As the world gets all wired up, broadcast, production and video-on-demand companies are fine-tuning their digital entertainment strategies. While some are launching new platforms, others are experimenting with new and edgy content for digital audiences, and there are still others who are beefing up their library in order to cater to regional markets.
Consider these facts. According to the 2015 Ficci-KPMG report on the media and entertainment industry, India is the world’s fastest growing smartphone market. By the end of 2014, the country had around 116 million internet-enabled smartphones and the number is expected to reach 435 million by 2019. Gaurav Gandhi, chief operating officer at Viacom18 Digital Ventures estimates the digital video market to currently stand at a little more than 15% of the total digital advertising market, but growing rapidly – both in terms of shares as well as absolute numbers. Video consumption on digital devices is expected to shoot up in the coming quarters, led by 4G expansion as well as increased broadband connectivity and wi-fi zones.
Encouraged by these factors, a clutch of new launches in the mobile video entertainment space has overwhelmed the market. Production house Balaji Telefilms has launched a new vertical called ATL which will put out original digital entertainment while Eros International has launched ErosNow, a premium destination for film premieres and other forms of content. Broadcast company Viacom18 will be launching its digital streaming operations in the form of a new over-the-top (OTT) service, which will be advertising led and much in the same vein as Hotstar, the video streaming app from the Star network.
Hungama Digital Entertainment will soon integrate television programming into its movie application HungamaPlay, and is already in talks with potential partners for the same. Sony Pictures Television and Warner Bros Entertainment have collaborated to launch HOOQ, a regional OTT video service in Asia. Meanwhile, Netflix is gearing up to enter India by the middle of next year.
Mihir Shah, vice president at consulting and advisory firm Media Partners Asia (MPA) says the online video industry is geared up to witness strong exponential growth in the coming years. Services which are in the pipeline such as Viacom, Reliance Jio and Netflix will expand the market for non-linear video consumption. The industry is currently at an exploratory stage where several new companies are rolling out differentiated product offerings. “The pace of movement is tremendous and we will see more than a dozen branded OTT services streaming in India by next year,” Shah says.
Here, the Hotstar strategy of digital premieres is particularly interesting. Bombay Velvet—a grimy drama with gun-toting mob men premiered on Hotstar, even before it arrived on television. A Hotstar executive, who did not want to be named, says there will be other digital premieres for films such as Phantom, Prem Ratan Dhan Payo, Bajrangi Bhaijaan and Dhrishyam. Surrounding this content will be a lot of other chat shows and other peripheral content which will also be streamed on Hotstar to drive viewership, the executive adds. Chat segments with the cast of Bombay Velvet got Hotstar nearly 2 million video views in two weeks.
Says Viacom18 group chief executive Sudhanshu Vats, “The broadcast industry is growing rapidly and digital content, delivery and access are the new greenshoots. We are looking to leverage the interception between a highly digital audience and the current content offerings.” When asked if Viacom18 had a slightly late start in India, Vats, in an earlier interaction, had said, “I wouldn’t say that we have had a slow start on digital in India. Before we launch into anything, we need to examine the market dynamics.” He had said that though digital is the platform of the future, it cannot be monetised much as a platform in India. “The big monetise-able platform for content is television.
In the short term to medium term—it is likely to stay that way. But should we be future ready? Absolutely,” he had said.
Goldmine of content
Sameer Nair, group chief executive at Balaji Telefilms says that original television oriented programming on digital gives it a chance to own the intellectual property rights (IPs). “We own the IP rights to the films we make, but not the television shows. Digital entertainment gives a chance to own the rights.” Digital entertainment helps it monetise its creative abilities and create a scalable and profitable business model. “We can create content that is different from what broadcast networks play out at 9 pm on television,” says Nair, adding that 75% of Indian audiences accessing the internet are aged 19-30 years and are increasingly looking for entertainment on new destinations. The company is gearing up for original drama series across genres and it will first put out content in Hindi and English, before expanding into regional languages. It is seeking partnerships with technology and video platforms where this content can be leveraged, along with its own platform.
Eros International’s digital platform ErosNow will telecast a series of Bollywood films such as Tanu Weds Manu Returns, Badlapur, NH10 as well as Shamitabh and Happy Ending. It has recently announced a content acquisition deal with Pakistan’s on-air and digital content company Hum TV. The deal gives it access to shows such as Zindagi Gulzar Hai, Humsafar and Dastaan.
Karan Bedi, chief operating officer, ErosNow says that India will soon mirror the US in terms of a steady and remarkable shift from television to digital. “Over the next five years, expansion of 4G networks and low and midsized models of smart television sets will change consumption patterns in India,” he says.
