Tag: PwC

TRAI assuages broadcaster fears of NTO review consultation paper at VBS 2019

MUMBAI: Assuaging fears of media broadcasters, TRAI advisor (Broadcasting and Cable) Arvind Kumar today said at the Video and Broadband Summit (VBS) 2019 that the new consultation paper on broadcast tariffs is only seeking to address some infirmities in the earlier New Tariff Order (NTO) and will not bring any fundamental changes to the regulatory framework.

“Broadcasters should rest assured that the new consultation paper will not seek to decide their channel prices. The only objective of the new consultation paper is to open a debate on how the NTO is impacting the industry and to address some of the infirmities in the NTO,” Kumar said.

Rejecting industry criticism of floating a consultation paper within months of February NTO, described by many as one of the most fundamental reform in Indian media broadcast industry, Kumar said that serving the interests of the consumers is at the heart of new consultation paper.

“Consumer interest cannot be ignored in the name of regulatory certainties,” he said, adding as a regulatory body maximization of revenues is not the only objective of TRAI and serving the interests of consumers comes first to TRAI.

Commending the fundamental changes brought forward by the NTO, Kumar said that the order has brough transparency to the media broadcast industry.

“Main objective of the industry was transparency and to create a level-playing field for everyone. NTO has empowered the consumer by giving him choice,” he said at VBS 2019, being held today at Hyatt Regency.

Further, the new system has harmonized the business processes, Kumar said as he commended the industry leaders for successfully transiting to post NTO environment.

The much-anticipated VBS 2019 will is being held today in Mumbai with participation from prominent media networks, broadcast distributors, media and advertising agencies, consultancy services, OTT platforms, media monitoring firms, as well as government regulatory bodies.

Among the prominent media networks who will be participating in the summit are Sony Pictures Network, Star India, 9x Media, Enterr10 TV, BBC Global News, IN10 Media, Shemaroo and Zee. From the distributors side DEN Network, Maharashtra Cable Operators Federation, Fastway Transmissions, GTPL Hathway, Tata Sky, SITI Networks, UCN Cable and Ashwini Cable will be participating in the one-day summit at Hyatt Regency, Mumbai.

Representatives of India’s prominent media agencies like IndiaCast Media, MediaKind, The Remediation Company, IndusInd Media and Communication, One Take Media, Madison Media will be participating in the event held in the shadows of TRAI’s February 2019 New Tariff Order (NTO) and amidst expectations and fears of further changes to the months-old act, described by many as one of the most significant reform in Indian media broadcast industry.

There will be representation from auditing firms like PwC and KPMG as well. Since broadband service providers are now key to video distribution, there will also be representation from Google, Reliance Jio Fiber, Reliance Jio and Win Broadband.

December 11, 2019
English biz news genre exhibits drop in TV viewership, growth on digital platforms

MUMBAI: Despite all the hullabaloo about digital cannibalising TV, the rapid rise of digital platforms hasn’t had a negative impact on traditional news viewing for now. In fact, the two consumption modes have complemented each other, enhancing the reach of content and news pieces to an ever wider audience. This trend, however, does not seem to hold true for English business news. While the viewership of the genre is increasing on digital, that on TV seems to have taken a hit in the recent past.

Comparing viewership data for the top three channels in the past one year, it is not difficult to spot this difference. The leader in the genre, CNBC TV18, had 654 impressions ‘000 in week 4 in 2018 compared to 339 impressions ‘000 for the corresponding period in 2019. ET Now saw a dip from 608 impressions ‘000 to 155 impressions ‘000 in January 2019. BTVI too wasn't exempt from this trend, showcasing a viewership drop from 110 impressions ‘000 to 52 impressions ‘000.

According to BARC data, the core audience for the English business news channel is All India (U+R): NCCS AB: Males 22+ Individuals. CNBC TV18 has witnessed a drop of 39 per cent viewership among its core audience within a time frame of 15 weeks, starting week 40 2018 to week 2 2019. CNBC TV18 accounts for 65 per cent of the genre viewership. If we consider CNBC TV18 Prime HD, the viewership share goes up to 70 per cent.

