Category: Media

The Economist stands for five values — be forward looking, be a trusted curator of events around the world, do not be a disinterested observer  ( actively advocate change ), be global and practice world-class journalism. Its mission is free trade and internationalization.

According to Chris Stibbs of the Economist, ownership of the media does not matter on a day to day basis. Indirectly, ownership is very critical. The Economist has independent voice which is critical to the five values it espouses. Its organization  is geared to uphold these values. Media should be commercially successful — that gives it commercial independence.  Commercial independence is important for editorial independence. And in its turn, editorial independence breeds commercial success. If there is no commercial success, then ownership independence is at risk and so is the editorial independence.

In the current media environment, if you want to be heard, you must have a uniqueness of voice. A good media brand can make money, but it takes time. Just quality is not enough; there has to be a uniqueness of voice.

It was the advent of Rupert Murdoch’s Star Plus in English followed by MTV, BBC and Prime Sports in 1991 that ended the monopoly of the DD. Immediately, in 1992, Subhash Chandra launched Zee TV. In 1993, Sun TV was launched. By 1994, India had satellite channels such as CNN and Discovery. This led to the need to measure the viewership of the TV channels. A simple diary method of the DD era gave way to INTAM or Indian National Television Audience  Measurement under the auspices of ORG-MARG in 1994. Though INTAM brought credibility to the ratings and analysis, its small size and the limited geographical area covered were the limitations. To overcome this TAM was set up in 1998 as a joint-venture between AC Neilsen and Kantar/IMRB backed ISA and AAAI. Thus there were two measurement systems between 1991 and 2001 — TAM and INTAM which caused confusion. There were allegations of data leakage. To correct this TAM and INTAM were merged into one entity by AC Neilsen and ORG-MARG. In the meantime, TV advertising revenue reached Rs. 4500 in 2004. An application was developed by Decision Craft, US called  aMap with 2000 meters which delivered ratings overnight as compared to a week taken by TAM. aMap was used as PR strategy but media planning still depended upon TAM. aMap disappeared in 2011. There was a dispute between NDTV and TAM, and TAM was assaulted by several broadcasters about its ratings. In 2012, Broadcast Audience Research council ( BARC ) was set up by the Indian Broadcasting Foundation (IBF ), the Indian Society of the Indian Broadcasting Foundation (IBF), the Indian Society of Advertisers (ISA) and the Advertising Agencies Association of India (AAAI). It was the latest attempt to do transparent ratings. BARC released its ratings for the first time in 1995. BARC has 25000 meters, as opposed to 12000 meters of TAM. Many subscribed to both the ratings. In August 2015, BARC and TAM formed a new company — Meter Company — with a robust meter size of 34000 meters.

For 2015, the original forecast for ad spend was Rs. 40,658 crore. It has been revised to Rs. 42,234 crore. TV was slated to grow by 10 per cent. It has been revised to grow by 21 per cent. Print grows by 5 per cent, radio by 6 per cent, cinema by 9 per cent, outdoor by 6 per cent and digital by 29 per cent. The overall growth rate of ad spend across all media is 13.80 per cent. ( Source: Advertising Outlook ).

It has been realized that two TV rating systems are not sustainable as it causes confusion in the industry. Therefore, Broadcast Audience Research Council — BARC and TAM, a joint venture of Nielsen Holdings, US and WPP, UK will form a company to manage the combined meters these two firms have in 32000-odd Indian homes. For the time being, the working title is The Meter Company. There are 32000-34000 panels which would be managed by the Meter Company. The agreement has been reached, and in a few months the company will be operational.

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).

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.

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.

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.

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 ).

To compete with Netflix in Africa, Nasper is focusing on video-on-demand service called ShowMax. It has gone live in South Africa in September, 2015. Nasper intends to tie up with wireless operations to provide service over their networks. Nasper will roll out high speed cable across Africa. Nasper has experience of the Chinese market where online video consumption is absolutely exploding. Nasper is a 100-year old publishing company.