Month: November 2015

Hungama : Digital Entertainment Company

Shabbir Chunawalla

Hungama is synonymous with music and movies. It has been set up in 1999. It is an online promotions company — a digital media company. It has rich content of 7500 films in 12 languages. They have partnered with 52 different studios. They have 400-odd content partners. To begin with, they started with music and music videos. Here they introduced gamification — on making a playlist, you get the points. These points can be redeemed for digital gifts. In digital entertainment market, Hungama reaches 62 million consumers everyday. By pricing the services, they get a revenue of Rs. 3000-Rs. 3500 crore.

In content consumption, the biggest category is music consumption ( 60 per cent ). It is followed by film and music video ( 40 per cent ). The category that is growing most is video.

The three big pillars in this business are the content, technology and distribution. Hungama is way ahead in content. They have worked hard on technology. There are many devices, and they have to be where the customer is.

Their 97 per cent business comes from subscriptions and consumer purchases. They also do advertising, sponsored programming and create a sort of channel with a brand around it.

Estee Lauder

Shabbir Chunawalla

She was the daughter of East European parents and her parents called her Esty. The world later knew her by the name Estee. John, her chemist uncle, prepared herbal remedies and face creams over the family stove  which later became the basis for the first line products in her Estee Lauder line. She became the goddess of beauty. She set up business in New York, US, and now the products are sold in about 150 countries. Estee Lauder expired in 2004. Leonard. A Lauder, the elder son, inherited the legacy. He is 79 in 2011. As chief executive, he ruled over the company. His younger brother Ronald Lauder established the Clinique brand. William Lauder, son of Leonard , served as CEO, from 2004 to 2009, but stepped aside after an extra-marital relationship was exposed. Freda, an Italian, succeeded him. He as a non-family man, a professional.

In 2010, Estee Lauder posted a sales of $7.8 billion.

Estee Lauder believes in product quality and distribution to elite retailers. Freda made E. Lauder a leaner, faster and more collaborative company. As the Lauders no longer run the show, there is buzz that the company may go to P & G one day. William Lauder denies this.

Politics, Media and Business Relationship

Shabbir Chunawalla

Businessman generally do not express their candid opinion about the budget and the government policies. They do not want to cross the sovereign’s path. Still business is the main source of political funding. It is said that such funding is only for goodwill and has no quid pro quo. If a business seeks special favours,  there is separate payment, but there is no clarity what proportion of such payment is retained by an intermediary and what proportion reaches the party coffers. Businessmen, politicians and bureaucrats have a complex relationship. Bureaucrats have to sign the clearance of the policy favouring business. In practice, political power trumps financial power. Politicians have now realized that businessmen gain far more gain through favourable policy decisions, while they stand to gain very little. This has led to a new phenomenon where politicians enter business. They want a stake in business. Businessmen too have entered politics by joining political parties and becoming parliamentarians. Media power is an essential ingredient in this mix. Both politicians and businessmen would like a friendly media. Business takes over established media to improve its clout. They buy the stake in media. In South, many politicians run the media. Businessmen finance politicians and political parties, and use media ownership as an additional weapon. Media defends them from politicians if there is such a need or can be used to further a political party’s interests. Media thus becomes a handmaiden especially during electioneering.

Google’s Searches through AI

Shabbir Chunawalla

Google keeps investing in AI which it uses for videos, speech, and translation. It has now started using it for searches. This system is called Rank Brain. It converts vast amount of written language into mathematical entities called vectors. This conversion is facilitated by AI. It takes the unfamiliar queries by comparing them to familiar queries. The results are filtered. Hundreds of signals are received by an algorithm before the search results appear. Rank Brain is one such signal, but is a significant signal. Google has made machine learning a transformative process. Facebook too uses AI techniques to filter the newsfeed. Microsoft uses AI to enhance capabilities of its Bling search engine.

Principles of Net Neutrality

Shabbir Chunawalla
  1. ISPs should not hinder the provision of any web site ( except when there is a clear show of harm ) .
  2. No prioritization or throttling of certain data over others.

( No technological form of preferential availability and/ or access ).

3.   No discrimination on the supply-side. Offer certain content or services at comparatively lower costs. Extreme when there are no data charges ( zero rating ).

Net neutrality protects diversity on line — source diversity, exposure diversity.

 

The Economic and Political Weekly (EPW)

Shabbir Chunawalla

In 2016, the Economic and Political Weekly ( EPW ) completes 50 years. It is one of the most respected journals from India. Its earlier version as the Economic Weekly, and its founder was Sachin Chaudhary. In 1960, Dr. K. N. Raj was chosen to join the Weekly and he became editor in 1968. He stayed as editor till he died in 2004. He virtually built the paper. The Weekly published political commentaries and discussion on policy too. All good researchers aspired to be published in the Weekly. A trust called Sameeksha  was formed to ensure the financial viability of the Weekly. A research foundation was established in 2013. When the trust was formed, the name was changed from the Economic Weekly to Economic and Political Weekly. To begin with the Weekly had the leftist leanings. The Weekly became more balanced since the 1980s.