On the other hand, CNBC TV18 seems to be gaining quite a bit of traction on YouTube. The channel's total subscribers on YouTube are 285,867; it gained around 18,000 subscribers and was watched for 14.7 million minutes in December 2018.

Commenting on the growth of business news on digital media, PwC MD risk assurance- media and entertainment Anand Punmiya said, “If we analyse TV English business news viewership data for past one year it appears that spike and downtrend are clearly event driven. However, on an average the TV viewership impressions were in the range of 500-600 and there was a marginal fall when news became available on digital platforms. It may not be apt to state that viewers have moved from TV to digital platform with respect to English business news, both platforms continue to have their own significance and convenience of use.”

Urban India is ahead when it comes to consuming news on digital mediums but it is mainly headlines. However, for analysis, views or opinions, the preferred option is always a news channel or newspaper. Advertising on digital medium is growing rapidly, though not at the expense of TV revenues.

BTVI claims to have doubled its viewership market share from 10 per cent in December 2018 to 19 per cent in January 2019.

BTVI COO Megha Tata said, “In my opinion, core TG of the genre (22+ Males) is out of home (at their place of work) during the prime time of the genre (8 am to 4 pm). Hence, measuring at home does not give a true picture of genre viewership. Having said that, English business news is a very unstable genre and according to current measurement methods, genre viewership has seen a decline of 18 per cent in CY 2018 as compared to CY 2017. However, BTVI has grown by 19 per cent in the same time period.”

BTVI has built a strong digital ecosystem, its content is available on OTT platforms such as Hotstar, JioTV, YouTube, Sony LIV, ZEE5, and YUPP TV. The channel is available on these platforms both as LIVE stream and VOD.

“Going by our experience, we have seen a huge uptake of business news content on OTT platforms as well as trading apps mentioned above. Clearly, there is a huge market for business content on digital ecosystem. However, we have grown our viewership on linear TV platform as well. Hence, it would be more accurate to say that viewers are getting added as genre consumers on digital platforms and not shifting from TV to digital,” Tata added.

Besides such OTT platforms, large proportion of business news genre viewers actively deal in stock market over various trading platforms. Such trading platforms have relevant set of viewers ready to consume business content on these platforms. Knowing this, BTVI became the only English business news channel to be present on trading apps such as Axis Direct, Kotak Securities, IIFL markets, HDFC Securities and Geojit.

With the general elections just around the corner, it remains to be seen what English business news channels have on offer to woo the audiences. With a tantalising political contest on offer, business news channels would like to seize upon the chance to regain some of the lost momentum with clever and engaging programming.

February 5, 2019
Esports industry expected to reach $3 bn by 2021

MUMBAI: When everything is going online, what’s there to stop sports? With improved internet speed, smartphone penetration, government digital push and highest youth population, Esports in India has the right territory for growth.

In the third edition of Times of India Global Sports Show (GSS) 2018, industry experts came together to discuss about “Unlocking potential: The eSports revolution in India”.

The state of esports industry over the next three to five years is estimated to grow by 5.3 per cent in Asia and 9.4 per cent in Middle East and Africa (ME&A) according to PwC Sports Survey 2018.

Esports is a subculture that is just growing. It is the sport of the new generation. In India, it is played on multiple platforms like Voot, Hotstar, Youtube and Twitch.

Tencent GM Aneesh Arvind said, “Once you have a large enough mass in a region or a country then I would think it’s a matter of time to really become big. The three things we can do from our side to make it really popular are the infrastructure, devices and data where people can play and watch others play.

The recent sensational game made by Tencent Games is PlayerUnknown’s Battleground’s (PUBG) Mobile, which has crossed 100 million downloads.

“We have such a large player base in India that all the assumptions we used to have in the gaming industry doesn’t hold true anymore. We have built the game and the ecosystem around it by doing TV commercials, advertisement in different media, got influencers on board,” Arvind added.

U Sports AVP-brands and partnerships Tushaar Garg said that esports was the first they spotted when they looked for new investment. “The first season of UCypher was to create awareness and created a docu-drama series format. We looked at two thing that is the big massive fan base in terms of demographics as we have a very young population below the age of 35 and biggest smartphone market after the US. We took the most popular title like DOTA, Tekken and Counter-Strike.”

