outlook15

As a part of our #Outlook15 series, we asked heads of online video companies – Spuul, Sony LIV, BoxTV, Rajshri Entertainment, Vuclip , Culture Machine, Qyuki, Pepper Media, Nirvana Digital & One Digital Entertainment about their focus areas for 2015, and the challenges that the online video ecosystem needs to address.

Which according to you were the top developments and roadblocks in the online video segment in 2014? Why?

Subin Subaiah, Spuul

– Data consumption really took off in 2014, with all telcos reporting increase data usage and revenues. We saw this at Spuul too, with a lot of consumption driven by folks on mobile over data connections.
– Even though more people are using data, Internet speeds continue to be abysmal. We’ve seen great take up of our download feature as a result. We do hope that the much promised 4G networks materialize in 2015 and improve the connectivity situation.
– Piracy continues and will be an impediment until the industry and content owners take complete charge of fighting it.

uday-sodhiUday Sodhi, Sony LIV

– Increase in mobile internet connectivity and introduction of cheaper smartphones along with a drop in internet surfing charges has led to huge increase in video consumption.
– The number of video viewers on mobile & tablet devices increased considerably over 2014 and interestingly, addition of screens has only increased a user’s viewing time. Importantly for us, the entertainment category has the maximum reach in the online video segment and sports is one of the fastest growing content categories.

Ashish Behl, BoxTV

– One of the most important development has been the surge of mobile connectivity, but the biggest roadblock, ironically, is still the lack of effective bandwidth. Mobile video consumption is still very short form because the cost restricts consumption of longform content on mobile.

Nickhil Jakatdar, Vuclip

– Rapid adoption of low cost smartphones and significant increase in time spent on smartphones. Watching videos on mobile phones is also becoming mainstream.
– There are roadblocks like the frustrations of constrained networks. In most parts of the country, networks still remain patchy and bandwidth fluctuations are rampant. Even in the areas that offer faster networks, the surge in data traffic often clogs the networks resulting in frequent buffering, thus hampering the mobile video viewing experience.
– Consumers are fearful of the costs associated with data consumption. Innovative models such as the Airtel Re. 1 Entertainment Store do a fantastic job of getting consumers over this hurdle in a transparent and cost-effective way.

Samir Bangara, Qyuki

– Internet data and smart phone penetration will be the leading themes for the next 18-24 months as we ramp up to being the second largest smartphone market in the world and 4G becomes a national reality.
– Growth of YouTube as a platform and the transformation of some channels into household IP like AIB and The Viral Fever is a great forerunner to what lies in store for 2015.
– The emergence of MCNs (multi-channel networks) in organizing talent and promoting influencer marketing to brands.
– The key roadblock has been around delayed deployment of 4G.

Sameer-Pitalwalla
Sameer Pitalwalla, Culture Machine

– Facebook and Twitter both launching their own online video platforms.
– YouTube’s plan to launch a subscription all you can eat flavour as well as the launch of Youtube Music Key.
– Amazon Prime’s impending plans for India.
– Growth in the installed based of low cost smartphone devices driven by Android adoption.

– Roadblock: Proliferation of high speed wireless broadband remains an issue, without that, growth in reach and consumption will remain stunted. We have the backhaul but not the spectrum and hence the last mile. Same issue, different year. We have the devices, but not the bandwidth and requisite pricing to have data hit critical mass like voice did.

Radhakrishnan Ramachandran, Pepper Media

– Online video consumption has grown significantly over the past 18 months. India is expected to be the second largest market for YouTube this year. Consumption on mobile devices is driving this growth primarily. YouTube’s introduction of offline video streaming would mean that almost 60% of video viewing will happen on mobile devices this year.

– With Indians unwilling to pay for content, we are still talking about an ad-supported business model for online videos.

Pinakin Thakkar, Nirvana Digital

– More original creators came on to video platforms, more specialized web production companies approached us, Overall good growth for the industry.
– I wouldn’t really call them roadblocks but this is one area we could definitely benefit if there were better (advertising) CPM’S on platforms, the good news is that slowly brands have become open to spending and integrate with online video.

cmn-TV

What are the consumption patterns (online & mobile) that you observed in 2014?

Subin Subaiah, Spuul

– We continue to be heavily mobile centric. >60% of our consumption is on mobile.

