Category: Media

Digital journalism start ups could be news aggregators for profit such as InShorts in English and DailyHunt in Hindi and other languages. There are outlets for not-for-profit such as The Wire and Khabar. Apart from aggregators, there are content-based outlets for profit such as The Quint and Scroll. Content-based outlets face direct competition from established legacy titles such as The Times of India, NDTV, Dainik Bhaskar and many others. Aggregators do not face such head-on competition. Their focus is on mobile apps which supplement media organisations own contact with the users. They may face competition from global technology firms. All these news outlets face real competition from the dominant social media firms such as Facebook and technology firms such as Google in respect of audiences and revenues. Their target audiences are decided by the kind of journalism they practise. The Wire is about opinion and comment. The Quint has the young mobile audience as its target. DailyHunt focuses on Indian languages.

All these outlets are heavily dependent on advertising. Digital outlets  practise ‘users first, profits later’ path. It takes anywhere between five to seven years to break even.

In India, in the mid-nineties, media agencies emerged on the scene to address the problem of audience fragmentation. The primary objective was cost saving, which broke the traditional 15 per cent agency commission. Media agencies cornered 12.5 per cent and the creative agencies 2.5 per cent. Clients soon resisted the commission for every ad exposure. As a result, creative agency commission disappeared.

In this decade, the next four years are transformative.  Digital will be a bigger part of the eco-system. Though TV still holds as a major  media vehicle, Netflix accounts for a large bandwidth. Today, in India digital supplements the traditional media. However, very soon brands will be launched and sustained on digital only.

At present, the data is extrapolated audience measurement. In future, social media platforms, a few DTH and OTT players and e-commerce sites will own major chunk of consumer data. Will there be any incentive for the advertisers to pay a commission to the media agencies then? Many advertisers even today work directly with Google.

Advertisers will set up internal programmatic desks for ad placement across all media platforms just to save costs and control data. Traditional TV may also adopt the programmatic.

It is time for the agencies to invent in manpower who can provide relevant solutions. Brands must be made a topic of consumer conversation. A multi-disciplinary team must engage the clients. There should be integrated approach. There should be accountability. There should be investment in data.

Snapdeal has extended site as ad platform to its sellers. On Flipkart, brands and sellers are being advertised. Amazon India accepts sellers advertising. Thus the e-commerce marketplace has turned into a media platform. Consumers spend a lot of time on theses sites. Therefore, these sites have started leveraging them. Moto G4 Plus was exclusively launched on Amazon. Advertising is an alternative revenue stream for e-tailers apart from commissions. Alibaba generates more than 50 per cent of its revenue from advertising. Flipkart receives currently 2.5 to 3 percent of its revenue from advertising. It has launched Brand Story Ads. Snapdeal works on a cost per click model. Pricing is done algorithmically. It uses native advertising.

In the US, Nielsen has already launched Total Audience Ratings which offers a complete view of content and advertising exposed to audiences across screens such as TV, desktop, mobile, OTT etc. This will be launched in many more markets.

There are three major challenges in digital measurement:

• impressions are measured rather than the audience
• most measurements are post-analysis
• digital metrics cannot be compared with TV.

To address these, Nielsen has launched in India Digital Ad Ratings. It is powered by Big Data. The traditional panel-based solution is not used. In future, the focus will shift from collecting data to connecting data in measurement.

Advertising is measured in forms of 3 Rs — reach. resonance and reaction. Digital Ad Ratings reassures reach. It measures and reports the age and gender of consumes overnight on a dashboard. It monitors the performance of a campaign. It ensures all impressions reach the intended audience. A viral video may do nothing for the brand except being an entertainer. Campaign effectiveness is related to fulfilling brand objectives.

The Media and Entertainment ( M & E ) industry would almost double to Rs.2.26 lac crore in the next five years, mainly led by the growth in advertising revenue which is expected to touch Rs.99,400 crore by 2020.

The total advertising revenue of M & E sector was around Rs. 47,5oo crore in 2015, as against Rs. 41,400 crore in 2014, a jump of 14.7 percent. ( FICCI — KPMG joint report ). The overall sector grew by 12.8 percent to Rs. 1.15 lac crore in 2015, as against Rs. 1.02 lac crore of 2014. The M & E industry in India is poised to grow by a CAGR of 14.3 per cent to Rs. 2,260 billion by 2020, led by advertising revenue which is expected to grow to Rs.994 billion at a CAGR of 15.9 percent. The digital advertising would scale up to Rs. 25,500 crore by 2020.

With close to 944 million connections in India, mobile advertising spends are the proverbial pot of gold that every media player is after. Mobile advertising stood at Rs. 900 crore in 2015, and is expected to grow at a CAGR of a staggering 62.5 per cent by 2020.

The over-the-top ( OTT ) platform is fast becoming a relevant advertising medium for brands, and will be a serious revenue stream for the platform owners. The size of the OTT industry currently is Rs.1200 to Rs. 1300 crore, and is set to grow at 40 to 50 per cent mainly on the back of advertising; subscription revenues will scale up eventually.

TV advertising continues to grow. It grew at 17 per cent to touch Rs. 18,130 crore.

