India is poised to see interesting models emerge, says Mark Borao, Global Advisory Leader for Media & Entertainment, Ernst & Young
Q] What are some of the trends that you foresee for the near future?
There has been a huge push to look at a transformation toward digital strategy and there are a lot of things that are fuelling it. One of them is the advent of large penetration of multiple devices like mobile or iPads, thus increasing demand for content across markets. Hence, there is a huge consumption of content in the consumer demand that is driving the M&E companies to think how they can get their content supplied and how do they distribute it digitally. So that’s been a topical issue for the past 10 years, but it has been fuelled in the last 18 months.
The other thing is people who are just concerned about the lessons they have learnt in the physical world and how they can translate it into the digital world.
Q] So what are some of the core ideas that help us understand trends better?
When we work with clients, we work on three core areas. The first area is Intellectual Property Management (IPM). This includes contracts, rights and clearances to what you own and rights to export and sell. The reason why it is such a big deal is that now it is a given that if you have physical rights, you have internet distribution rights which is seen in the US in a very big way. So this is an area most clients think about.
When we talk about digital transformation and strategy, the second area is the digital supply chain (DSC). This is again one of the areas that clients tend to also focus on and it is more around distribution.
However, to my surprise, the customer monetisation side is something that is still evolving, and is an area that needs to mature. So really the question that we are asking here is, do you want to have a relationship directly with the consumer? It’s a fair question because if you’re a biggie like Disney or Dreamworks animation where you have a clear brand, I think it’s a relatively straightforward question – do you believe the brand needs that kind of relationship? Take any other M&E company, whether a Universal, Sony Pictures, Paramount or Viacom; it’s quite debatable whether you want or need or establish that kind of a relationship in any sort of meaningful way.
Q] So is there a clear leader in the models or strategies that the clients are working for?
I don’t know if there is one model that is going to be a clear leader. I think what we are seeing in the space is that there are different bets and investments that are being made.
Q] So according to you is the growth coming from distribution revenues or ad spends?
Right now what I see is a model that is tighter. So there is clearly a strong case to be made for an ad-supportive model. Even if today you talk to about advertisers, many of them say it is much commoditised; no – not necessarily. If you can create value for that advertiser, it’s not a commoditised market at all. One of the trends that I see advertisers looking for is the capability for interactivity of content. Thus the thing that we have seen in New York is for example, a concept of non linear digital video ads. Nokia is such one example to have videos on the basis of this concept. It’s a model and a concept that the advertisers really value and so there are really some progressive ideas that are emerging. So there is clearly a baseline around ad supportive, whether it is on mobile or online. Now the question becomes from the view of premium content and how does the monetisation model look beyond premium content and its going to be different with everyone.
Q] What kind of models could work in the Indian market?
There are key unique things about the Indian market, and no one knows it better than our local team here. I am still learning but there are a few things that I have picked up. The first question that you have to work out when you think about a market like India is, what is the size of the market?
Q] What has been global spending in the M&E sector?
The numbers spend for global M&E on models that are offered in digital mediums and other areas are enormous and they are in the range of 65-68 percent. According to me what is driving me it is all of the demand for consumers. Distribution will be one of the areas that need to be focused on because digital distribution is where the investment and the capital that comes down.
Q] You stressing on digital spends but what about television and print?
I don’t see TV going away. This medium is going to keep evolving where a lot of them today have widgets and have access to internet. So what one is going to see is a model that is a TV and ways to have content that will come to the medium via variety of services.
As for print as a medium, in India, the newspaper business is fantastic, which is not the case in the western countries and there are a variety of reasons for that. But I think that as digital and mobile become more popular in India, we will see some interesting models emerging in times to come.
Q] Taking this point further, how promising is India as a market?
Assuming if I am right and if 4G does get enabled, it will help the mobility business get greater access in India, thus growing the market opportunities.