Uday Sodhi, Sony LIV

– Content consumption on mobile is growing rapidly and a key driver for us has been live sports. During FIFA World Cup 2014, we saw that at least 30% of our viewer base came from mobile devices.
– The trend is similar on Sony LIV, with around 60% of audience base coming from mobile devices. Our content library on Sony LIV is continually expanding and includes some popular classics like Office Office, Chamatkar and many more.
– We are also witnessing a “Cross –platform” or “platform agnostic” video consumption, since a typical consumer is present across multiple screens during any given time.

Ashish Behl, BoxTV

– Faster growth on mobile, but longer time sessions online. By unique users, its 50/50 web and mobile, but by consumption, still skews towards online.

Rajjat Barjatya, Rajshri Entertainment

– A very definite move from desktop to mobile or handheld devices was noticed.
– Most of the content consumed in India especially from the web is viewed free of cost by the consumer. This may be due to the impediments people face while paying online. It is not as easy to pay online as it is on mobile phones and there is also the issue of willingness to pay. A lot of Indian companies have tried it to build a subscription VOD service online, like Netflix, but have been successful to a limited extent.
– We have also seen the emergence of made for web content, with some content creators creating a large and loyal audience. We have bypassed the 35 mm and 25 inch screens and I become my own programming head by reaching out to the audience directly via the internet, primarily via platforms like YouTube.
– A massive correction in the mobile VAS ecosystem was noticed, with the world moving from on-deck to off-deck. We are seeing a number of platforms that are using the mobile carrier as a billing engine for payment collection and then as a delivery channel but pretty much the entire process of customer acquisition is being done by the platform directly.

Nickhil JakatdarNickhil Jakatdar, Vuclip

– The year 2014 marks shift to mobile as the mainstream entertainment platform. Vuclip’s Q2 Global Video Insights [GVI] revealed that 80% of Vuclip’s consumers report watch videos on their mobile devices at least once every 2-3 days with more than half opting to watch daily. 59% of metro users are opting for videos over five minutes in length.
– With regards to content, Bollywood, sports, music & television shows ruled the roost in 2014. This is quite evident by most of the top search terms on Vuclip in 2014 which included Bollywood stars Shah Rukh Khan, Salman Khan, Katrina Kaif, Deepika Padukone and Alia Bhatt. Comedy Nights with Kapil also featured as one of the top searches. Additionally, current events often dominated consumers’ choice of content. For example in Q3, the Prime Minister’s speech, horror movie trailers, a tiger attack at the Delhi Zoo and devotional content emerged as the top content choices.

Sameer Pitalwalla, Culture Machine

– Growth of original content consumption across verticals.
– Contribution of consumption of viewership continues to grow in favour of mobile, desktop is getting marginalised.
– TV is no longer the only way to make brands, both advertisers and creators are seeing success in resonance through digital video programming.

Samir Bangara, Qyuki

– Music and Comedy remain the main staple of consumption outside the media houses promoted content (broadcasters and movie studios).
– I think in 2015 you will see more independent creators beginning to break out from the clutter.

PinakinPinakin Thakkar, Nirvana Digital

Consumption of videos on mobile devices changed drastically in 2014. For Nirvana Digital, this was the year that mobile devices overtook computers in terms of origination of views with over 50% of our views originating from mobile devices. It is also important to point out that our views and minutes served doubled in 2014, so mobile devices are growing extremely rapidly in terms of accessing videos.

We also observed that the average view duration increased in 2014 for views from India – so people are spending more time watching videos.

Shabir Momin, One Digital Entertainment

The mobile consumption is higher than WEB has been a surprise, this is only growing. People have moved away from appointment viewing on TV to appointment viewing on Digital now, people actually wait for a video to be launched on a certain time on a digital channel today. Short crisp and tucked programing in creating content is what’s been consumed most.

How has the sector changed from 2013 to 2014?

Subin Subaiah, Spuul

– More players eyeing the space – we view that as good news. More players mean more education of the customer & more pressure on content producers to control piracy. Eventually, we believe that multiple players can co-exist in their own specific niches.

Uday Sodhi, Sony LIV

There are 4 key factors that are changing in the Indian digital eco-system:

– Consumer Internet consumption charges are going down, hence users can now access the Internet.
– Variety of Handsets, across price points – users can now buy an Android smartphone as cheap as Rs 2,500.
– India is jumping the wired Internet phase, straight onto the wireless Internet phase.
– Content is being consumed on-the-go… content owners are paying attention to this.
– Indian audiences also today prefer anytime, anywhere video content as compared to appointment viewing as offered by TV, since they are impatient and prefer binge viewing.