“We packaged UCypher in such a way that the actual user gets tri-fold offering i.e., career, content and community and with that, we also looked at how we can mass-ify it,” Garg added.

Esports for the first time became a part of a major sporting event in 2018 Asian Games Jakarta as a demonstration sports. This was announced by Asian Esports Federation (AESF). 10 Indian gamers qualified for the event.

According to Tencent, Esports is a video game, which is played competitively with rewards attached to it and an ecosystem where people are ready to watch that.

Nodwin Gaming MD Akshat Rathee asked the panel whether it a monetisation time or a growth time for esports in India to which Garg said, “I think for us it is an investment time. As a company which is building IPs we are very clear that for the next 3-5 year time frame we have to invest in the fan base, create the infrastructure getting the right stakeholder and the right federations.”

According to UK-based Juniper Research, the advertising spend will dominate in terms of revenue and spend (accounting for 50 per cent in 2022).

In 2018, the market size of esports is supposed to be $900 million and in 2021 it is likely to reach $3 billion. “We as the esports industry are trying to figure out ways in which we can grow and models of monetisation,” Arvind added.

“We are the only sport in the world which is not run by the federation because the publisher owns the trademark of the game,” Rathee concluded.

December 17, 2018
Esports on the path to be mainstream in India

MUMBAI: The state of sports industry over the next three to five years is estimated to grow by 5.3 per cent in Asia and 9.4 per cent in Middle East and Africa (ME&A) according to PwC Sports Survey 2018. Despite the prediction in Asia and ME&A, globally the industry will witness a drop of 10.2 per cent. This is because the market conditions across the industry are stabilising as it progresses in the transition from traditional to digital media consumption, with sports leaders continuing to predict healthy growth in absolute terms.

Adding to this, PwC head-sports business advisory David Dellea said, “Overall, sports leaders foresee stable market growth driven by persistent media and sponsorship revenues as the business models behind them continue to shift towards digital.”

The report mainly focuses on top 10 sports by growth potential globally; esports is leading the chart this year leaving behind the likes of football. The amount of people around the world who have watched some of the FIFA World Cup this year is 3.4 billion which is nearly half the total world population of 7.6 billion, according to research company GlobalWebIndex. The most watched and followed sports in India, cricket, takes the number 10 position. Overall viewership of Indian Premier League (IPL) across all platforms TV (in-home & out-of-home) and digital in urban + rural audiences was 11.3 billion gross impressions.

Esports economy is estimated to reach $804.9 million in 2018, which is a 29.8 per cent jump y-o-y from 2017. The growth in terms of revenue is expected to reach $1.58 million by 2022, which is 18.4 per cent compound annual growth (CAGR) from 2018. The drivers of this growth are sponsorship ($500 million, 31.7 per cent of overall revenues), followed closely by media rights ($449 million, 28.4 per cent of overall revenue) and streaming advertisers ($316 million, 20 per cent of the overall revenue).

An Indian gaming solutions company and creator of e-sports events, Nodwin gaming head Akshat Rathee said, “Esports is already growing in India. One of the biggest testimonies to a market growth of anything is measured by the number of investments done in it. Fundamentally esports is like a sports media marketing property, it’s like the IPL. It is not measured by the number of teams or by prize pool but by media rights auction.”

The growth in esports economy is substantiated by developments such as publishers (Blizzard Entertainment and Riot Games) introducing franchise leagues, traditional sports (such as the NBA and F1) launching esports competitions and mainstream broadcasters (such as ESPN and Sky Sports) airing esports content over the past year.

Esports federation of India (ESFI) director Lokesh Suji said, “Esports in India has massive potential, which is yet to be tapped. With improved internet speeds, smartphone penetration, government digital push and highest youth population, there is no reason why India will not be one of the superpowers for esports.”

Esports for the first time became a part of a major sporting event in 2018 Asian Games Jakarta as a demonstration sports. This was announced by Asian Esports Federation (AESF). 10 Indian gamers qualified for the event.

