A decade or so ago, cinema was the big screen and TV the small screen. Now add to it, an even smaller screen. You don’t have to go too far to seek it either. At the nearest IT Park or the Metro station, even the market square, you can see millennial and IT professionals, staring in rapt attention at their hand-held screens.They run to a type. Sitting in their offices, riding in their cabs or hunched over their tablets in the Metro, a vast majority of them are armed with earphones; those who are not, are fiddling with their smartphones.
Quite clearly, the screen has shifted from the big to the small. With nearly 70 per cent of demand for video consumption now coming from a range of hand-held devices, including tabs and smartphones, these are the new screens driving the market today.
Sure, television is not yet passé, but the market has started moving beyond it for delivering video content.
Five-year-old Tanushree epitomises this new trend. On May 7 this year, on Super Singer Junior – Season 5, a musical talent hunt show for children on Tamil television channel Star Vijay, she captivated the audience.
In the devotional round, on display was her soulful rendering of Ammavum Neeye, appavum neeye…., an old popular Tamil song from the 1960 film, Kalathur Kannamma, in which Kamal Haasan debuted as a child artist, where he had also lip-synched for this song.
Impressed by her rendition, popular Carnatic musician and playback singer Nithyasree Mahadevan, who was also among the three special judges for the show, asked Tanushree how she had managed to bring out her emotions so well? Did you see the video or did your parents play it on TV for you to practice, she asked of the little performer.
Neither, said Tanushree. “My parents played it on the mobile and my tab. I watched it and practiced.” The popular Mahadevan, not yet out of the forties, confessed she belonged to another generation where television was the defining screen. That little exchange between the two, pretty well sums up today’s India.
While the big screen come into public focus only when a Bahubali or a Kabali is released, the small screen in the form of TV sets, continue to be omni-present in our living rooms and bedrooms, demanding our eyeballs
But, the two have now got strong competition from the smallest screen and the threat is compelling. While desktops vied for the ‘smallest’ title for sometime, the launch of iPads, tablets and smartphones, put paid to their aspirations
Since then a number of developments have changed the topography substantially. Availability of high speed internet bandwidth, a gamut of smartphones, especially 4G devices, over-the-top (OTT) content providing platforms such as Hotstar, SonyLIV, Voot, Netflix and Amazon Prime, and focused content creators for this emerging digital space – all are driving the growth in this segment, which barely existed even two-three years ago in India.
The falling prices of internet bandwidth, as a slew of players like ACT, Hathway, Cherrinet and Railnet compete with telecom players like Jio, Airtel and Idea, to flood homes and public places, is catalyzing the whole segment into a never-before-seen growth spree.
Smart phones & 4G services
“The recent war of data and the increasing availability of 4G devices are key developments in the Indian market,” points out Jaipal Singh, an analyst with IDC for India, Sri Lanka and Bangladesh.
Singh believes 2014-15 was a transition phase for the Indian market, as it started to shift from feature phones to smartphones in a big way.
Several Indian brands like Lava and Micromax emerged on the scene. In 2015, Chinese brands became very aggressive on India, finding in their neighbour the third largest market in the world for smartphones, after the US and herself. However, the reality is that both US and China are saturated markets.
Points out Singh: “Even though China is four times the size of the Indian market for smartphones, the Chinese players were struggling with growth there while India was delivering big numbers. So, we can well say that 2016 was the Year of Chinese players like Oppo, Gionee and Lenovo, among others, making a mark. They have now more or less removed the Indian players from the Top 5 smartphone list in the country.”
The Chinese vendors are doing pretty well today, but the growth in the Indian smartphone market is by no means phenomenal. It is growing roughly, at a sedate five per cent.
Singh explains: “Another way of looking at this is to see the level of penetration of smartphones in the Indian market, which is around 35 per cent. Around 136 million feature phones and 109 million smartphones were shipped into India in CY2016. Now, there is craving for phones with bigger screens and bigger cameras.”
Content & Digital Advertising
Mobile content has taken off in a big way in the last two years. While the boom began around 2010, the video shift towards mobile from desktop began in 2015.
Says Lavin Punjabi, co-founder and CEO, mCanvas, said to be India’s first mobile ad platform, which started in 2015. “What advertising companies initially did was to simply ‘copy paste’ the banner ads for the emerging platform, without understanding that doing things for mobile is very different from others. Today, producing snacky content and snacky ads have become the norm. You tube is being watched more on mobile and it is important to be tuned in to that mode.”
Lavin makes a pertinent point. According to him, long form and horizontally viewed content fits for television, but for the mobile, it has to be short form and vertically viewed content. Hence, videos are being made vertically, so that instead of people flipping their phones, they can view the content vertically.
Elaborating further, he says Hotstar has become very popular, especially among the millennials and the middle-aged segments. But, it is an extension of the TV content. There is a need to offer fresh content through non-media sources. Even if it is news, the millennials prefer reading the content in their lingo and with their kind of expressions. Even Facebook offers more videos today than written content.
“Today, any video that takes more than 2-3 seconds to get started, looses the viewer. We need to do a lot more within 8-10 seconds to retain audience,” he says, adding that the Indian mobile advertising industry, estimated to be around Rs 6,000 crore in 2015-16, is expected to touch the Rs 10,000-crore mark by 2020. Primarily mobile handsets and content creators are driving the growth. At present, about 70-80 per cent of video consumption in the digital space is through mobiles. Several content creators and platforms like TVF, Scoop Whoop and Put Chutney, among others, have emerged and they are catering to different set of consumers and also to more specific targeted segments,” explains Lavin.
