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#AsiaD: Peter Chernin – India With Low Cost Tablets Is A Recipe For A Very Different Content Experience

There are very big content broadcast opportunities in India, and very significant digital opportunities, Peter Chernin, former News Corp COO and founder of The Chernin Group said at the AsiaD conference. Chernin is banking on the developing world as an area of growth, and has opened offices in Hong Kong and Mumbai, and Chernin said that the opportunity is in buying local business. “India is a fascinating place – low Internet penetration, huge mobile penetration. What will this country look like when it has 300-400 million low cost tablets.”

“One of the dominant things is that there are 105-110 million pay TV households, and the average household has one television, and is generally controlled by the mother, and you have a large young population with low cost tablets. It is a recipe for a very different content experience.”

Chernin felt that the digitization of TV spectrum will be more impactful than in the west, where digitization didn’t offer the consumer anything spectacular, since the infrastructure was already in place. “One of the most spectacular things that will have is that there is no digitization of content in India. 85% of the channel subscription doesn’t go up to the channel, because local operators lie about the number of subscribers. This will lead to more money being spent on digital content. Digitization in this part of the world will be meaningful.”

On India & China: “We’ll approach these markets opportunistically. The opportunities in China will be more digital because there are more regulations on traditional media, though there are fewer in digital. You can’t own content in the traditional space . We recently bought a mixed martial arts business in China. India will be more growth. There are big content broadcast opportunities, and very significant opportunities in digital. This is about buying local businesses.”

“I think that these are arguably the two most significant markets in the world. They have over 700 million customers (each) in India and China. The big difference is that China has a decent Internet infrastructure, and India does not. You’ll see the real growth of the mobile Internet, and set the standard for mobile Internet. Traditionally people have thought that digital businesses here that have copied traditional US Internet businesses. Now it might be different.”

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Other significant statements that Chernin made at AsiaD:

On Paid Content: “Sequential IP distribution of content is a huge opportunity. Content is out of the bottle, and you can’t put it back. Unless there is a viable legitimate means of distribution, consumers are going to steal this stuff. The bulk of people, if you give them an easy straightforward way of consuming it easily, people don’t want to pirate.”

“I believe that people will be willing to pay for content, but it has to be genuine, original, premium content. One of the interesting questions is that could you get 10 million people willing to pay 2 bucks a month for original HBO content.”

On buying sports rights: “You have to look at buying NFL rights as a strategic weapon, and give you leverage. If you’re an online distributor, you have to look at it strategically, and it’s a big bet. Fox built out Fox Sports with its NFL rights”

Competitor needed for NetFlix: I would want to do everything I could do to support Hulu. I think if you’re a studio, what you want more than anything is that there should be a significant competitor to NetFlix. In terms of the IP streaming distribution, they’re leading by a large margin. There are out there making big aggressive deals exclusively. These may be repeats, and I don’t think it short sighted of studios, but what is short sighted is that they’re not supporting a competitor. I think their best hope for a competitor is Google.

On creating a new digital distribution channel: “You’ve seen the Internet create a dominant player in so many areas, but media distribution is so wide open. Flipboard, an investment I made a year and a half ago, is a fascinating means of distribution of content. Tumblr is another of my investments. What’s interesting about Tumblr is that the growth trajectory, and it falls between Twitter and Facebook. It is a self publishing content business. People retweeting, resending, and this situation of self publishing is fascinating. They’ve just begun thinking about a business model.
Flipboard is interesting because it is the most beautiful content interface that we’ve seen yet, and it’s a great means of social distribution of content. There is so much content available right now, and consumers are and will become more interested in how do I wade through this stuff, and discover this stuff. Whether you see Pandora, it has figured out a way to serve music content in a minimal way. Flipboard does that with a social network. ”

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“So far the web distribution of content has been low cost content, but it is important to bring some interactivity into content online.”

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