Month: September 2015

Instagram

Shabbir Chunawalla

Instagram is a photo sharing app with more than 1 billion monthly active users globally. It has an advantage over its rivals as its parent Facebook has a huge volume of consumer data that enables it to do precise targeting in the field of advertising. Instagram’s ad services were previously available in eight countries, and it is making a start in 20 more countries. By the end of September 2015, the ad services will be available in more than 200 countries. Perhaps, users used to ad-free Instagram may resent. Advertisers want to tap a user base of teen agers to young adults. Facebook bought Instagram in 2012. Instagram ad revenue is projected to reach $ 1.5 billion in 2016. Instagram expects to offer a variety of creative options for advertisers in term of layouts and its signature square. Pictures and videos have better design flexibility.

Instagram, as you are aware, is the photo sharing app of Facebook. It has released new features, including creator account. There is opt-in-mode for slow network areas. There is creator studio. There are branded content ads. There is a cultural shift in the way people express and share their interests on Instagram.

There is long term video format such as IGTV designed for long-lasting content and deeper storytelling. It was launched in June 2018. On IGTV platform movie trailers and other digital content is released.

India has 64 million Instagram users (Statista).

Facebook Carousal Ads

Shabbir Chunawalla

Advertising should become mobile friendly. Carousal ads have been introduced in 2014. Such ads carry multiple images and links which a user can swipe through. It gives a viewer a panoramic picture. It is incredibly useful for the brands. The innovation has ‘ scroll ‘ functionality. It enhances the click through rate. It reduces the advertiser’s cost per install.

YouTube Revenue Leakage

Shabbir Chunawalla

Content creators like The Viral Fever ( TVF ) or ACL India Bakchod ( AIB ) have been making advertising deals independently for their content and not through Google ad sales. YouTube has a subscriber base of a billion people. It is exposed to this revenue leakage. It has now asked content creators not to directly tie up with advertisers. A person uploading a video has to declare now all commercial tie-ups. Content creators were violating the guidelines. Still YouTube allowed it in view of the huge traffic content creators like TVF and AIR drove to YouTube. That helped YouTube to acquire advertisers. YouTube makes $ 7-$8 billion globally. Their problem is not revenue but the dearth of content creators. They are now investing in content creators. Online video space is growing rapidly on the advertising side.

Paid Tweets

Shabbir Chunawalla

Advertisers are chasing the audiences who will ultimately buy their goods and services. There are celebrity twitters. They have a huge number of followers. The concept of paid tweets is fast picking up. Several actors, socialites and sports people charge anywhere between Rs.1 lac–Rs. 12 lac per tweet for promoting product launches, new restaurants, TV shows, vacations, weddings and spas. Tweeter as a company does not get any share. Several companies use the platform to promote products. Twitter’s main earnings are through banner ads. Data licensing is another source of revenue. As Twitter’s finances are under stress, it is just a matter of time before it finds a way to monetize this activity.

ErosNow — Online Video Service

Shabbir Chunawalla

Video online by streaming services in a movie crazy Indian market are likely to be highly successful, and soon Netflix and Amazon.com will enter the Indian market. Eros, a Mumbai studio has a catalogue of more than 2000 films, and it has launched its streaming services ErosNow in India, which is optimised for mobile devices and priced rightly for early adoption. Eros releases 70 movies a year. Its movies will be available to stream immediately after they hit theatres. Its basic ad-supported tier is free, while premium services cost Rs. 50-Rs. 100 monthly. Prices outside India are higher. ErosNow has film music section. It faces home grown competition from Balaji Telefilms. Its other competitors are Hooq which has been launched in India with monthly starting packages of Rs.199. In this business the best execution and the best story telling will win. ErosNow is a combination of both. In India, the three big things are  — cricket, religion and movie.

Apple TV

Shabbir Chunawalla

Apple proposes a new version of its Apple TV set top box.Its old version was launched in 2007. It brings video and music from the Internet to a television. It wants to tap the young audience who watch video using online services such as Netflix and Google’s YouTube. Apple wants to tie up with producers who can produce exclusive shows for Apple TV. It wants to obtain premium content for a live TV service. Apple might fund programming. It has taken steps into video production. It support games and apps made by third party software developers. Developers can now write for a 40 inch screen.

Apple TV still lacks a bundle of TV programmes. TV broadcast and digital rights are incredibly complicated. It is tougher than films. There is snarl of contracts and agreements. Apple TV requires TV shows to succeed, especially live sports. In TV shows there are local affiliates with which a broadcaster will have to negotiate for rights to some shows. Digital rights could be held by multiple parties for a single show. Companies such as Apple must wait till these contracts expire. There are distributors whose agreements must expire. The deals are to be negotiated afresh in different countries. A decade ago, there were no templates available for digital deals. There were no complexities such as streaming rights and union negotiations. These templates are now available, and the rights to content can be obtained. The price tag is, however, huge. When Apple bargained for iTunes with the music companies, the bargaining position of music companies was weak. However, the bargaining position of the TV world is strong. As many in the US watch TV via broadband, there is no urgency to do contract with Apple.

