital. In fact, the rise in digital content consumption is recorded not only in mobile consumption, but also in Smart TV consumption. I think Indian market is evolving and in the 18 months we will see a sizable chunk of the ad revenue moving to digital.
What has been your content distribution strategy and how do you look at India from a distribution perspective?
About two years ago, we started distributing Indian content in the US, catering to the diaspora. Similarly, we have distributed South Korean content in Portugal. In India, we started operating nearly three months back with the launch of Apple TV. Currently, we are working with content owners such as Airtel Xstream and Samsung TV Plus and bringing American and European content to these platforms. We are also exploring Indian regional content being made available for Hindi speaking markets. We are already in talks with companies dubbing languages and subtitling across Indian regional languages.
In the few months that we have been operational in India, we have onboarded about 7-10 customers. While our customer base is small in India compared to over 170 customers globally, we are working with leading networks such as Zee, Viacom18, NDTV, Times Network, among others. We further plan to expand our base going forward.
How does your business model work?
We operate on a SaaS (Subscription as a Service) model. Our customers pay us on a per month basis for leveraging our technology platform. So they pay on a per month basis. The fee depends on a slew of parameters such as content type- live sports or news content; graphics- SD, HD, Ultra HD and so on and so forth. In India, we have customers from whom we charge a monthly fee of 2.5-3 lakhs but then we also have high-paying customers who pay 10 lakh per month for using our platform. In addition to it, we have advertising revenue. On the basis of the number of impressions a particular ad fetched, we charge our clients a fee ranging between Rs 50-150 per impression.
Out of the three revenue streams that we have, distribution of content accounts for the lowest share of revenue at 8-10% while 30% comes from monetisation of content. The remaining 60% comes from channel creation– our largest revenue stream.
As per the latest FICCI-EY report, there were 20 million connected TVs in India, however only five-seven million are actually connected to the internet. Keeping this in mind, what are your future plans with operation in the connected TV sphere?
From what we are seeing in the emerging markets, mobile consumption is gaining wind as media consumption on mobile continues to rise. Hence, all our strategies are surrounding this. For us, mobile devices and connected TV are two ends of the same infrastructure. The consumption of content does not differ for us in these two platforms as it might do to the user. As for the growth of connected TV in India, I believe it’s a circular problem as consumers don’t opt for it because of the lack of content and content creators don’t make their content available on it due to low audience.
However, already the likes of Samsung, Xiaomi, Panasonic, are starting to think about building a content strategy to increase their audience base. Most of the connected TV users simply browse Youtube, OTT platform or switch to paid TV. So for connected TV to truly grow in India, there needs to be a strong content pipeline.