Over-the-top (OTT) players are leaving no stone unturned to become better at what they are doing. They are experimenting with content to offer something, which is fresh and entertaining.
On the other hand, the consumer is also getting savvy and the market is witnessing the emergence of a new buying trait, where consumers take out subscriptions for a period or to watch a particular show, then drop the subscription, when it no longer suits their needs.
With so many different OTTs to pick from - each offering something slightly different - many consumers are not limiting themselves to one service or provider.
There is also a growing appetite for niche and refreshing content, a demand that is only expected to increase, thereby putting pressure on broadcasters, who in turn have to keep up with increasing competition.
The one fallout from all these synergies is that consumers are now pretty much in the driver’s seat.
The vast availability of low-cost, high value premium content, available on any device at any time, means that they will pick and choose what they want and when they want and service providers will need to innovate in order to adapt to new demand models and the change in consumption behaviour.
OTT players have already started to make their content relevant and technology more convenient to create a loyal consumer base.
For instance, SonyLIV realised the requirement for regional content among audiences and launched a regional language series on their platform to tap the opportunity.
“What has happened in the last 2-3 years, is the increased rate of smartphone penetration, which has multiplied in a very big way with the emergence of several brands and aggressive pushing. Simultaneously, the cost of smartphones too has come down. The availability of bandwidth has increased vastly, along with the availability of 4G devices. Today, there are around 100 million users with broadband and 4G services in India, thanks to the huge rollout of 4G services over the last 12 months. The cost of bandwidth too has dropped. Smartphones have now become the source for entertainment. Consumption is happening in both big cities and small towns, wherever bandwidth and smartphones are available,” says Uday Sodhi, EVP and business head – Digital, Sony Pictures Networks India.
He points out: “There are 3-4 big categories, even though the bulk of it still revolves around television shows. People, who missed a TV show or were travelling, look for the same content on their smartphones. TV content is a big source for providing information and a lot of viewing, thanks to several OTT apps – from movies old & new. Anything from Bollywood and Hollywood and regional, has good demand. Sport is also a very large category.”
As a result of the prevalent demand, he says, people are now creating content in original for the digital space, which is being consumed across segments.
“These are different from Bollywood and TV content. There is no particular genre, which has the focus. While the length of the TV content is for 30 minutes, the content created for digital space is far more targeted and at specific groups and these do not have restrictions, as in television,” adds Sodhi.
The audience base is fairly large, unless a specific content targets a niche audience. “It is not restricted only to youngsters. Hence, original content in local languages has become a big opportunity now. We are leader in this space and have wide and complete offering from films to sports. By creating original content for digital space, we are also the first to create regional content,” he explains.
Content creation and technology platforms
As the audience base gets wider and demand for content increases, niche players are innovating with technology and content to deliver what the audience is looking for. Culture Machine is one such player, which had already made a name for itself by innovating with technology and content.
Founded in 2013, Culture Machine is a digital media company, which builds media brands like Being Indian, a digital channel that offers everything that is Indian, Blush, a lifestyle brand targeted at women, Put Chutney, which has successfully tapped the southern regional audience hungry for regional humour, Viva, a Telugu digital channel, and Awesome Sauce, that brings forth flavours of India with easy-to-make hassle-free recipes.
It combines these with its technology products – Intelligence Machine (IM), which through its rich data-driven insights offers a reliable programming strategy for the company’s various brands and Video Machine (VM), a patent pending product that makes high quality video at scale from any given audio or text source.
“There are around 392 million Internet users in the country and nearly 220 million of them have access to high speed Internet service, backed by 4G smartphones. This has caused an explosion and anybody with high-speed bandwidth and 4G smartphone is hopping on to this bandwagon, leading to a boom in digital content creation, especially regional programming that has grown manifold. The core base is the 18-35 years audience and they are the major consumers of digital video programmes.”
The way forward & challenges
Pitalwalla does not see any challenges but spots only opportunities. “Going forward, I do not see any challenges, but only growth opportunities for this industry. We need to regularly create content for sustaining audience interests and such platforms and fortunately, we are able to do that. We have to keep creating fresh content as more platforms come up.” An ever challenging task that
Predicts Dekkho’s Desai: “It is still early to pitch for revenues from content since only one per cent of it comes from premium content and almost all of our revenues come from digital advertising. This will be the scenario for at least the next two years or so.”
Looking ahead, he believes people will pay for only one or two platforms, the ones that offer the best content.
“We work across 10 genres and already have 12,000 hours of content. Video consumption has grown by 90 per cent in the last 6-9 months, while video advertising is growing by 35 per cent on an annual basis. Dekkho is growing by 200 per cent every month and that may be because of our small base. Our target is to have two million active users in next five months,” says a confident Desai.Even though the growth in the smartphone market is limited at present, IDC’s Singh is confident about the long-term growth story of the Indian market. “I am quite positive about the Indian market growth in the long term. At present, our feature phones account for 55 per cent share, while smartphones account for the balance 45 per cent. Going forward, the trend will get reversed,” he prophesises.