“We created history for Indian esports when Tirth Mehta won bronze (Hearthstone) and Karan Manganani was placed 4th (Clash Royale) in Asian Games this year, where esports was a demonstration sport. This is the fuel/trigger point which Indian esports was waiting for, it has boosted the confidence of many people who wanted to get involved in esports but were sitting on the fence (be it the brands, investors, gamers or parents). Gamers who were playing casually have started playing seriously as now they know that they can become esports athletes and build a career in esports,” he added.

In January 2018, Nazara Technologies invested Rs 767.68 million for 55 per cent of equity share capital of Nodwin Gaming, a company engaged in activities pertaining to eSports in India. Nazara Technologies is a mobile games company headquartered in Mumbai, which is engaged in the acquisition of, value addition to and distribution, of mobile games across emerging markets such as India, Middle East, Africa, South East Asia and Latin America.

“The viewership market for Indian esports market is 150 million people. We believe that India in 2022 will contribute close to 20 per cent of the overall revenue. India along with China, America and Germany would be the top four esports watching countries in the world. The drivers of growth will be publishers, better teams and better experience between teams,” Rathee added.

“We need to make the Sachin/Virat of Indian Esports and only then will we have viewership numbers. For that to happen, a lot of work needs to be done at the grassroots level such as skill development and enough opportunities need to be created for an esports athlete to showcase his/her skill not only at the national but also at the international level. Mere participation will not help, we have to win. Any broadcaster who is willing to invest will have to invest in building this sport and if they are only looking at building an event they will eventually fail, which at least we don't want as it will create a wrong precedent,” Suji added.

If we look at the growth rate by market segment over the next 3-5 years, digital media rights contribute 11.5 per cent to the overall pie. Sponsorship and advertising is the next big thing with 5.5 per cent share followed by licensing and merchandising with 4.8 per cent share.

India’s first multi-platform, multi-game esports championship was launched by USports in the name of UCypher. The league tied up with MTV for the television broadcast. UCypher’s ambition is to present a platform to talented gamers that help them achieve their maximum potential as well as shape their career in e-sports leagues.

Many advertisers were part of UCypher in its inaugural season like Amazon, Burger King, Fossil, Gillette, Idea Cellular, Mercedes Benz, Nestle, OPPO, Nivea, Netflix, Philips electronics, P&G, Seagram, United Breweries, Vodafone and Xiaomi technologies to name a few.

Sony Pictures Network India head-digital business Uday Sodhi said, “Esports is an early stage development; it’s just getting popular with the younger TG. We covered Asian games in Jakarta in which esports was a part. This is an interesting category but still a small category as compared to other sports in Asian games. Yes, it is a developing, fast-growing category but will take some time to build a large following in India in the mainstream.”

Another Indian esports company, CobX co-founder and CEO Mujahid Rupani said, “Esport already is in the visibility market considering the number of events, price pools that have come into play. Currently, we are six to seven years behind China, but we have the advantage of acceleration. The main thing is that industry support is lacking in India. Global sponsors, who generally fund esports throughout the world, in India have no budgets. The broadcasters in India are interested in esports and they are talking to people. Right now they are at a stage of doing market analysis. The content demand is so much for broadcasting which is not available.”

“We are watching that space and participating in it. Till the time we don’t have Indian winners and heroes it is very unlikely that the sport will develop. We will continue to look at opportunities to showcase on SonyLiv,” Sodhi added.

Talking about esports being broadcast on sports channels in India, “I think it’s dependent on them and us to go out and see what kind of IP is put in. We are already in conversation with Star and Sony Ten. We also believe there is some regional focus with someone like Sun TV who can pick up regional rights,” Rathee added.

The esports industry is only just picking up in India. Only when it amasses a good amount of fan following or if someone takes up the challenge of building its popularity will there be a speedy growth.

