By: Alok Jha, Managing Director, CyberPlat India
The manner in which we consume news and entertainment has transformed radically over the past decade, creating both challenges and opportunities for traditional broadcasters. Thinking about it, Millennials spend more time streaming content than watching it on television, and more than 20 percent of them are viewing shows on their mobile devices. Streaming services are growing rapidly, with around 60 percent of consumers using them monthly. With consumers in the driver’s seat, traditional business models are hitting some speed bumps. Foreseeing this impending revolution, the media & entertainment industry continues to evolve rapidly, with video-on-demand redefining the way people consume content. This year, distributors will look to innovate the way they create, bundle, and disseminate that content, while exploring new revenue models. Many content providers and advertisers are also finding newer ways to reach customers and make content available to them, on their desired platform.
Given the existing scenario, three routes have the potential to unlock media consumption, and imply true opportunity pools that serious media players would need to follow in an intensive manner. These focus areas have higher probability of driving break-out growth for the industry as a whole.
The Digitally Connected Consumer:
The Internet is profoundly changing the way people consume media. Traditional forms of media consumption have been more household or family oriented – with one cable connection or newspaper subscription per household. The rapid penetration of the Internet via mobile phones has now made content consumption an individual activity.
The digital wave creates two kinds of impact – allows media companies to reach a segment of one and makes it possible to spread content faster and across a wider spectrum of audiences. Globally, we have been witness to an explosion in the volume of content created for digital consumption, with the barriers of shelf space being shattered and the possibility of unlimited hours of content.
A shift from traditional content models to technology-driven models is imminent to drive speed and scale in content creation. Digital consumption of media represents a large database of consumption patterns, viewing habits, and consumer content preferences. Leveraging this data intelligently can help content creators customize new content to consumer tastes and preferences and reveal insights into what makes content successful.
Leveraging the Rural Dividend
Rural consumption in recent times has been growing at a faster pace than urban consumption patterns, given the increase in income and literacy levels, the realization of pent-up demand driven by increasing penetration and the willingness of rural consumers to trade-up to latest technologies such as HDTV channels and 4G mobile devices.
Unlike China, ~65% of the Indian population will continue to be concentrated in rural areas, even in 2025. While we are a nation of many cities, media consumption in rural areas is much lower, unlike many other consumption categories. There is no homogeneous market as the consumption pattern and consumer behaviour differs starkly, between both markets.
As smartphones and mobile data become affordable, we expect the number of connected rural consumers to increase to almost 315 mn in 2020, leapfrogging over 30% year-on-year. However, distribution solutions and right monetization models are necessary to drive media penetration at faster rates, thereby unlocking the rural potential. Electricity shortages have partly been responsible for low media consumption in some pockets of rural India, historically. However, Internet connectivity, especially on mobile phones, can overcome this challenge to help catapult rural consumption to urban levels and beyond.
As players think about tapping this prospective space, it is imperative to innovate and pivot the thinking on business models. Players must now think of how they can tap into and monetize the rural consumer and doing so would necessitate re-imagination not re-engineering.
Customized Content Creates Demand
A drastic shift across the board is needed to drive up current media consumption levels, to match global benchmarks. However, not all of India consumes lower volumes of media than our global counterparts. Over the years, some Indian states have typically been high-consumption pockets (Andhra Pradesh, Telangana, Karnataka, Maharashtra, West Bengal, and Tamil Nadu), while others have proven to be characteristically low. Although disparities in electricity supply can account for some of the difference in content consumption, the difference is far larger, spanning more factors.
This disparate pattern of media consumption leads us to ask whether the creation of micro-clusters to target content could unlock growth. The markets that created a large number of local language channels , targeting specific niche segments, across genres like general entertainment, movies, news, kids, youth, etc., have driven the per capita consumption higher than the rest of the Hindi-speaking market. It is the need of the hour for traditional media providers to look at better targeting of communities with niche content and monetization models to sustain growth and revenue.
The growth journey of the Indian media industry has been a long and illustrious one, given that the industry has reinvented itself with changing consumer preferences.
The vision of the industry to grow into a 6700-crore entity in a decade is a bold one, but the direction discussed above, make it an aspirational one. Ecosystem interventions to affect these changes are key to executing this vision successfully. The post-GST phase is likely to bring cheer to various quarters in the industry. Further, as the industry matures into the digital age, improved monetization and measurement will help in the industry gaining a fair value for the vast platform it provides, and enable it to invest in new content and talent.
Before signing off, I would like to say that the ride has just begun, and we should brace ourselves for exciting times ahead!