Mobile has a long way to go before claiming the same viewership numbers as TV in India, but it’s the intersection of the two mediums that will epitomize the future of content going forward
BY ALIEFYA VAHANVATY & RAVI BANSAL
Televisions, laptops, tablets, smartphones… there’s almost always one or more of these devices lurking at arms’ length in our world today. But, when it comes to the relative importance of these screens, things they are a’changing.
Recently, a report by Nielsen explored the huge dip in the overall viewership of Television in the US and the rise of the Subscription-based Video on Demand (SVOD) services in the country from the likes of Amazon and Netflix. It was also stated that ‘over 40% of US homes had access to an SVOD service as of November 2014 and 13% of homes boasted multiple streaming services’.
The report also states that though the TV viewership in the US is still very high, overall viewing has declined by 4.6 % year-on-year.
CLOSER HOME
What is the scenario in India? Does the Nielsen report for the US market hold a mirror to the Indian market as well? Is Indian TV also losing viewership to the digital medium? Does the digital medium actually have the numbers to overtake TV in India?
For starters, according to a report by the Internet and Mobile Association of India (IAMAI) and consultancy KPMG titled “India On The Go – Mobile Internet Vision Report 2015”, the total number of Internet users in India is expected to touch 503 million by 2017. It further states that the total number of mobile Internet users is also expected to be at 314 million by 2017, almost double that of the 159 million mark in 2014.
Still, experts say that the digital medium is still growing and is years away from overtaking Television as the primary medium in India. Jehil Thakkar, Head of Media at KPMG, does not believe that TV is losing its audience to smartphones. “The smartphone has yet some time to go before it becomes a serious threat to TV. At this time, it is a complementary screen and its penetration is largely occurring in the younger demographic,” Thakkar states.
According to Debashish Ghosh, CEO – Zee Digital Convergence Limited (ZDCL), “Urban consumers today are increasingly consuming content on the go and on their preferred devices in addition to TV. The issue is not about losing audiences - it’s about being able to cater to consumer needs of on-demand content. Depending on availability of bandwidth or access to free wi-fi zones – more and more anytime, anywhere, consumption is taking place and that is going to be an increasing trend.
However, that does not mean TV will be replaced or lose its audiences. It’s always a matter of consumer choice and preference first and availability of technology or solutions later.”
RIDING THE ‘S’ WAVE
The media and entertainment sector has witnessed a recent boom on Digital because of smartphone penetration and affordable data plans being available to consumers. Nokia Networks’ MBit Index study recently revealed that there was ‘a 74% increase in mobile data traffic generated by both 2G and 3G mobile broadband services at the end of 2014, compared to the beginning of the same year’. In 2014, the 3G services in the country grew by 114%, while 2G services grew by 41%, according to the report. Another key take-away from the study was that there was a substantial increase in smartphone use in 2014, as consumers increasingly migrated to smart devices due to their affordability.
There were around 82 million 3G subscribers in India by the end of 2014 and the number is projected to reach 284 million by the end of 2017 according to the report. Seeing this, it looks like 2G user base in India is observing a decline as more and more customers are expected to migrate from 2G to 3G. The 3G user base in India is rapidly gaining market and is projected to grow at a compound annual growth rate (CAGR) of 61.3% from 2013 to 2017.
Another key point that can be noticed vis-a-vis the spread of digital and mobile in the media and entertainment industry is that according to an Ericsson ConsumerLab study carried out in April-June 2014, Indians spend an average of 3 hours and 11 minutes on their mobile phones every day as compared to 2 hours and 8 minutes spent in front of their TVs.
Social media and chat apps are considered to be the reason why most new users buy a smartphone but 40% mature smartphone users who took part in the study, said their usage is no longer limited to social purposes. “We spend an average of over two hours a day on the phone, texting and social networking. With better bandwidth, consumption of videos is also increasing and hence the exposure and alignment towards new age content which is fresh, entertaining, touches a chord and is being loved by the youth. This kind of content certainly has a lot of potential going forward,” says Ghosh of ZDCL.
CONTENT IN COMMAND
With such a surge in the number of mobile internet users in India, the media and entertainment sector too witnessed a shift with specialized applications being developed to cater the need of this huge population. Deloitte’s ‘TMT Predictions 2015’ stated that at least 9 billion apps will be downloaded in India in 2015 and that the total revenues from paid apps are estimated to exceed Rs 15 billion, up from Rs 9 billion in 2014.
Says Ghosh, “Television content is definitely being watched, be it on TV or online. But, appointment viewing is on the decline and people are consuming this same content on-demand - depending on the availability and loyalty towards their preferred OTT platforms. Non-traditional TV video content is also attracting audiences today.”
