MEDIA SCOPE
India’s is the largest producer of films in the world. It is the world’s second largest TV home and internet market. It is, arguably, the most entertainment-crazy market.
It remains, however, one of the most under-monetised media markets globally. In films Hollywood makes almost thirteen times the box office revenues for less than half as many films. In TV margins in India are half or less than that of smaller firms in China or Brazil. Except for television, where there is some scale, India’s ~126,210 crore media and entertainment is a fragmented mess. Most firms have no pricing power either with advertisers or with consumers. More than three-fourths of all advertising in India is controlled by five global firms which take great pleasure in beating down rates. And subscription revenues, though collected, never reach content and broadcast firms because they leak out. Little wonder then that some of the biggest media firms such as Comcast or Liberty Global have avoided India. Others such as Disney have chosen to prune down their India business in the face of the monetisation challenge.
There are signs of the growth of an ecosystem that could change this. About a dozen emerging companies offer products and services in areas that help improve monetisation — either by improving ad yields, leveraging content and its potential revenue streams or by making pay revenues a reality. Here is a completely random sample of three.
Dream Theatre, set up in 2009, helps media brands leverage their earnings with consumer products. Dream Theatre co-founder Jiggy George points to one of the largest media firms in the world, the $55-billion Walt Disney Company. It gets $4.8 billion or just over 8 per cent per cent of its revenues from consumer products. In India Green Gold Animation’s best revenue spinners are Chhota Bheem towels, T-shirts, watches, games et al. There is a potentially billion-dollar market in extending characters to things. It has not been fully explored in India for many reasons including piracy. Now there are about half a dozen independent firms like Dream Theatre helping larger ones such as Disney India, Bennett, Coleman and Viacom18 to leverage their brands.
Then there is Kwan, “a marketplace for popular culture”, as co-founder Anirban Blah describes it. Kwan doesn’t just represent 115 talented people like Pritam, Vir Das, Ranbir Kapoor and Deepika Padukone; it is an aggregator of talent, information and creative prowess of sorts. So among other things the 2009-born Kwan helped seed Saavn and Phantom Films. It had a role to play in 50 films, 60 TV shows and 20 web series in the last year. It curated 1,500 live performances and established 2,500 partnerships between brands and people in the sports/entertainment ecosystem. With over 140 people on board, it brings the rigour of consulting to the amorphous area of how best to leverage the soft power of celebrity, sports or other talent. In the process it adds to or creates new revenues streams — it claims to generate/catalyse $500 million (a little over ~3,200 crore) in business annually.
There is also SureWaves. In 2011 the Bengaluru-based firm launched a product to aggregate ad space on local cable channels. It worked with national advertisers who wanted the flexibility of local advertising on television which typically cover a region, a state or a country. This created a revenue stream for broadcasters and small cable firms. Earlier this year SureWaves launched Skynet, a platform that tries to bring programmatic to TV. Programmatic is used widely online. It is the placing of ads by a software in real time on websites — for example if an IPL match is trending on Hotstar, an advertiser can bid for and buy inventory in real time. The idea behind Skynet, says Rajendra Khare, founder, SureWaves, is to get hundreds of small advertisers and broadcasters together. The big advertisers use media agencies and the big broadcasters do annual contracts or season deals. Skynet could potentially unlock the revenues in the long tail of TV advertising.
Finally, there is consulting firm Ormax Media which, among many things, does script-testing to help reduce the risk in film and TV among others. The ecosystem that could unlock the real value in Indian media is being built brick by brick.