Ashish Behl, BoxTV

– It’s still waiting to ‘breakout’, which will only happen when bandwidth hits a critical level.

rajjat barjatyaRajjat Barjatya, Rajshri Entertainment

– We have seen a massive growth in terms of the consumption of our video content in 2014 like in the previous years. We have also begun experimenting with dubbing our food content in international languages beginning with Indono Daidokoro which is our Japanese language channel for Indian food. We are ready with food content in multiple international languages which I am personally more bullish on, because those are much bigger markets, in terms of audience size.

– A lot of experimentation is being done by us in terms of the kind of content we are producing, basically to make content relevant for YouTube audience or iTunes audience across the world. Our aim is to produce content that reaches an audience way beyond the Indian audience, So in order to reach audiences in those countries, we have to produce content that is relevant for them and in their language.

Nickhil Jakatdar, Vuclip

– Video has become the catalyst for data plan adoption for mobile operators and is fueling the next level of growth in a flat to declining voice revenue stream. Different approaches are being tested, for example, Airtel Re 1 Entertainment store opened up mobile video access to millions of consumers who had not experienced mobile Internet ever before.

– In emerging markets, premium content partners have started realizing that a freemium model is highly effective, where the user has access to lots of free content along with an option to subscribe to select premium content of their choice and treats premium content as it should be.

Sameer Pitalwalla, Culture Machine

– The creator eco-system was under the radar, it really only got recognised in 2014.
– Brands were not present in the eco-system, besides a few examples like Axe had done with Disney UTV with Chickipedia. But still far and wide. This got a lot more traction in 2014.

Samir Bangara, Qyuki

– First I think consumption has nearly doubled. If you look at just fan bases of the top channels.
– More creators actively looking at online video as a medium to be discovered after the likes of Jonita Gandhi, Shraddha Sharma, Siddharth Slathia, Gaurav Dagaonkar in music and AIB, TVF in comedy.
– Shift from mobile telco ecosystems to more OTT plays for online video consumption.

Shabir Momin, One Digital Entertainment

More brands are advertising, more money is spent in this space. Technology has evolved and is evolving faster. Content creators have started realizing TV is not everything they are changing strategies for Digital and taking it more seriously.

How has your relationship with movie studios/content providers changed in 2014?

Subin Subaiah, Spuul

– Content owners have started taking the OTT space much more seriously. With multiple players coming on board, they’ve been educated on online business models – making the conversations much easier from a few years back.

– A lot of the smaller productions have started viewing OTT as a key distribution channel to reach out to a bigger, more global audience.

Ashish BehlAshish Behl, BoxTV

– There’s a chicken / egg problem here. More money gets generated for movie studios offline, which perpetuates models that give offline media preference for content. That being said, we’re working with a few studios to bring some new releases and fresh content online first, or at the same time as offline windows.

Nickhil Jakatdar, Vuclip

– With increasing consumer appetite for mobile content, studios and content providers are keen to reach their viewers on this platform, faster than ever before. We have strategic partnerships with more than 160 top studios around the world in 20 languages and have emerged as a natural partner for brands like Rajshri, Balaji, Graphic India, TIPS and many more who have found ardent fans for their premium mobile content.

– Our deep billing integration with all top mobile operators has offered better monetization opportunities for content providers, since it encourages consumers to pay for content of their choice. Content providers are also assured that their premium content is delivered with an ‘unbuffered’ viewing experience, which is highly critical for their reputation.

Samir Bangara, Qyuki

– Strong partnerships need to be nurtured here. The west has understood this well which is why Disney bought Maker, Dreamworks and Hearst invested in Awesomeness, Bertelsmann invested in Stlyehaul, Chernin Media and AT&T invested in Fullscreen.

– In India we have a strong partnership with Universal Music and look forward to working with the Studios and broadcasters. Interesting case study : the spoof of Game of Thrones that was commissioned and executed by YT influencers did significantly better than the official trailer. There are clear opportunities and business reasons to work together.

Sameer Pitalwalla, Culture Machine

– The priority that this medium has in terms of planning the overall mix has grown. We see this across the board.

Radhakrishnan Ramachandran, Pepper Media

We continue to work with some of the leading television networks who are part of our network on YouTube, managing their channels end-to-end. You will see us launching online specific programming for some of our key partners shortly.

