In the second part of the interview series we speak with Nickhil Jakatdar, founder and CEO of Vuclip (pronounced view-clip), about the necessary skillsets for MVOD, content and partnership challenges etc. Read the first part of the story and the interview here.
Jakatdar tells me that telecom carriers have some very interesting assets: billing pipes, intelligence on who and what the consumer is, which he’d like to leverage while keeping the platform and distribution to themselves. “We soon realised we have a chance to be the Netflix of emerging markets. Now everybody wants to be the Netflix of emerging markets. Including Netflix (laughs),” Jakatdar says, adding that “In a market like India, working with carriers is one of the many challenges.”
Jakatdar claims that they do not advertise Vuclip or go about doing those “big things” because they don’t need to. He believes that they have a great product. “If you look at the ratings of HOOQ or Spuul, for example.. do a search for video apps in India. Rating is not a matter of opinion, it’s a matter of what consumers think”, he says. “If consumers think we’re good, and if our revenues are meaningful and growing, then it must be working, we’re on the right track.”
MediaNama: Bandwidth isn’t growing as fast as consumption is. How do you see the mobile space, the video space especially, growing in the next year or so?
Nickhil Jakatdar: It’s going to grow nicely if it’s done the right way, but it’s not going to grow at the rate at which people expect it to grow. By ‘right way’, I mean don’t try to force HD quality video if the network is poor. You’re just going to clog the network, the consumer still isn’t gonna get a good experience and it’s gonna turn consumers off badly. New players think what worked in Singapore and in the US can be formulised here. I think that if anybody uses those country formulas here, that’s a recipe for disaster. It’s going to provide a poor experience and once consumers get turned off, it’s a hard thing to get them back to the table. So consumers rating our apps say that they’re getting a good experience. If you look at the ratings of others apps, (poor) reviews like 2.7 on the Android Play Store and 3.5 on the App Store, are a sign that consumers are beginning to get turned off. And that’s not a good thing. So the opportunity is there if you have a great product and great technology. But it can also go sour.
MediaNama: How many returning users do you see as opposed to new users?
Nickhil Jakatdar: We have two properties: a free and a paid property. We do not spend any money to acquire users on the free property, it’s all organic. The user numbers go up as more people come into the data ecosystem, and that’s for both free and paid. Our growth mainly comes from the returning users because that makes up a major chunk of our user base. On the paid side, because we have business model where we can actually make money, we are willing to spend money to acquire users. There, our growth, our rate of being able to acquire new users is higher, it’s not 18-20%, it’ll probably be 50-50%. But the base is growing.
MediaNama: Where does most of your consumption happen? On the mobile web or the app?
Nickhil Jakatdar: Mobile web is where we’ve been for the last 8 years, so absolute numbers wise, its very big. The app is only about a year and a half old and its numbers are smaller, but the engagement is much higher. Maybe like 10-20 times higher. On mobile web, if they’re watching for 20 minutes a month, on the app, they’re watching 400 minutes a month. So if I look at it by consumption, then it’s a lot more similar than if I did it by unique users.
MediaNama: Is content on the Vuclip platform curated or generated automatically?
Nickhil Jakatdar: We do both. Manual curation because we look at data, what’s working and what’s not working, and there’s always a new surprise that comes in. Manual curation is done out of our Mumbai office and we do a lot of algorithmic recommendation engines, so its a combination of the two.
MediaNama: What do you have planned for the next year for Vuclip in terms of partnerships and as a company?
Nickhil Jakatdar: Our goal in a market like India is to keep growing the way we’ve been growing. This means more content deals and partnerships, more carrier partnerships, more alternate billing mechanisms (like Paytm) as well. What we really want to figure out in the next one year is, ‘what is the biggest bottleneck?’ We’re yet to put our theory to test but I think it’s about the cost and speed of access. We’ll test it and solve it. We’ve done it for other things, we’ll figure it out here.
