By Vivek Pai & Nikhil Pahwa
Online video streaming application YuppTV has secured $50 million in a round of funding from Emerald Media, in exchange for a minority stake, the company has said. Emerald Media is a Pan-Asian investment firm led by Rajesh Kamat and Paul Aiello, two former STAR executives, the same team that led CA Media; it is essentially a new portfolio of investments for the CA Media team, with $300 million committed by KKR’s Asian Fund II, with CA Media as a co-investor.
The capital will be used for expanding YuppTV’s content library through originals and acquisitions, to expand globally and grow its subscriber base. Last month, the company acquired Reliable IPTV, which caters to the Telugu-speaking NRI diaspora in the United States, Canada and the United Kingdom.
The Emerald-CA Media combine has investments in Endemol, OML, Fluence and Graphic India, for the creation of original content, which YuppTV will look to leverage. YuppTV has raised money twice previously: an undisclosed amount from Poarch Creek Indian Tribe of Alabama in September last year, and $2.5 million from angel investor Sashi Reddi in 2014. It was founded in 2007 by Uday Nandan Reddy, and offers a subscription-based live television & video-on-demand service to NRIs in countries like the US, Europe, Australia, Canada, Trinidad & Tobago and South Asian countries. It claims to list over 250 South Asian TV channels, over 5000 movies and over a 100 TV shows.
Content Acquisitions by YuppTV
- In August, it acquired broadcast rights for the USA-T20 matches held in West Indies, Canada, and Caribbean Islands.
- In July, it tied up with Culture Machine to make available all of Culture Machine’s channels on the YuppTV platform, and partnered with Silly Monks to acquire digital streaming rights of the latter’s Hindi, Telugu, Tamil & Malayalam content from Tollywood, Mollywoood and Kollywood film industry. The company had also added Star Plus, Life OK and NDTV to its platform, and partnered with ZEEL to provide content from Zee’s &TV channel.
MediaNama’s take: The battle for dominating content will heat up in India
There are very few content platforms in India that are viable, or even threaten to be profitable. A company announcing that it has raised $50 million is a particularly interesting development: it is silly money, especially for content acquisition in India, and this means that its content acquisition costs are likely to go up from here on: content owners will negotiate harder once they know the other side has raised money. This used to happen in the music licensing business, there’s no reason why this won’t happen in the video business. It will also impact money paid for original content.
That raises the question: why would a company announce such a large fund-raising? Our guess is, in order to attract content creators. YuppTV is a relatively less known platform, in comparison with, say, YouTube, HotStar, SonyLIV, Eros Now, DittoTV (which is making a play for users with low subscription fees), or even NetFlix. Their platform, which allows low resolution video streaming, is uniquely suited for India. But with Amazon (with Prime) and NetFlix now looking to push for original content (and willing to play the long game for subscription), the next couple of years are critical for other video platforms.
Here’s the thing: if we are indeed at an inflection point for video content consumption with the advent of 4G and Reliance Jio, content business should see a massive increase in users and consumption over the next two years. That means that there will be a battle for users among content and distribution companies, and people will be willing to lose money or lose out. This means more original content, more exclusive deals, and more fund-raising to fund this land-grab. Our guess is that YuppTV’s fund-raising is only the beginning.
P.s.: This doesn’t necessarily mean that we’ll get better original content. As we’ve seen, corporatisation and money doesn’t make a content business, and it’s the quality of content that matters.