Shabir Momin, One Digital Entertainment

They have become more engaging and are now looking at this space more seriously and thus more content is being created and better content is being created.

What is one trend that surprised you in 2014? Why?

Subin Subaiah, Spuul

– Content Providers are taking a strong stance against piracy. China was the most surprising. We hope it happens soon enough in India.

Uday Sodhi, Sony LIV

– While mobile growth in the online video segment was expected, the pace at which it has grown in 2014 has been a surprise. And it’s not just an increase in the viewer base, but also the amount of time spent by mobile users viewing videos.

Rajjat Barjatya, Rajshri Entertainment

– The demand for Bollywood content from non-traditional NRI markets. We are now getting audiences from almost 200 countries, many of these countries do not have a theatrical release, so the only way they can consume Bollywood content is via the internet. I see this as a great opportunity for subtitling our Bollywood films into multiple international languages.

Nickhil Jakatdar, Vuclip

– There has been a rapid growth in consumers’ willingness to pay for high-quality content with a superior viewing experience. Vuclip has deep partnerships with over 10 top mobile operators in emerging markets for payments and our subscribers grew to over 5 million by the end of Q3, from over 3 million global subscribers at the end of Q2.

Samir Bangara, Qyuki

The irreverence of online video audiences. Supawoman was in greater demand at the YouTube fan fest than SRK. Alia Bhatt’s sketch did significantly better than SRK’s – could you ever expect that in traditional media ?

Radhakrishnan RamachandranRadhakrishnan Ramachandran, Pepper Media

I am seeing celebrities being paid large minimum guarantees for content partnerships. That may not be a viable model considering the fact that the market is still evolving. Keeping cost of production efficient is critical in this game. We need to educate the market and paint a realistic picture to all key players and build long-term partnerships that are mutually beneficial.

Shabir Momin, One Digital Entertainment

Sunny Leone having higher women engagement and followers really surprised us. Food emerging as one of the largest followed genre also surprised us. New content creators who will become digital star tomorrow have started emerging.

What are the likely trends that you expect to see in 2015? Why?

Subin Subaiah, Spuul

– We see advertisers taking a keen interest in the online video space and more ad $’s moving in. This is a trend that we think will only pick up pace in 2015.

uday-sodhiUday Sodhi, Sony LIV

– Mobile consumption will fast outpace desktop consumption and sports content will be the key driver of this trend.

– Mobile wallets will also see a huge adoption in the coming year and this could potentially be a game-changer for brands, as it could change the spending habits of consumers.

– We are also expanding our content portfolio: We’ve added UEFA Euro 2016 qualifiers, NBA and Ultimate Fighting Championship (UFC), both of which will be aired live on LIV Sports. In addition, we’ve also added Impact Wrestling (formerly known as TNA) and also aired the recently concluded Ram Slam T20 Challenge (South Africa’s domestic cricket competition) and FIFA Club World Cup 2014.

Ashish Behl, BoxTV

– Mobile consumption will rise, that’s obvious. What will be interesting to see if the payment solutions get better (3rd party wallets, better operator integrations), when the consumer propensity to pay increases. That can create an entirely new paradigm for video consumption, although it may be a 2-3 year story.

Rajjat Barjatya, Rajshri Entertainment
– We do hope that 4G becomes a reality in 2015, since it will solve a lot of infrastructural issues like bottlenecks in terms of broadband speeds. We have been working closely with Reliance Jio and I think it’s a very important opportunity that will lead to the consumption of rich media content on the web.

– Good broadband speed will be available starting second half of 2015, if things go as per plans and we will achieve critical mass by 2016. This will also accelerate a lot of things like the transition to smartphones and advertisers moving their budgets from traditional to new media, since ad dollars follow eyeballs.

Nickhil Jakatdar, Vuclip

– The trend of subscription content will gather further momentum with consumers’ willingness to pay for premium experience and content on the mobile.

– Leading brands will factor mobile as a key platform to their brand advertising strategy & plan for the year with allocations to mobile channels that can create an immersive brand experience.

– There will be increased collaboration among content partners, OEMs, mobile operators and advertisers to grow and build the mobile video economy.

– More players will jump into emerging market mobile OTT VOD space and there is likely to be consolidation.

Samir Bangara, Qyuki

– Emergence of Facebook as a major video distribution platform in addition to YouTube. More relevant in the Indian context given the scale of FB influence and growth.

– Will drive video consumption massively coupled with better infra from a handset and network perspective.

