Much has changed in the last year or so in the digital content business in India: with the entry of Amazon Prime, Netflix, the push from media house backed players like Star India (HotStar) and Sony (Sony Liv), apart from several other platforms, the game has changed. This, from a time when YouTube was the primary game in town, and the content providers and aggregators had little choice but to play the ad-supported game. Suffice to say that the content owners and aggregators have never had it better, but in a winner-takes all market that is the Internet, what happens when the dependency increases? At the IAMAI India Digital Summit, I referenced what someone from the books publishing industry once told me about the pre-Amazon days of e-commerce in India: at first, book publishers had been ecstatic with the growth of Flipkart, because it gave them an additional, and a massive source of revenue. Then as the catalog grew, buying shifted online, and many offline stores shut, the dependency led to a squeezing of publisher margins. The power that platforms have is also evidenced by Amazon’s bullying of Hachette a few years ago, because Amazon then accounted for over 50% of all books sales in the United States, and over 60% of all e-books.

So can this happen in the media business, where large catalogs and original content from platforms will increase dependency and reduce negotiating ability for content owners?

“It’s a partnership, and you have to approach it in that manner”, Jai Maroo, who has led the digital growth of film and music aggregator and producer Shemaroo, responded. “Today it is Amazon, Netflix, Sony Liv who are interested in creating a better paying ecosystem. To that extent, we’re all on the same page. Does that mean that at at some point in time individual push-pull won’t happen, and biz models will change? It’s almost cyclic. Take production of the content: there was a time when it was an individual who made the films, then it became studios, then it became corporatised. Now it’s going back to the individual, the creative guy making the films, and the producer is primarily playing the role of a financier. There was a time when TV couldn’t get a movie until six months after its release. Now TV commands that right. The power equation has shifted and will shift again.”

“As Shemaroo we’ve seen this. We’re both owners and aggregators of content. If I’m buying from a producer and selling to a channel, why should a Sony or a Star buy from a Shemaroo. They could go directly to the producer. Why do they buy from us? Because there is some value-add that we bring to the table. There was a time when 80% of content was from aggregators, today it might be 50-50. Today, it should be raining diamonds for me, because Amazon will pay me shitloads, but at some time, Amazon will get strong enough, and say I’ll go directly to producers. Shemaroo will have to do that what it can do to make money. If things get too skewed in favour of one theme, they’ll break away. At some time i’ll have a ton of good content and i’ll go where i get best terms.”

The consumption has to translate into revenue. Telecom operators used to give me 20% revenue share, then in some cases it became 70%, and then on some content it has gone back to 40%. There will always be push and pull.”

Other key learnings from the panel discussion, including, along with Maroo, Ajay Chacko, co-founder of Arre, and moderated by Uday Sodhi, ‎EVP & Head (Digital Business) at Sony Pictures Networks

  • Longer length content now being consumed: “The networks are falling into place, and we’re seeing longer length content being consumed. We used see a lot of pushback on content, when we made 10-15 min long episodes. Now people ask ‘Why not more?’ – Uday Sodhi
  • Advertising still isn’t working: “Bulk of the money has gone to commoditised buying in Google and Facebook. This is like carriage fee: it’s low CPM (cost per thousand impressions) commoditised buy, which is an enemy of quality content” – Ajay Chacko
  • Targeting and metrics: “The metric are well understood (by agencies) even if the metrics are not targeted. What does a TRP mean anyway? How is that targeted? Every different medium has its own challenges. Content marketing, which we’re evangelising on long form video consumption. That’s really the key is, the agencies see the value of that, and are trying to learn that. We’re also taking the steps of common talking points, common metrics.” – Ajay Chacko
  • Omnichannel for content? “Movies continue to work. Content which works, it works across everything. It’s the omnichannel nature of content that we’re looking at, where the next evolution will come. What we have seen with digital is a widening of audience. You see a far larger amounts audience, which earlier didn’t stand a chance. Earlier,to do a show, you had to have a reach of 10 million now 20 million isn’t tough.” – Jai Maroo
  • Different channels for different things: “You’re still figuring this out and by the time you figure it out, things will change. Someone might use YouTube for discovery, and get them to pay for something else. People will pay for convenience, access or bragging rights. In case of rooster, it is partly for bragging rights, where fans got to see it before everyone else. Or you look at the opposite, and with TVF (The Viral Fever), which says you now go to the paid app and consume it there.” – Jai Maroo