Capitalizing on this trend and captive audience, Star India launched Hotstar in February this year. At the time, the mobile app was simply the means to an end – to supplement live television coverage of the 2015 Cricket World Cup with videos and live streaming, and some entertainment content.
Star India is now pushing 35,000 hours worth of content from its entertainment, movie and sports channels to the app and with over 25 million downloads so far, Hotstar can be counted as India’s first OTT success on the mobile platform. The app’s acceptance and use have been driven by two factors - it offers cost-free content and technology solutions for bandwidth and content discovery.
Interestingly, Star India did extensive research prior to launching Hotstar to ensure that the content streamed easily on it, even with very low bandwidth. The app development team ensured that Hotstar can run on as many as 7,000 variations of operating systems and screen sizes.
With advertisers from e-commerce, consumer durables, auto, FMCG and handset manufacturers clamouring to pump advertising dollars on the platform, Star India is in an enviable position but does not plan to venture into paid content at present, according to industry sources.
THE PERSONAL TOUCH
A major factor for the popularity of mobile as the screen of choice is the fact that in India, we still have a majority of single-TV homes, and television viewing is not an individual exercise. The mobile phone, on the other hand, is always accessible and has been adopted by the millennials for daily viewing of content.
The rising popularity of apps like Hotstar, Saavn Gaana and Hungama has also given impetus to content creators to develop individualized content for the mobile user.
Local news apps like Pocket, NewsHunt, Cricbuzz and News in Shorts have revolutionized the news app market. Even the Television and Print counterparts of popular digital media have launched their own apps. NDTV, Hindu, TOI, Indian Express, BBC and others all have specialized apps for consumers in India. Apps like Buzzfeed, Scoopwhoop and Dubsmash too cater to the need of millennials.
Within apps, topics and issues can be filtered out in the initial stages according to the user’s interest. That is the USP of the mobile over its predecessor, the TV.
THE BANDWIDTH TO TAKE ON TV
In 2010, the Government auctioned 3G spectrum bandwidth and the telecom operators bid quite aggressively for it. Around 71 spectrum blocks were sold for a whopping Rs 67,000 crore. However, five years down the line, 3G services in the country are still under-utilized, with most smartphone users on 2G services. Meanwhile, telecom companies are still shying away from investing in infrastructure.
However, the telcos do have a valid point to make: Due to competition, the companies have had to shell out huge sums of money to acquire spectrum, and even today they haven’t been able to extract ROI from 3G services. Experts feel that lack of this lynchpin is the single most important factor holding back Mobile from beating TV. It is critical for us to build and invest in telecom infrastructure. “Indian telecom infrastructure is still not geared to support seamless streaming and live TV and until the telecom infrastructure improves, TV will continue to dominate,” feels Jehil Thakkar.
Subho Ray of IAMAI agrees with Thakkar and adds, “With the right impetus on increasing awareness and improving the infrastructure for Internet in India, digital media will surely be the media of choice for marketers and advertisers in the next 5 to 10 years.”
THE TIME IS NOT NOW
When can marketers then depend on digital as THE medium for their advertising and marketing activities with TV coming in at second place? “Not yet,” says Ray. He points out that ad spends on TV stood at Rs 16.9K crore in 2013 and had grown by around 12% to reach Rs 18.9K crore at the end of 2014. However, he conceded that growth of ad spends in the medium had slowed down over the years. “On the other hand, ad spends in Digital grew at a very rapid pace of 30% and reached Rs 3.6K crore by the end of 2014. The IAMAI data indicates that marketers are still looking at TV as the primary medium of advertising because of viewership numbers. It must, however, be said that mobile is gaining traction,” he adds.
On his part, Thakkar adds that there is a shift to a complementary screen for some demographics, because India remains largely a single-TV household country and for those members of the family that have individual viewing preferences, the smartphone is now a great choice. “In that sense, there is a ‘personalization’ of TV viewing that is happening and will continue,” he explains.
Thakkar supports Ray’s view that digital is growing quickly, but is still a small portion of advertising overall. “Don’t confuse growth rate with absolute size. TV advertising is still huge and growing in mid-double digits. TV is also underpenetrated in India so it will be many years before TV becomes secondary to digital,” he adds.
“Given the proliferation of connected devices and audiences and increasing reach of the Internet, the OTT industry is gearing up for potentially exciting times ahead with respect to content and revenues. As Internet access costs start to come down and last mile bandwidths go up, content consumption on-demand will be significantly preferred over linear, especially by the younger audiences. This will definitely not happen immediately – both in terms of revenues and consumption – but the direction is clear,” states Ghosh.
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