As for company plans, we want to do two things: breadth and depth. We already have a lot of paying customers in India so we want to go as deep, strike more content deals, become the one stop shop for consumers here and get more free and paying subscribers. Breadthwise, we’re in 7-8 markets and we want to get to 15-20 in the next one year. Our eventual goal is every country in the emerging market, but we want to open up in South East Asia, the Middle East and Africa, then maybe we’ll open up Latin America in a year or so from now.
MediaNama: Is there a stark difference in the way you operate in India and in other emerging countries? Do you have to function differently?
Nickhil Jakatdar: I think there are some similarities and some differences. Similarities are they’re all low ARPU markets, their systems and their bandwidths are not as great as video requires, which is fine. The android handset ecosystem is huge but they’re not the $500 Android phones, they’re $100-150 Android phones. The differences, I think, are very often cultural. In India, the ecosystem is a lot more aggressive. People are willing to take and make bigger bets, whereas in Indonesia it’s a lot more conservative. They won’t allow certain things, they won’t do certain things, they won’t give subscription plans of more than a certain amount. There’s a lot of restrictions over there.
MediaNama: Do you have any diversifications plans in the video business, like moving to even more diverse content?
Nickhil Jakatdar: Content wise, I think we probably have the most diverse catalog out there. Because the regional content consumption is higher, we’ve gone and licensed content in 25 or more Indian languages. We have content in Assamese or Pashto, because we found that there is a demand. So we went ahead and licensed even the less popular languages. We’ve grown not just in terms of languages but also genres, because whatever people want, we find out and then ensure we license it. We’ve also experimented with creating our own content. It was promising, but how do we scale it up? Is that something you should invest in? Just because we had initial success doesn’t mean it’s going to scale. Sports is one thing we haven’t done, live sports: too expensive and a lot of people doing it. It’s a race to the bottom because somebody is going to give it for free then how do you make money?
MediaNama: What has been the most surprising statistic, data or element which you discovered in the last one year? Something that you didn’t expect…
Nickhil Jakatdar: There were many such things, I am trying to think of the most interesting one. Because I get surprised a lot, even though I should not be but I do. About 1.5 years ago, we did a survey on how many people watch video on the mobile devices in Tier III cities, in fact, they were villages. In many ways, this is the number one question you want to answer. Our view was that in India, there’s about 20% data penetration and in rural areas, it must be around 5-10%. We were shocked to find out of the 395 people we surveyed (it was not an online survey, we sent people into the field), all 395 had watched video on their mobile devices, where we hypothesized the number to be just 20-40!
(Nickhil tells me a story about a guy who drives around in a couple of villages in his jeep carrying a laptop full of videos. He asks the villagers which videos they want (restricted to 1GB because of the 1GB USB drive that he sold them) and once their 1GB quota worth of videos has been selected, he copies them to the USB, which the villagers stick on to their mobiles to watch video. Mind you, he charges Rs 20 for it, possibly going twice a month.)
This gives me belief that there’s a way to build a business even in those markets because there’s a willingness to pay. If you remember, Airtel had come out with this whole 1 Rupee video campaign which opened the eyes of the villagers to the fact that stuff like that existed. That type of awareness needs to be built because there is a demand. They just don’t know the way to get what they want, which is whatever they want on demand, which is via a data plan, to access the internet.
MediaNama: What kind of skillsets do you look for in the MVOD industry?
Nickhil Jakatdar: Since we’re a consumer company, one big skillset is understanding consumer needs. The ability to talk to consumers and read between the lines. Its not straightforward because what consumers want, what they say they want, what they’re actually going to do are all different things. Understanding consumers is a combination of talking to them, reading between the lines and analysing data. Anybody who has a strong analytics or statistics background would be very important skillsets that I look for.
On the actual development, we’re trying to develop for Android platforms and soon for iOS. The reason it’s different from desktop programming is that on desktop, there’s so much space, so much real estate to navigate. UI/UX skillset is also important. Very few people are skilled in it because it’s a relatively new area. People who have a UI/UX background would be very important for the MVOD industry. But just because you’re good at UX/UI at desktop doesn’t mean you’re good for mobile. For analytics, desktop is a lot more defragmented, mobile is very fragmented, so many platforms and OSes so I’d call those two out.
*Note: Responses have been edited for brevity