Apps can be used to bypass some of these rights issues and high costs. Apple is spared the negotiations for content if a local broadcaster with rights to the shows builds an app. App-centric mobile devices may overtake traditional TV. For the time being, YouTube Stars and shopping apps are not enough for Apple TV. Traditional programming is still the holy grail.

Fitness Bands — Wearable Technology

Shabbir Chunawalla

Fitness bands are a part of wearable technology. Basically, they are fitness trackers which manage physical activity, and calorie intake so as to keep you in shape. It is a significant opportunity to device makers. Many other issues can be monitored — the steps, the sleep pattern the calorie consumption.

The devices are in sync with the smart phones apps and web sites.

Fitbit from California has been introduced in India. It monitors heart rate with the help of a sensor at the back. It costs Rs. 12000 plus. Xiami Mi Band tracks sleep, counts steps. It is available at an affordable price of Rs.999. YuFit is similar to MiBand but has an OLED screen. It also costs Rs.999. GOQii Band cost Rs. 3000. Fitgen Trek supports both iOS and Android and costs Rs. 5999. Garmin Vivosmart provides vibration alerts in sync with a smart phone. It costs Rs. 10990. Intex too has forayed into this market. Watchmakers like Timex have entered the market. The market leader is Fitbit. Apple is within the striking distance of Fitbit.

Designs have now become sleek and trendy. The market is showing robust growth.

Coursera

Shabbir Chunawalla

Coursera is the US-based online education provider. It is the best platform to learn online. They source their content from the best universities. It enriches the video-taped lectures by interactive segments, discussion forums, peer grading, pop quizzes and other features. These courses can be accessed on mobile devices too. They offer specializations to those who want to go deeper into a particular topic. It is a real world project co-developed with the corporates. Majority of courses are in English, but they offer courses in 30-plus languages. Specifically for India, they will translate some of the courses in Hindi. Some content will be sourced from Indian universities and institutes too. These will be customized content for the Indian users. A group of volunteers called the Global Translator Community  (GTC ) work together to translate the favourite Coursera courses into their native languages. Most users are career professionals. Indian users aim to enhance their academic path. Courses are available on the most in-demand jobs and skills. In India, the three most preferred courses are — machine learning, programming and algorithms. The courses are free, but a learner pays if he/she wants a certificate of credentials on completion of the course. Employers recognize the value of these certificates.

Online Video

Shabbir Chunawalla

Hotstar is Star India’s mobile TV app. Hooq followed in tie up with Sony. Netflix will appear in India in 2016. Eros has launched ErosNow, an online video service. Viacom18 proposes a service by the year end — 2015. These online video services are called over-the-top ( OTT ) services. India has 100 million viewers, and is a big market for such services. Its revenue currently stands at Rs. 1200 crore, but is likely to rise to Rs. 4000-5000 crore. It is a market in the take off stage, with 300 million Internet users, and 970 million mobile connections. The launch of 4G will further boost up the market. Zee runs Ditto TV. OTT will contribute 50 per cent revenues to the media companies. It is a challenge to YouTube. All big TV broadcasters have featured on YouTube. They are now venturing on their own. Still, they can continue to be on platforms such as YouTube. There could be two parallel ecosystems in the video industry — they either co-exist or collide. Whether subscription-based model will work in India with cable prices so low is a moot point. That makes advertising the major source of revenue. Online video’s advertising rates have already gone up. There should be a mechanism to tap small recurring payments. It is to be seen whether aggregators are favoured more than the content providers.

Digital Entertainment

Shabbir Chunawalla

According to Ficci-KPMG report on M&E industry, India is the world’s fastest growing smartphone market. The digital video market currently stands at a little more than 15 per cent of the total digital advertising market — and both are growing rapidly. Mobile video entertainment space has seen many players. There are digital streaming operations in the form of a over-the-top ( OTT ) service. Hotstar is an example of video streaming app from Star network. We are likely to see more and more branded OTT services. They do the digital premieres of new movies too. Digital entertainment also gives a chance to own the IPRs. They can generate their own different content. In the US, Hulu and Netflix are very popular.

India’s OTT sector is nascent, but the market for online video consumption is expanding rapidly. In 2015, three OTT video platforms have been launched. These platforms will adopt either an advertising driven model or subscription and ad supported model. Advertising will be on a selective basis. It is important to keep the medium clutter-free. Advertising will have to be integrated to what they are presenting on a case-by-case basis. There will be special non-TV campaigns to strengthen the engagement with the customers.

India is still not a subscription-led market, as here the cable rates are the lowest. As it is the consumer already pays for internet access. Why the same consumer again will pay for the content? Yes, in future, content can be monetised imaginatively. You can allow a consumer to order on outfit a heroine in digital content is wearing.

In video ads, the components are in-video ads ( 10 per cent ), true- view ads (15 per cent ) and standard in-stream ads, which are pre-roll, mid-rolls and post-rolls ( 75 per cent ).