October 9, 2018
PwC predicts global emergence of ‘Convergence 3.0′ as services’ distinctions blur

MUMBAI: PwC’s Global Entertainment and Media Outlook 2018-22 has predicted global revenues are expected to grow with a CAGR of 4.4 per cent from 2017-22 to $ 2.4 trillion in a digitally-driven world where the distinction between print and digital, video games and sports, wireless and fixed internet access, pay TV and over-the-top (OTT), social and traditional media will blur in what has been described as `Convergence 3.0’.

Explaining the new concept, PwC said that `Convergence 3.0’ is redefining the competitive playing field. Differing from earlier waves of convergence, it’s creating an ever-expanding group of “supercompetitors” and specialized, niche brands that are striving to “secure the engagement and spending of increasingly demanding consumers”.

The fastest growth will be in digitally driven segments, with virtual reality leading the way, followed by over-the-top content (OTT). Esports will be the second fastest-growing segment if it were separated from the overall video games and e-sports segment. By contrast, newspapers and magazines will see declines in revenues to 2022.

While the sector is largely dominated by Netflix, Amazon, and Hulu, PwC said SVOD revenue accounted for 79.6 per cent of OTT revenue in 2017 as niche players increasingly make a dent in the overall business.

The potential power of artificial intelligence or AI in E&M is further increased by the opportunity to combine it with other emerging technologies, especially virtual reality and augmented reality. Revenues from VR apps, gaming and video, which were US$3.9bn in 2017, are expected to soar more than fivefold by 2022.

The VR revenue is expected to grow at 40.4 per cent CAGR till 2022 in the 10 key markets including US, Japan, China, South Korea, UK, France, Germany, Russia, Italy, Spain. The revenue will be close to $ 170 million.

Even among the most dynamic segments, there are sharp differences among sub-segments. Although the video games and e-sports segment will grow at an overall CAGR of 7.2 per cent, the e-sports component will leap by 20.6 per cent compounded annually. Conversely, global recorded music is projected to rise at a robust 6.1 per cent CAGR, but three of its sub-components – physical, downloads and ringtones/ringbacks – will see significant declines.

According to Ennèl van Eeden, Global Entertainment & Media Leader, PwC Netherlands: “The story behind the Outlook’s global figures is a near-infinite accumulation of micro-stories, and a dizzying array of different trends, at a territory and segment level. For almost every trend, there’s a counter-trend somewhere among the 15 segments and 53 territories. Also, the pace of change isn’t going to let up: technologies such as artificial intelligence and augmented reality will continue to redefine the battleground. Across all segments, technology is enabling content delivery to become progressively cheaper and more personalised. This heightens the urgency for companies to invest in technologies that will enable them to compete more effectively.”

The global internet advertising revenue is expected to grow with a CAGR of 8.7 per cent from 2017-22 and will be around $ 345 billion, whereas the broadcast TV advertising revenue will grow by CAGR of 2.3 per cent and reach till $180-200 billion.

Smartphone data consumption will see a huge spike and will overtake fixed broadband by 2020, according to the PwC report. Smartphone data consumption will reach around 650,000 billion megabytes with a CAGR of 33.3 per cent from 2017-22. Whereas the fixed broadband data consumption will grow at a CAGR of 18.8 per cent in the same time span and will reach till 500,000 billion MB.

As people continue to change the way they access content across increasingly sophisticated devices, more robust data is required to build a deeper understanding of consumer habits.

Christopher Vollmer, Global Advisory Leader for Entertainment and Media, PwC US, in a statement said: “To succeed in the future that’s taking shape, companies must revisit every aspect of what they do and how they do it. This means going ‘above and beyond’ in how they envision their business, generate revenues, create and organise their capabilities and build and retain trust. And given the pace and scale of change under way, speed is vital. For many companies, the models, assets, practices and capabilities that support their businesses today will simply not be enough in the future. Standing still is not an option.”

Also Read :

India to enter top 10 OTT video markets in 2022: PwC

June 8, 2018
India to enter top 10 OTT video markets in 2022: PwC

MUMBAI: With a steadily increasing demand for online video consumption, India is set to occupy a spot in the top ten (over-the-top) video markets in the world in four years, reported the Times of India quoting a study from global accounting firm PricewaterhouseCoopers (PwC).

