Films and digital both have their plus and minus points. Digital’s greatest plus point is its cost effectiveness. Filmmaking was eponymous with large canisters. These are a matter of a gone-by time. No cans with stickers are being taken from one location to another. It is a card. It is a code. It allows cinematographers to shoot in a higher definition, letting viewers take in more of the amazing work in set design. There is a shift to digital editing too. Formerly films were edited with a scissor in hand, snipping and slicing film together. Some elements of digital like 3 D are great if the film warrants it. Virtual reality has got traction in the West. If digital helps the storytelling, it must be harnessed. India is a land of emotional content and so computer graphics is widely used. Even film distribution has been impacted by digital.
Month: October 2016
Background Music
Background music was played even before the recorded dialogues entered the movies. The technology to sync sound and film has not developed. Lumiere Brothers silent movie in 1895 had a live orchestra, and this system continued for several years. Owing to efforts of RCA and Warner Bros, film and sound synchronization became possible. It was since 1908 that we could have the sound and pic in sync. Many movies were produced with Charlie Chaplin and Laurel and Hardy which were without dialogues but had background music.
Background music underlines the emotions and creates mood. Cartoon movies used music and sound to create impact, but they had no dialogues.
Jazz singer ( 1927 ) in the USA and Alam Ara ( 1931 ) in India were the first talkies. The dialogues, thereafter, occupied the centrestage. The live music made way for background music.
India is the only country whose hero-heroines sing on the screen. Abroad, you hear songs in only musicals. The songs are included only as background. The characters do not lip sync a song, except the characters in a musical such as Singing in the Rain or West Side Story. Songs and dances are an integral part of Indian movies. Therefore, a music director in Indian movies is one who composes songs. Abroad, a music director is one who gives background music.
A music director must understand film making to music creatively in a film. Similarly, a director must understand music to use it strategically in the film. In the 1960s, directors were driving the films. They employed competent technicians. Directors used to value background music and sound.
In the 1970s, the film industry became glamourous and capital intensive. It attracted money bags to film making, who did not understand the art of film making. The focus shifted from the directors to the stars. The audiences too got attracted by superstars and flimsy dances. Films were commercialised. In this scenario, the background music too lost its significance. Even editing and camera work took a backseat. Background music must be done at economical rates. They started using stock music as background music. It was economical and time saving. However, it became stereotyped and monotonous.
ALT Balaji
ALT stands for alternative, and Balaji has set up this as a subscription-driven video-on-demand service. It is on the lines of Netflix and Ditto TV. Balaji is building a slate of 6-8 films a year and about 200-300 hours of original programming for ALT. Balaji makes 1200 hours of programming for TV every year. Against that, 200-300 hours, for ALT is very small. But Balaji will own the IP for all programming. IP is a trigger for scale globally. ALT content can be monetised across platforms. It expects the online business to be bigger than TV and films in five years.
OTT Platforms
OTT platforms operating in India are SonyLiv, NextGTV, Hotstar, Ditto TV, ErosNow, Netflix. Voot and Alt are upcoming.
All these platforms offer Video on Demand ( VoD ). They have to build a library of local content for the viewers at affordable price. In addition, they should provide international content. They have to maintain a balance between quality and price. The premium content can be monetised at higher price point within the subscriber Video on Demand ( SVoD ) model.
In India, VoD players have advertisement-backed and subscription-based revenue models. Ad rates for VoD are one-tenth of those for live TV. Therefore, cost recovery is a challenge. Subscription-based models have to face the unwillingness of subscribers to pay . Freemium model may work — free content on ad-funded models and premium content on subscription. Vuclip practises this model.
Video consumption in India is through telecom networks, rather than through WiFi. However, this is short form video.
Whether we will consume long form video on telecom networks is to be seen.
Content creation eco-system is evolving, e.g. # Fame, TVF, Culture Machine. They create edgy and irreverent content for social media audience.
India is fond of downloading rather than streaming. However,this is likely to change.
Today, TV rules, but it is to be seen by appointment. OTT is convenient in terms of time and the choice of genre.
Sticky Content
There are TV shows both fictional and non-fictional which run for a long time, say in some cases several years. Such shows have to keep its loyal audience intact and attract new audience as it goes along. This is stickiness of content. If the show falters while doing so it becomes unsticky. A lot of time is devoted to developing characters to drive stickiness. Storytelling should be good too. Refreshing the content regularly is a key. The fundamentals are kept the same, and the execution keeps changing. The element of audience fatigue makes this challenging. A spike can be effected by taking a time leap, or by killing a popular character or by introducing an important new character. Spikes are instruments to enhance a story. However, there should not be over-reliance on these as they may damage a story as well.
Nonfiction shows run over seasons. There are innovations in terms of the host, tasks, contestants and audience engagement. However, here stickiness is not so easy. The shows take seasonal breaks, get consumer insights, and refresh the format.There has to be a balance between the old and new format.
Stickiness is the business of content curation. It is a continuous process. Audience feedback helps. If the foundation is strong, there is scope for experimentation making the show sustainable for a longer the show duration.
These days shows are wrapped up very fast.
Programmatic Buying
In the UK, programmatic buying accounts for more than 70 per cent of the display media marketplace. The total programmatic spend in India is less than 10 per cent and online video in particular is growing fast. At present, programmatic has not affected TV and out-of-home.