– More brands engaging in influencer marketing campaigns.

– Growth of MCNs helping organizing creators and content into more meaningful and brand monetizable buckets.

Sameer Pitalwalla, Culture Machine

– The role of technology in content creation and management will be the bellwether for the industry. Stand-alone content only companies will face an enormous challenge to scale.
– The growth of Facebook and Twitter as viable alternatives to video distribution.
– More brands coming on board and committing larger budgets.
– Creator eco-system will continue to grow.
– May have consolidation in the market space, we are already seeing local firms that have been struggling partnering with international MCN’s just to stay alive.

Radhakrishnan Ramachandran, Pepper Media

I believe growth of branded video solutions will be the key driver for the online video segment. Marrying brands with original programming concepts could just be the way of building an alternate revenue model.

We have made a beginning, when we launched India’s first online reality-show for fashion designers, in association with Megamart. You will see many more such programming concepts taking off this year. We are building a network of celebrities and content creators who will be part of this.

What are the challenges in the online video segment that needs to be addressed in 2015? How do you think these challenges can be addressed for the growth of the sector?

Subin Subaiah, Spuul

Subin Subaiah

– Piracy continues to be a scourge, and content producers need to invest in tackling it. Content producers need to continue engaging with agencies that already do this, beyond the period of theatrical release if they want to make their assets valuable to OTT players such as us.

Uday Sodhi, Sony LIV

– The key challenge is the pace at which consumers adopt high end smartphones, along with the adoption of higher bandwidth. The latter especially will be key in delivering high quality video content.

– The increasing penetration of 3G services, along with the launch of 4G services and the expansion of the country’s fibre optic network to bring connectivity to smaller towns and villages will certainly address this challenge and I believe it will definitely give a big fillip to the industry.

Ashish Behl, BoxTV
– Better bandwidth: it’s an industry issue, but most prominent for video services.
– Payment capabilities: If we want to see high quality premium content online, legally in India, there will need to be a meaningful paid window.
– Better partnerships with licensors: The industry will need to seed the online video outlets if we want to see a growth in consumption and value.

Rajjat Barjatya, Rajshri Entertainment
– Broadband infrastructure is still very patchy in some parts of the country, which is huge impediment to watching videos. Platforms like YouTube are being smart about it by introducing the option to watch videos offline, but nothing can be more important than increased broadband speeds.

– We need to make it easy and convenient for people to pay online. People are paying via mobile carriers, but how do you make them pay online. I do really believe Indians are willing to pay for content and We have to ensure we can build a service, like Netflix, which generates subscription revenue consistently on a monthly basis.

– Retention of good talent is another issue. Bollywood and Television are far more appealing as far as exposure is concerned. With this ecosystem maturing, we hope to see a lot of fresh talent- both creative and managerial, attracted towards digital.

Nickhil Jakatdar, Vuclip

– Offering on-demand premium content at an affordable cost and easy payments. There is tremendous opportunity for mobile video consumption to grow further. Having the right technology as well as keeping a finger on the pulse of consumer preferences and habits will prove to be key differentiators.

Samir Bangara, Qyuki

Need to nurture the independent talent base – in order to do this all the constituents including labels, studios and broadcasters need to take a more strategic approach to the business rather than a near term tactical approach and snuff out the creativity from the ecosystem. This is going to be hard to achieve.

Monetization of online video is certainly a challenge – avoid the mistakes made in pushing down online CPMs.

Sameer Pitalwalla, Culture Machine

Besides infrastructure, no challenges, only opportunity.

Radhakrishnan Ramachandran, Pepper Media

Like I mentioned earlier, monetization continues to be a challenge. While you would see figures like 200 million Internet subscribers on one side, ad dollars are not exactly pouring in. I hope that brands and media buyers will start betting aggressively in this space that is seeing a huge traction from a consumer point of view.

Technology will play a key role in addressing some of these concerns. Our effort is to simplify the model for brand managers, by helping them analyse the impact of their video campaigns on platforms like YouTube.

Pinakin Thakkar, Nirvana Digital

Monetization of videos on mobile platforms needs to increase and CPM growth on ad supported services needs to increase. We are hiring our own ad sales team to address this.

Shabir Momin, One Digital Entertainment

I think the only challenge is traditional creations should first clean up the legacy way of creation and start fresh, then the original content will be made for digital, trying to port TV to digital is not working and many are wasting time and money on that.