The report titled Global Entertainment & Media Outlook 2018-2022 (Outlook) adds that the OTT video market in India is growing at a compound annual growth rate (CAGR) of around 23 per cent.

According to the report, OTT video revenue in India reached Rs 2,019 crore in 2017 and is likely to hit Rs 5,595 crore by 2022.

The report also notes that Indian entertainment and media industry is likely to reach Rs3.5 trillion (Rs353,609 crore) by 2022.

” India is expected to post an impressive growth in the entertainment and media Sector at a CAGR of around 11 percent, over the next five years. This is not only on the back of traditional media, such as TV subscription and advertising, cinema and advertising, expected to post robust growth, but also non-linear media such as OTT, gaming and Internet advertising expected to significantly high growth rates,” PwC India, partner & leader — entertainment & media, Frank D’Souza told Indiantelevision.com

The findings of the PwC study do not come as a surprise given the flurry of activity in the Indian OTT space in the last two years. Global giants Netflix and Amazon Prime Video, local brands like ALTBalaji, and those owned by broadcasters like Star India’s Hotstar, Sony Entertainment Television’s SonyLIV and Zee Entertainment Enterprises Limited’s ZEE5 are all locked in a fierce battle for India’s OTT pie.

Viu India country head Vishal Maheshwari said, “This report shines a great light on the OTT market. Original content will play a major role in the growth of the SVOD segment which projected to reach 81.6% of the total in 2022. If OTT players in India produce high quality content, consumers will likely end up with a handful of different subscriptions. Also, with one of the largest populations of millennials who are looking for quality and relatable alternative entertainment avenues, we believe India will surpass other nations to become the largest contributor to the growth of digital entertainment.”

This intense competition among the Video on Demand(SVoD) platforms was the primary reason behind subscription services generating over 70 per cent of the revenue in 2017. This trend, according to the report, is bound to grow further with SvoD contributing to 79.4% of the total market revenue by 2022.

India, however, did not find place in the top 10 global SVOD countries by revenue last year. However, for countries with the highest SVOD CAGR in 2017, India was on the number three spot after Indonesia and Philippines.

Also Read :

Star India mulls adding VR to PKL 6

Star unveils Re.Imagine Awards for IPL ad campaigns

June 7, 2018
Star India mulls adding VR to PKL 6

MUMBAI: Star India is taking the Indian Premier League (IPL) experience to other sports. After a phenomenal reception for using virtual reality (VR) in IPL 2018, it is diversifying into Pro Kabaddi League (PKL) season six.

Along with VR, wearable technology is another main attraction for PKL. As the next step, wearable devices, artificial intelligence and smart analytics are needed for seamlessly integrating technology with application to guide the next stage of evolution and to ensure higher relevance to human society.

Star India spokesperson said, “We may experiment with wearable technology like catapult devices which helps to measure heart rate, distance run, force extracted. We are actually deploying technology at the back end. We have some bit of artificial intelligence which is powering our analytics on cricket and we may use the same thing on kabaddi as well.”

Hotstar was viewed by 5.5 million viewers in VR in week six of IPL 2018, out of which 30-35 per cent of the viewers watched it live and remaining watched it in highlights. According to the spokesperson, the viewers almost watched 100,000 hours of VR content. For the IPL, it made Hotstar compatible with VR devices giving people the option of 360-degree rotation to get a view of the entire ground. People can even pick the language and camera of their choice for viewing.

PwC India partner and leader, entertainment and media Frank Dsouza said, “VR does provide an enhanced experience which is immersive technology but the thing that people are grappling with is sports a community experience or not. Therefore, in a VR situation, it can be consumed singularly. The question remains, at what scale you are going to implement it.”

With 4K adoption in India being marginal, last mile access is limited. “You need to have the infrastructure and the programming to be able to view on 4K. As we have moved from SD to HD, we can now shift to 4K because the experience has been better in HD. Then the question arrives of pricing,” said the spokesperson.

US’ Fox Sports will be streaming live 4K video from the US Open using 5G wireless technology, with the help of Fox Innovation Lab, Ericsson, Intel, and AT&T.

