How two peo­ple built up a new age me­dia net­work and a com­mand­ing dig­i­tal pres­ence

The Brand Reporter - - FRONT PAGE - By Sh­weta Mulki

Back in 2011, two guys who met at Vid­con in the US, got talk­ing about the dig­i­tal me­dia ecosys­tem. It was a meet­ing that re­sulted in the birth of Cul­ture Ma­chine, a me­dia and tech dig­i­tal net­work, two years later.

Founders Sameer Pitalwalla and Venkat Prasad have clocked 15 years col­lec­tively in the video do­main (Pitalwalla at Dis­ney and Times, and Prasad at Google and YouTube, among oth­ers) be­fore set­ting up Cul­ture Ma­chine. Cul­ture Ma­chine’s busi­ness model is cen­tred around me­dia and tech­nol­ogy.

In me­dia, it op­er­ates 715 YouTube chan­nels and owns five brands - Be­ing In­dian (youth en­ter­tain­ment); Blush (a life­style chan­nel for the modern In­dian woman); Put Chut­ney (en­ter­tain­ment and com­edy, Tamil); VIVA (en­ter­tain­ment and com­edy, Tel­ugu) and Awe­some Sauce (food). The av­er­age monthly views for the five chan­nels are 167 mil­lion on face­book and 27.9 mil­lion on YouTube so far.

In tech and data in­tel­li­gence, it has tools that an­a­lyse con­tent (trawl­ing through 2.5-3 bil­lion videos daily) and gauge viewer pref­er­ences to pro­vide video so­lu­tions. Re­cent de­vel­op­ments in­clude a new stu­dio for premium long form con­tent, a con­tent deal with mes­sag­ing ser­vice Hike while Put Chut­ney will go on lin­ear TV via Star Vi­jay. While busi­ness de­vel­op­ment, sales, con­tent is un­der CEO Pitalwalla, Prasad is the CTO/COO look­ing at prod­ucts, en­gi­neer­ing, tech, prod­ucts, fi­nance and an­a­lyt­ics. Edited ex­cerpts from an in­ter­view with the duo:

Go­ing back to your 2013 launch were there any ‘aha mo­ments’.

Sameer: The ‘aha mo­ment’ was built over 10 years. Venkat’s been work­ing on YouTube since it was ac­quired by Google, I’ve been work­ing on it since it en­tered In­dia. We’ve seen the space grow from the pre-iPhone times to iPhone then to YouTube.

Is it re­ally a good thing to be that early in this space?

Sameer: It’s bad to be too early but good to be ar­riv­ing a ‘lit­tle be­fore the guests do’. When we met for the first time, I re­mem­ber us think­ing ‘what would it take to put tech­nol­ogy in ev­ery step of the way - not just for distri­bu­tion and cre­ation - but right down to pro­duc­tion? Tech was ab­so­lutely nec­es­sary to the way we de­signed the com­pany.

Venkat: Ear­lier busi­ness mod­els cen­tred on ta­lent or con­tent ag­gre­ga­tion, but we saw a much quicker way to grow, sim­i­lar to the West, where cer­tain com­pa­nies scaled up quickly and piv­oted to orig­i­nal con­tent or other mod­els. Here, we saw in­no­va­tion hap­pen­ing with distri­bu­tion and per­son­al­i­sa­tion through Face­book and OTT play­ers. But there was no in­no­va­tion up­stream - in con­tent pro­duc­tion it­self - which was in­her­ently not scaleable in the tra­di­tional way. We wanted to use tech­nol­ogy to first personalise, and then pro­duce at scale which led to our tech plat­forms.

Did you see more mar­kets open up as your prod­ucts took shape?

Sameer: While the core tech­nol­ogy helped us scale our own brands, we also re­alised that the tools need not be lim­ited by our phys­i­cal in­fra­struc­ture in terms of con­tent pro­duc­tion be­cause our tech could travel. We be­gan to ex­per­i­ment 8-9 months ago to see if there was ap­petite in other mar­kets. The ini­tial suc­cess in South East Asia gave us an im­pe­tus to look at that as a sep­a­rate rev­enue line item.

Did it all hap­pen too big, too fast in terms of fund­ing too?

