While focussing on solving technological video-related issues, Vuclip realised the need gap for locally relevant content and soon entered the crowded OTT space with Viu, a technology-driven media company. Backed by Hong Kong-based M&E group PCCW, Vuclip is now upping its OTT game by carving a niche for Viu and building on it through a soon-to-launch brand campaign. In conversation with BrandWagon’s Chandni Mathur, Vuclip’s Nickhil Jakatdar highlights the company’s plans ahead. Edited excerpts:
With a strong focus on solving technological problems around video, what triggered Vuclip’s move to OTT?
With OTT, we didn’t know what we were really getting into at first. It almost happened organically. We focussed on solving all technological problems around video; but if we want to understand how consumers think about our technology, we have to get into the content game. We started licensing content but when we tried to get more appealing content, we realised there wasn’t much available. That is how we got into producing our own content and before we knew it, we had become a technology-driven media company. Another lesson we have learnt over the last few years is that when it comes to content, leave your intuition at home because what will appeal to consumers is not driven by intuition.
Tell us about the performance of your other verticals — games and Vuclip videos?
Vuclip videos are short-form content for entry level users who are using data for the first time. Across all our 22 markets, we have around 10 million paid subscribers but they pay smaller amounts. We are now going after electronic art (EA) games, but are trying to make it more accessible to the bottom of the pyramid. Consumers are already coming to us for video entertainment; we want them to come to us for gaming entertainment where we will try to make high-end games more accessible, and leverage existing technology and billing infrastructure. At some point in the future, maybe we could look at Viu and Viu games as well.
It has been a year since Viu launched in India. How is it growing?
When we started, we set a goal for ourselves that till we get the consumption to hit a meaningful number, we will not know if our strategy is working and until then, we are not going to spend on brand marketing. To us, it is a very powerful weapon, once you have got the basics right. I think we have come to that point where we have hit the metrics we care about. We tried out a lot of different things in terms of content and concluded that the biggest gap was that consumers were not getting locally relevant content and we needed to go after that.
Today, we are not limited by investment; we are limited by what content or script passes our filter. In fact, Samsung has exclusively done a deal with us; its video section has Viu inbuilt in the My Galaxy App.
We are very sure that we are not going to play the sports, or the Hollywood and Bollywood game in terms of latest movies. We are going to play in original, locally relevant content. We will get more foreign language content and originals going ahead, now that we know this works and we already have a relationship with content owners across different markets. We will also license content in India and focus more on underexposed movies. We are not attempting to say we will try to be everything to everybody. Even in the US, no one has managed that.
Depending on the market, we are seeing that 60% of the consumption is still locally relevant content and 40% is either Hollywood or Bollywood.
In India, we have 4.5 million monthly active users. Since we have PCCW on board, we have already invested around $100 million (over Rs 700 crore).
Do you think a freemium model is the best way forward in a market like India?
We follow the freemium model where we provide certain content that is free forever and that is what gets consumers to keep coming back.
The free content is monetised through advertising while the pay is through a monthly subscription of Rs 99. If you always put content behind subscription, many people won’t even give it a chance. We believe the freemium model is the right model for emerging markets. Today on a purely ad supported model, it is difficult to build a sustainable business because TV ad dollars have not yet shifted meaningfully. It’s moving but not as much.
So how does one build a business and yet make it attractive for consumers? Whether it’s the content or the business model — both have to be customised.
In India, Netflix, Amazon Prime, Hotstar, etc already have a formidable content base. What does Viu have to do to be the platform of choice for the viewer?
We expect to coexist because we are not trying to do the same thing as other players. Not every user will use every app but in the end, when four or five apps are left standing, any consumer will at any given point of time be using at least two of them. We don’t want to go head-on with the three or four big guys; we want to have a very clear niche in the consumer’s mind on why they should come to us and as long as we do that well, we are fine.
Today there are 30 players, but I just don’t see how that is going to be sustainable. The key is to make viewing a habit. Whether it takes a year-and-a-half or three years, it will probably come down to around four to five players, each of whom needs to have a very clear reason. I see consolidation happening. I see some people just dying away and I also see broadcasters having their own app but that content will also be available on another platform like Amazon, etc as in the US.
Today, most people are holding onto their content hence there are 30 pockets, but that is not sustainable.