A pair of Fox cameras will transmit 4K HDR video to a nearby production truck, and then 5G, which provides multi-gigabit speeds with low latency, will be used to get that footage out to viewers. In the future, Fox could use this setup to stream live virtual reality from the US Open.

May 25, 2018
Localised content the way forward for Netflix in India

MUMBAI: Global to local seems to be the key strategy of Netflix to spread its wings in India. ‘Netflix and Chill’ is the popular term across the OTT ecosystem but the number of Indian consumers chilling with Netflix’s high-quality content dwarfs in comparison to users in other markets. However, it is adapting to Indian tastes and modifying its pure international content line-up. Will this shift drive the growth for Netflix?

Netflix launched in India in January 2016 and has since created a niche for itself for high-quality TV series and Hollywood movie content for the English-speaking audience in the country but it is far behind other OTT players in terms of subscribers. Currently, it is the fifth largest player in India, behind players such as Hotstar, Voot and Amazon, according to the Counterpoint Technology Market Research report.

With the rollout of 4G internet services by the top telecom providers, especially Reliance Jio, streaming in India has taken a giant leap forward. In the year 2017, Netflix acquired more subscribers than local cable connections in the US (according to data from Statista and Leichtman Research Group). However, even after spending two years in India, things aren’t quite as rosy for the company as in the US. On average, the Indian consumer would spend around $32 dollar (close to Rs 2200) per year on entertainment, whereas in the US, people spend around $2260 (close to Rs 1.5 lakh) annually, according to global entertainment and media outlook 2017-2021 report by PWC.

How does Netflix aim to take over the minds of India when cable connections give you 100-150 channels at just Rs 1100-200? Netflix subscriptions can vary from Rs 500-800 a month. An annual plan can range from Rs 6000-9600.

Netflix CEO Reed Hastings believes that the amount that an Indian consumer pays for cable services, on a global level, is very low, which keeps the industry smaller than it should be. Speaking at an event, he had said that Netflix’s strategy is to build up local and global content. Though he admitted that Netflix’s rates were higher than cable TV, they were significantly lower than movie tickets and other entertainment experiences. Hastings is aligning the OTT player as competition to the bigger entertainment options and not the idiot box.

So far, Netflix has focussed on pushing its global content such as House of Cards, Orange is the New Black, Master of None, Stranger Things, Narcos and Daredevil to Indian subscribers. While it has made significant progress in adding regional content, it still has a lot of ground to make up.

Now, Netflix sees a potential of adding a massive 100 million Indian customers. According to Hastings, Netflix has around 120 million subscribers in over 190 countries who consume over 140 million hours of TV shows and movies per day, and about 60 million are from the US. However, in the price sensitive market of India, Netflix banks on close to 1.5 million subscribers.

How does Netflix aim to break the ice? The answer is local content. Hence, instead of price, Hasting suggested that Netflix wants to be sensitive to great local stories and content and be able to invest in them. So, the strategy will be to build up the local content that includes regional stories as well.

But will producing local content be enough for Netflix to chill in India? Commenting on the same, PwC partner & leader, media & entertainment Frank D’Souza says, “Growing smartphone and internet penetration across the country has created a wide range of opportunities for OTT players. Focus on creating and producing regional content should be of utmost importance considering the fact that India is a multilingual country. A ‘one size fits all’ approach would not work for the country with over 22 official languages.”

OTT platforms have realised the power that regional content has over the dissected Indian audiences. Amazon Prime was one of the first to take the plunge followed by Zee5, Hotstar, ALTBalaji, Voot, Viu etc.

Netflix recently announced three Indian original productions Ghoul, Leila and Crocodile apart from four productions already under works which include Sacred Games, Selection Day, Again, and Bard of Blood. On Valentine’s Day, Netflix released its first India original Love Per Square Foot by Ronnie Screwvala.

Where the platform is likely to get cold feet is in growing in tier II and III cities and the rural audiences. Commenting on the same, D’Souza says, “These are price sensitive segments of the Indian market. Considering the fact that OTT requires one to incur additional costs like that of internet subscription, it is important for players such as Netflix to have value added services or bundled services to penetrate these markets. Tying up with internet service providers and telecom operators in rural markets would give them an early mover advantage.”