Venkat: I’ve seen three booms and busts - two in the US one in In­dia. Ev­ery busi­ness plan was get­ting funded - few sur­vived, but those that did be­came the Ama­zons and the big net­works to­day. When the mar­ket re­al­i­ties change, you need to rein back and fo­cus on unit economies.

We want to build me­dia brands that are loved across plat­forms. That’s our North Star. SAMEER PITALWALLA CEO, Cul­ture Ma­chine When the mar­ket re­al­i­ties change, you need to rein back and fo­cus on unit economies. VENKAT PRASAD CTO, Cul­ture Ma­chine

Where do you think you are now, in that con­text?

Sameer: Some­where in be­tween both. We’ve been well-cap­i­talised as a com­pany but the main change came in eight months after the sec­ond round of fund­ing. What was needed in the long term? We de­cided to fo­cus on our own prop­er­ties. In fact, many who brand them­selves dif­fer­ently in the mar­ket are es­sen­tially ag­gre­ga­tors. For us, that has come down to 20 per cent rev­enue con­tri­bu­tion from 60-70 per cent. It is de­creas­ing ev­ery month while rev­enue base is in­creas­ing.

How cru­cial is this kind of (for­ward) think­ing?

Sameer: In our in­dus­try, when global plat­forms make changes those re­sults vis-a-vis growth are seen im­me­di­ately in terms of the consumer. The ad­ver­tiser takes more time as there’s money in­volved. Tech­nol­ogy pre­dicts de­mand and ev­ery­one is a lag­gard in­her­ently be­cause of the way plat­forms work. But we have the abil­ity to not just re­act, but adapt and then thrive, which comes down to ca­pa­bil­ity.

Venkat: Two years ago, we were al­ready push­ing for Face­book video (it was in beta) and ver­ti­cal videos.

Is the mar­ket dy­namic enough?

Sameer and Venkat: For the consumer it is. The ad­ver­tiser is catch­ing up. Look at Youtube - 15 per cent fill rate on the in­ven­tory be­cause they couldn’t re­act to Jio. The world has been wait­ing for this roll­out for five years and when it did, it came like a Tsunami. We’re lucky with the way our com­pany is. We al­ready had a raft which we built into a ca­noe, and to­day we have a warship, which we are arm­ing con­stantly!

Video was touted to drive dig­i­tal advertising this year, what’s been Jio’s im­pact?

Sameer and Venkat: Roughly 10 per cent of the to­tal dig­i­tal ad mar­ket (which is $2 bil­lion) is the video ad mar­ket. Of this $200 mil­lion, YouTube takes up $120 mil­lion that has come in just three months. Move­ment will hap­pen now that the guy sit­ting in Pa­ni­pat has come be­cause of Jio. We are in the deep breath phase. In­ven­tory has ex­ploded and catch-up is hap­pen­ing this fis­cal.

How does the ab­sence of third party mea­sure­ment (and cur­rency) af­fect the space?

Sameer: Moat is the only one that’s got ac­cess to the likes of Snapchat but they are caught up in the US with the sheer quan­tum of the busi­ness there.

Venkat: Cur­rently, we have in­te­grated our owned and op­er­ated prop­er­ties in the US in the Nielsen sys­tem, so In­dian buy­ers can look at our Nielsen-rat­i­fied rat­ing.

You have mul­ti­ple rev­enue streams. That’s a lot of pro­cesses...

Venkat: There are two key ar­eas me­dia and tech. Our me­dia busi­ness is about our dig­i­tal pres­ence, me­dia distri­bu­tion sys­tems and our owned and op­er­ated prop­er­ties.

The tech­nol­ogy side com­prises our In­tel­li­gence Ma­chine (an­a­lyt­ics), Video Ma­chine (helps cre­ate videos at scale) and Busi­ness Ma­chine (helps to scale op­er­a­tions and work­flow of the me­dia busi­ness). Both IM and VM help clients cre­ate the right con­tent. The vi­sion is to bring all of this to­gether.

Why did you get out of ta­lent man­age­ment?