Luxury Brands and Indians

Shabbir Chunawalla

Indian professionals go in for luxury brands by paying through credit cards. Indians are more concerned with the badge value of brands — they are symbols of affluence elsewhere, these brands may be bought for the talk value of experience or manifesting connoisseurship. In the early 20th century, royalty patronized the luxury brands in India. Recently, the number of Indian billionaires has increased. The salaried class is being paid handsomely. There is a market luxury goods at different price points. The spending is uninhibited. The splurge by the Indians is a fact.

Luxury brands tend to be individualistic. When more and more people can afford them, they become fashionable.

Indian retail in luxury brands copes with the problem of the right portfolio of brands and the media to communicate with the customers. They have to expand beyond the metros to realize the full potential of the market. Most cities have high streets dedicated to the marketing of luxury goods, e.g. 5th Avenue, New York, Oxford Street, London and the Champs Elysees, Paris. Such high streets are still not present in India. India still has no large retailers in terms of space of luxury brands. There is a problem of generating awareness of the brands. It is a problem to reach the target audience using the right media. Media like Vogue, Vanity Fair are not available. There is a problem of trained manpower to retail such brands. Many consumers defer luxury shopping till they go abroad.

There is ample scope for many players in the market as the market for exclusive products is growing in width and depth.

Evolution of Luxury Consumer

Luxury products demanded by the masses are sold on the basis of ‘ I am worth it ‘ feeling. This is a premium brand market for the masses. At the other end of the spectrum, certain exclusive high-priced products are sold.

Marketing Luxury

Shabbir Chunawalla

Diamonds are just rocks mined from the bowels of the earth. They have been invested with value by good marketing — showing diamonds in use by the celebrities and royalty, promoting them as an expression of love, and as something that stood the test of time. This is true for Swiss watches and French wines. These products have become what they are today riding the back of successful marketing.

These products symbolize what a luxury brand is. They satisfy the need for self-worth and an aspiration to belong to an exclusive club. They demonstrate sophistication and class. The ownership and gifting of such products have high emotional values. Consumption of such products itself becomes a source of identity. A luxury product is a market of differentiation, e.g. LVMH bag or Cartier watch.

Price premium on luxury brands leads to huge profit margins for most luxury brand companies. A luxury brand’s value lies beyond its core product function. More than 80% of it consists of brand value and the rest is made up with features such as quality, technicality and aesthetics. A luxury product becomes justifiably expensive and is meant for a select few. Luxury is a matter of perception. It is aspirational. A brand has to meet this perception by premium quality. Luxury marketers have to shape the consumer perceptions. Even amongst the select audience of luxury brands, a smaller super niche super elite club can be created. Such elitist bias is shown by creating signature products and by-invitation sale. As many more people can afford luxury brands now, prestige, and exclusivity are created by distance, not necessarily financial, but intellectual and cultural. Ad agencies promote cultural and intellectual distances.

Corporate elite is a good audience for luxury brands. Luxury itself is vulnerable to dynamics of the market place — what is luxury to one is a matter of life-style for another. Luxury brands cannot afford to become common place, and hence have to innovate constantly.

Matching Media and Audience

Shabbir Chunawalla

When we try to match the media and audience, there are comparisons of efficiency. Cost per thousand ( CPM ) is the cost to reach 1000 customers by using a specific medium. It is a measure to compare different vehicles. Indian Readership Survey ( IRS ) data and Audit Bureau of Circulation ( ABC ) data are good input. CPM should be related to relevant audience. There is reliance on GRPs in broadcast media. BARC meters record what the people actually view on the TV. Media show regional differentiation. It is necessary to focus on certain regions considering the market of our product.

There should be a contextual fit, say a demo that requires visuals and sound effects is best suited to TV. There should be product fit — image of the product and media must match. There should be a fit of editorial matter and ad, e.g. a humorous ad would lose punch if placed in a humorous programme.

Sometimes, duplication or multiple exposures are desirable. Sometimes they are a waste. There is overlap of audiences of different vehicles, and some duplication is unavoidable. There should estimation of unduplicated audience of each vehicle. If reach is the objective, we should focus on vehicles with large unduplicated audiences.

As far as possible, the demographic characteristics of the readership or viewership of the media and the target audience of the product must match.

Patents

Shabbir Chunawalla

There are 2,26,339 patent applications pending as of July  31, 2015. On an average, around 43000 patent applications are filed annually. After accounting for those that are withdrawn, around 38000 patent applications need to be examined. The Controller General of Patents and Designs ( CGPOT ) has hired 459 additional patent examiners. The  charge levied for withdrawn of a patent application has been waived.

The time for approving a patent application from current 5-6 years is proposed to be reduced to 15 months and for trademarks from 13 months to just one month.