In the US, this shift has led to the success of business models such as Hulu and NetFlix. Eros will have a drama series called Khel, which will encapsulate all the wealth and politics behind the Indian Premier League. Then there is a thriller called The Client which will be directed by Rohan Sippy and will star Bipasha Basu. “We will also be doing a period drama in Tamil, called Ponniyin Selvan,” says Bedi. ErosNow has over 26.5 million registered users worldwide, and is accessible on any internet-connected screen. It offers films, television content, music videos and audio tracks and premieres of films, before they arrive on television.
Video-on-demand platform Hungama Digital Media Entertainment is in the middle of planning a foray into television programming. It recently launched HungamaPlay, an application for streaming of standard definition and high definition films on IOS and Android. It will soon integrate television content onto HungamaPlay which will be launched as soon as the next quarter. “We believe in content that has archival value,” says Siddhartha Roy, chief executive at Hungama. “This will include the best in comedy, fiction and a whole lot of lifestyle content.” There could be content for kids also – around fun and learning. “Our model is different from broadcasters who are primarily using digital for catch-up programming. We want to put out content that is not available elsewhere,” he says. For films, Hungama will have partnerships with Warner Brothers, Disney and Yash Raj Films. For television, the company wants to build a similar ecosystem working with original content creators.
Regional play is also important for Hungama. The regional titles on HungamaPlay cover the choicest collection of Telugu, Tamil, Malayalam, Kannada, Marathi, Oriya, Bhojpuri, Gujarati, Bengali and Punjabi films. Around 42% of its audiences search for regional content, according to the company.
Or take SonyLiv, the OTT platform from Multi Screen Media (MSM), which is all set to launch differentiated content which will be rolled out till March 2016, in a bid to appease millennials. SonyLiv claims to have seen a 30% increase in viewership, downloads and unique views month on month. Shows such as Hannibal Season 3, Sankat Mochan Mahabali Hanuman and Suryaputra Karn premiered first on SonyLiv before going live on television. Hat-Trick, a fantasy league game which was launched on the platform, also saw a huge response.
MSM executive vice president and digital head Uday Sodhi believes that India’s OTT video sector is nascent but the market for online video consumption is developing rapidly. Year 2015 will be a key one with the launch of at least three major OTT video platforms. As digital becomes an important cog in the wheel of media spends, categories such as fast moving consumer goods (FMCG), e-commerce, telecom and educational bodies have opened up, which could explain a lot of the new launches.
The medley of stakeholders
It is interesting that everyone, from production firms to broadcasters to telecom operators to video-on-demand players, is looking to be part of this value chain. Bharti Airtel has entered into a partnership with ErosNow for its mobile application – Wynk Movies. Reliance Jio will also look for greater play in original content. But is it possible for a telecom operator to block out content from certain companies, in order to favourably place its own content? At a recent press interaction, Subhash Chandra, chairman of Zee and Essel Group Technologies said that technologies such as 4G will only augment efforts in content. “I think that it is important to realise that no one can be a gatekeeper in today’s world. If you have good programming to offer, people will watch it. I could own many platforms—digital, cable or even a telecom company, but unless my content is good, it won’t strike a chord with the people,” he had said.
The subscription versus advertising debate
While Viacom18’s imminent launch of a digital platform is likely to be an advertising driven model, the Balaji ATL model will offer both subscription and premium ad supported models, targeted at domestic and global audiences.
Nair at Balaji says that people will pay for what they perceive as holding value. The fact is that consumers today spend a lot on movie tickets and entertainment in-theatre, as also e-commerce websites. “Five years back, one would have said that the market isn’t ready for e-commerce and yet here we are,” muses Nair. “We are creating original content from the word ‘go’.”
Advertising will be on a selective basis at Balaji. Digital entertainment is premium and clutter-free – this means that there cannot be advertising in a conventional sense. “But there will be ways to integrate premium advertising into what we are doing on a case-to-case basis,” says Nair.
“We have started rolling out a lot of non-TV campaigns, as we believe the digital medium helps us strengthen our engagement with our consumers,” says Harpreet Singh Tibb, marketing director,Kellogg India. The brand’s customisation campaign ‘Kelloggs wale Guptaji Ki family’ in partnership with YouTube, has garnered 11 million views becoming the third largest food channel and the largest breakfast channel on YouTube, according to the company.
A broadcast expert who wishes to be unnamed, says India is not a subscription led market yet. “Cable rates are the lowest in the world. And the consumer already pays a lot on internet charges. Why would she be willing to pay premium rates for digital content?”
Nair, however, adds that there could be other monetisable forms of content later. For instance, on a digital series, it may be possible to order what product the protagonist is wearing or using. “All you need is someone to connect the dots. And we are fast getting there,” he says.