Print showed a lower growth at 7.6 per cent in 2015. The subscription  market grew at 8.2 per cent.

Film industry growth was healthy — 9.3 per cent amounting to Rs. 13,820 crore in 2015.

In India, VoD is available by three routes. First, through broadcasters such as Star or Zee. These have captive audience and therefore setting an online platform is easier, both contentwise and marketingwise. It is, however, moot whether audiences will come to them beyond catch-up TV or live events. Second,there are aggregators ( Spuul or Viu ). They are tech-savvy outfits who know how to package video and tag it best. As they lack the ready audiences, their marketing costs are higher. Third, there are players such as Eros, Netflix, Balaji or Amazon who focus on creating content. They have the confidence to replicate this capability for online content. Some start with an existing base, and some anew.

In VoD market, though content is important, packaging it correctly is more important. For instance, some iconic scenes in movies will do better online than the entire movies. There are chances of regional content doing well.

Voot, Viacom 18’s video app launches in March, 2016. It is described as a TV station for the future.

All metrics are growing — device penetration, bandwidth consumption and advertising. The growth is 35-40 per cent. So investors do rush in. India is still underpenetrated, single-TV-home market. The younger generation is moving away from TV. The net is about youth or an urban mass.

It is very difficult to arrest attention of people in this attention deficit economy. Some youngsters set up an online news vehicle ScoopWhoop in 2013 to experiment with ideas how content could be disseminated online. You require a snappier mix of news and entertainment. ScoopWhoop uses a lot of pictures and pithy caption draw our attention to it. The text is less. The stories are original or curated. In the newsroom, the editors and staffers figure out the top stories of the day. There is a software tool that curates what is trending or popular on the social media.There is a filter to decide whether any news has the potential to be shared and easy to consume. The team understands the mix of trending stories, text and video. To scale, they require 40-50 million uniques. That calls for prolific content in different formats. They do so by creating sub-properties such as for women, food, entertainment and others. ScoopWhoop Talkies makes videos. The content is not expensive to produce and so they can scale up. The brand talks to the youngsters. It is the BuzzFeed of India. It has 20 million unique users.

ScoopWhoop can monetise itself by convincing the brands to shift their ad spends to digital. More than 80 percent plus revenue comes from native advertising. Sponsored posts or advertorials are roughly five percent of all content. The site currently charges a flat Rs.1.5 lac for a sponsored article.

Its 65-70 percent of total traffic comes from Facebook. Its 25 percent traffic comes directly. Its app brings six to eight percent traffic. Thus it is highly dependent on social media. This situation is faced by BuzzFeed too.

The days are not far off when huge digital media publishers would emerge, since media consumtion habits in India are changing. The content of ScoopWhoop is consumed off-site on social media. It is distributed content. BuzzFeed who poineered this concept was formed in 2006. Along with Huffington Post or The Guardian, BuzzFeed pursues this model — audience beyond their own website and app.

On Jan 7, 2016, Netflix has gone live in India. It has a deep and broad library of TV series and movies. It wants to build up on its strength. It has introduced a subscription-based model. The three-tier pricing starts with Rs. 500 a month for a basic pack, Rs.650 a month for a standard pack and Rs. 800 a month for a premium pack. The basic plan allows one person to stream, the standard plan extends this to two persons at the same time, and the premium plan allows four people to stream. The 0.5 megabits per second is the minimum broadband connectivity speed whereas the recommended broadband connection speed is 1.5 megabits per second. This is standard definition and is available in Netflix standard plan. DVD quality recommended speed is 3 megabits per second, and HD quality is given by 5 megabits per second. Over 20 megabits speed is for 4K viewing. The premium pack offers HD and ultra HD content. Netflix  prices are higher than the average cable revenue per user. Netflix basic subscription plan is on par with the premium cable or DTH packs. It is to be combined with high data cost internet plan. The concept of net neutrality could collide with the pricing strategy of Netflix. On the content front, to begin with, Netflix offers the best of Hollywood. It will attempt to make the local content in India. It has an eye on talented people with a strong track record and a passion for storytelling. Acquiring rights to local content may not be easy for Netflix. Most popular content here is owned by broadcasters and producers who themselves have set up OTT platforms.

Media witnessed democratisation. It means the ability of consumers to choose ( or reject and redo ) what they want to read, listen, and watch whenever they want it. In the last 15 years, this is the major change seen in the media industry.

Internet converted even ordinary persons into critics and journalists. Through different forums, they are able to express their views. This is the disaggregaton which is good for consumers but has not benefited much the media companies. The offline revenues of media companies are in fact funding this disaggregation which is good for consumers but has not benefited much the media companies. The offline revenues of media companies are in fact funding this disaggregated content online.

Though amateurs and novices contribute, the bulk of traffic online is generated from professional content. More than 3/5th of YouTube’s traffic comes from the videos put up by the large studios.

The sites which has the largest audience fetch greater revenues and best advertising rates. Online media  in this respect is similiar to offline media. However, the big four companies — Google, Facebook, Amazon and Apple — walk away with the bulk of revenues and profits that this medium generates globally. Is this democratic? Not as far as the financials are concerned.