Netflix has one more interesting feature to bet on—sharing the subscription package among people. Many networks limit the number of people who can watch programming at the same time. Netflix allows two to four simultaneous streams per subscription, depending on the plan, and charges more for the higher number of streams. So, the premium plan can be shared among four people or in a family of four.

By focussing on producing more local content from India, Netflix is betting on product over pricing when it comes to adding the next 100 million users. As a part of its future strategies, it should create movies and TV shows that Indians will be ready to die for while also keeping in mind the various languages.

Also Read :

2017: The year OTTs went regional in India

Regional OTT content more than just catch-up TV

Indians among top commute streamers for Netflix

Amazon strikes the balance between bingeing and episodic with ‘Breathe’

February 28, 2018

Guest Column: Invest NOW in Indian TV industry

As per PWC 20^th Annual Global CEO survey, top 5 concerns for entertainment and Media CEOs worldwide are : Changing consumer behaviour, availability of key skills, volatile energy costs, uncertain economic growth and speed of technological change. Despite the concerns as above, nearly 35%global Entertainment and Media CEOs are confident about improvement in global economic growth and in 12-month revenue prospects.

In an absolute contrarian play-out case of India, almost all these factors are weighing in favour of the growth of M&E industry in India. There is therefore every reason for investing in the emerging great Indian M&E story.

Micahel Porter’s five forces analysis is a framework for analyzing the level of competition within an industry and business strategy development. It draws upon industrial organization (IO) economics to derive five forces that determine the competitive intensity and therefore the attractiveness of an industry.Porters Five Forces Analysis throws up an overall high degree of attractiveness for the M&E industry in India:

Competitive rivalry

With the M&E industry being highly fragmented with no single enterprise having large enough share to influence the entire sector along with high fixed costs & highly perishable products, the risk factor here at best is medium.

Threat of new entrants

With involvement of high sunk costs, high capital requirements and access to distribution difficult, at best the risk factor here is low.

Substitute Products

Once again risk factor here is low as Film industry, print media and internet and significant sporting events like World Cup, T20 etc & other cultural events

Bargaining Power of suppliers

Since the number of suppliers is very high which leads to the low bargaining power with them and with an ever increasing number of content providers, risk factor once again is low.

Bargaining Power of customers

Increased globalisation along with consumers’ loyalty towards one channel being less owing to a variety of alternative sources of entertainment being available, this factor can at best have a medium risk attached to it.

Conclusion

In its annual sector forecast for 2017-2021 survey undertaken by PWC across 54 countries, M&E sector is expected to grow at a CAGR of 4.2% which is lower than the projection for the average GDP growth. Lower than the average GDP growth will be for the first time in global markets signalling that the sector may be plateauing in many of these countries.

Unlike such sectoral shrinkage in global markets, in India, M&E sector projected to grow at near 10.5% and TV at 11% plus is far above the projected economy GDP growth rate.

The right time to invest in Indian M&E industry and in Indian TV industry is therefore right now.

(Piyush Sharma, a global tech, media and entrepreneurial leader, created the successful foray of Zee Entertainment in India and globally under the ‘Living’ brand. The views expressed here are of the writer’s and Indiantelevision.com may not subscribe to them.)

September 25, 2017

TVF elevates Gusain as CEO as Kumar steps down

MUMBAI: TVF, a VoD platform which had last year received Rs 660 million investment from Tiger Global Management Llc, has elevated Dhawal Gusain as the CEO. Gusain has taken over the new role from Arunabh Kumar who has decided to step down.

Gusain has been with TVF since 2015 as the COO of the firm. With over a decade of industry experience, Gusain has been in leadership and management roles across various sectors and geographies.

In the past, he has worked with Hindustan Unilever Limited, PwC’s strategy & (formerly Booz & Company) and DropThought (VC-backed Silicon Valley start-up) at various locations in India and the United States.

Gusain has an MBA from Stanford Graduate School of Business and a B-Tech from IIT Kharagpur.

June 16, 2017