Sameer: Build­ing me­dia brands is the cu­mu­la­tive ef­fort of mul­ti­ple peo­ple not one in­di­vid­ual. This is the modern-day sort of MTV with its VJs - some of them grow­ing older, some the au­di­ence falls out of love with for what­ever rea­son. A Cyrus Broacha rein­vent­ing him­self won’t have a team around him but ‘Be­ing In­dian’ rein­vent­ing it­self does. Me­dia gives the in­di­vid­u­als the abil­ity to have a fol­low­ing and a voice, but when we stop fol­low­ing them pas­sion­ately, in­di­vid­u­als have to rein­vent.

What in­sights did you lean on when launch­ing your own me­dia prop­er­ties?

Sameer: ‘Be­ing In­dian’ started 5 months into our launch and many shoots were done in my one BHK in Ban­dra. It scaled up due to an­a­lyt­ics. ‘Blush’ hap­pened be­cause of IM in­sights on women’s em­pow­er­ment. ‘Awe­some Sauce’ was on FB be­cause we knew dis­cov­ery would be bet­ter and food as a cat­e­gory was get­ting a lot more view­er­ship on FB than on YouTube. One goes multi-pronged and you play to your strengths, look at the ad­ver­tis­ers you can lever­age and fac­tor in pro­duc­tion setup, ta­lent and in­vest­ment into the de­ci­sion.

Your par­ent brand is be­com­ing more vis­i­ble now….

Sameer: Un­til now, we’d not branded our me­dia prop­er­ties with the cor­po­rate brand. The thought was al­ways that the com­pany is big­ger than the prod­ucts, but of late we de­cided to make it more ap­par­ent that they be­longed to us. What of­ten hap­pened was that as we were into ta­lent man­age­ment ear­lier, the faces were as­sumed to be man­aged by us, but the over­all chan­nel was owned or built by us. We wanted to com­mu­ni­cate that these brands be­longed to Cul­ture Ma­chine.

What are the con­sump­tion trends you feel are here to stay?

Sameer: ‘Live’ is big and we haven’t done any­thing to ex­plore the for­mat yet. Our idea of live is sport and news. ‘Sto­ries’ is also grow­ing.

Venkat: Ma­chine rec­om­mended or as­sisted - con­tent is be­com­ing the stan­dard now, and personalised AI is key. Live and Snap Spec­ta­cles are big in video. The other day I got a ping about some event for a topic I fol­low. I clicked and saw it live for half an hour. I nor­mally con­sume half an hour of video per week, but that day I saw two live videos for an hour.

Sameer: On our chan­nel Om Bhajan Bhakti, we went live with Ma­haShivra­tri, and had 30,000 con­cur­rent vis­i­tors and 250,000 shares in those two hours in the morn­ing. This is just the be­gin­ning.

Has Live’s con­sump­tion met with the hype? How much do you look at FB to un­der­stand au­di­ences?

Sameer: We look at FB closely in terms of con­ver­sa­tions which ap­ply to it and also to un­der­stand what is go­ing on in so­ci­ety in gen­eral. It’s quite pow­er­ful. Live is do­ing well though mon­etis­ing is a chal­lenge. But from a us­abil­ity per­spec­tive it has a lot of im­pact in news es­pe­cially.

Net­flix and Ama­zon are pump­ing money into slick con­tent. Where does that place ma­chine-led con­tent?

Sameer: It’s all about the dif­fer­ence be­tween sub­scrip­tion video on de­mand and advertising video on de­mand, which is pri­mar­ily watched on the phone. There’s a clear wall there. Cus­tomer be­hav­iour is dif­fer­ent when it comes to read­ing the news­pa­per and watch­ing tele­vi­sion news, for ex­am­ple.

Put Chut­ney will cre­ate con­tent for Star Vi­jay. Who’s the in­tended au­di­ence here?

Sameer: Star wants to en­gage mil­len­nial au­di­ences by tak­ing brands that they are fa­mil­iar with and up­stream­ing it.

Net­flix re­cently part­nered with mo­bile and DTH here. Is that a game-changer?

Sameer: If con­sumers spend more time on dig­i­tal over TV or print, it’s our play­ground. Even­tu­ally, all tele­vi­sion will be an ex­ten­sion of an app, with prop­er­ties com­pet­ing across spec­trums

Have you thought of putting up your own plat­form?

Sameer: No, there are enough plat­forms in the ecosys­tem. We want to build me­dia brands that are loved across plat­forms. That is our North Star. ■



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