It is to be noted that people are more important. Technology, it is believed, will reduce the dependence on humans, but in reality the opposite is true Machines can wreak havoc on marketer’s strategy. There are a number of factors to be balanced, e.g. performance, media quality, environment suitability and regulatory restrictions. Constant human supervision is still necessary before machines take over fully. Programmatic media marketplaces are completely unregulated, unlike financial markets which are highly regulated. There is fraudulent activity in programmatic eco-system. Consumer is still the king. There is antipathy to commercial advertising and there is lot of ad blocking. At present ad blocking in India is negligible. There should not be an advancement in ad technology at the expense of consumer experience.
BookMyShow (BMS)
BockMyShow ( BMS ) is online movie and event ticketing platform owned by Bigtree Entertainment. It is expanding in international markets too. It earns its revenues from convenience fee on online sale of tickets, commission from concerts and events, commission from concerts and events, sale of advertising space and marketing, its call centre business and revenue from sale and maintenance of software. At present, the advertising is related to movie marketing and film advertising. It plans to go beyond movies. It will offer branded content. It is focussed on data analytics and expects the website to look like a magazine. Content will make advertising a significant revenue source. In international markets, its services are at present available in Bangladesh, Indonesia, New Zealand and the UAE. It has plans to launch the content in Sri Lanka. It has also launched its mobile wallet. The online ticketing market is only 15 per cent of the total movie ticketing market, in India. ( which is worth $ 2 billion with a growth rate of 10 per cent annum ).
Paytm also proposes to enter this market. The success could be attributed to two factors — who offers the most comprehensive portfolio of theatres and who offers a better deal. There are 550 multiplex properties run by 90 chains and 2500 single screen properties.
Media Buying
India is buyers market. In 2015, the ad spend was Rs. 47,500 crore. A bulk of this passed through the hands of seven large communications group — WPP, Publicis, Interpublic, Omnicom, Dentsu, Madison and Havas. Each of them is vertically and horizontally integrated. Together, they have a stranglehold over the biggest advertisers. For instance, WPP owns JWT, O & M, Group M, Mindshare, and dozens of firms in design, advertising and so on.
On the sellers’ side, there are more than 800 news channels, over 1 lac publications, thousands of web sites. It is a fragmented hyper-competitive mess.
In the US, there are accusations that media suppliers, that is, print, TV and digital pay rebates to agencies, or affliated firms which are not passed on to the advertiser. In India, there are stories of corruption in media buying. It is routine for planners or buyers to demand and get anything.
Streaming Music
Music is bought by streaming it. Generally music is provided at $10 a month or at this times nothing. Amazon and Pandora Media introduce new versions of streaming services, charging as little as $ 5 a month. This will put pressure on existing players Spotify and Apple Music. When Apple iTune store opened in 2003, it charged 99 cents for song downloads. However, even $ 10 a month or $ 120 a year is too high for casual listeners. In the US, the average customer now pays for recorded music on CDs etc. about $ 67 in 2016, up from $55 in 2015 but down from $ 80 in 1999.
The streaming market is divided between internet radio services like Pandora which offer songs tailored to listeners’ tastes but offer no choice to listen exactly what they want and the so-called on demand services like Spotify and Apple Music, which let the users pick specific songs and create playlists.
Streaming Music Digital Firms
According to a Ficci-KPMG report, the size of music industry which stood at Rs. 1080 crore in 2015 is expected to grow to Rs. 2060 crore by 2020. Of the total revenues earned by music industry, 55 per cent is accounted for by the streaming apps, and the rest by sale of music rights to FM radio, live events etc. The largest chunk of revenue ( 80-90 per cent ) is accounted for by advertising. Ad on music apps such as Gaana or Hungama are either an image or video, and is charged at the rate of Rs 150-250 per thousand impressions ( CMP ). The cost of roadblock advertising ranges between Rs. 2.5-3.5 lac per day. A roadblock advertiser runs the campaign along multiple placements on the app for the whole day. For audio advertisements, music streaming apps sign long term deals for a month with advertisers who pay Rs. 2.5 lac for a month.
Paid subscribers of the apps are few. Of the total user base of Gaana, only 1 per cent are the paid subscribers but still they generate a revenue to the extent of 20 per cent. In order to increase their contribution, the apps are trying to improve their paid subscriber user base, say from 1 per cent to 5 per cent.
Digital music firms which offer streaming music are also trying to create original content so as to build a loyal customer base. This has become necessary as international player Spotify is entering the Indian market with a huge music library of 30 million songs. Original content will help in bringing new users. However, it will increase the operating costs.
Another revenue stream could be access revenue. Here a particular music app becomes a default app on user’s phone by an arrangement with a telecom company who agrees to share revenue with the music firm.
Spotify
This is a Swedish music streaming company. It works on two models — subscriptions and advertising. In India, the company relies only on advertising, and has opened its app to mass brands with focus on segments such as FMCG, retail, lifestyle and entertainment. In global markets, there are many who listen to music on subscriptions — about 54 per cent users are on ad supported model globally. It operates in 79 markets. It has 248 million users of which the subscribers are 113 million. As YouTube is available here for free, it is difficult to persuade the audience here to pay for music.
YouTube
YouTube is the original digital video destination. It has tried to improve the user experience by introducing YouTube offline. Over 50 per cent of YouTube consumption comes from mobile phones. The quality of telecom network, therefore, counts. YouTube today is a part of every major campaign in the country. The TrueView and format is a win-win for everyone. It makes the campaign measurable.
YouTube watch time in India has grown. Most audience on YouTube is in the age group of 15-35. Over 40 per cent is female. The consumption of language content in the South is growing.
Many OTT players pull out content from YouTube.
Amazon is planning Prime Video in India.
They have not yet launched YouTube Red in India.