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A league extraordinaire…..

It’s never over till its over!

With little over a decade under its belt it is of recent vintage. However ever since its launch in April/May 2008, it has captured the imagination of all the cricket crazy populations not only in India but across the world. It’s the biggest cricket league in the world, perhaps the richest and has developed itself a brand pull which any brand finds it hard to ignore. It’s the IPL, the Indian Premier League, and the launch of its 12th edition earlier this month brought a round of welcome cheer in this Covid induced comatose in the populations across the world specially in India. Being held in UAE, without the voiceferous crowds, and other restrictions but welcomed nonetheless by all starved of competitive sport for the last seven months. Admit I like cricket and that India is a cricket crazy nation, but still its current edition launch came as a breadth of fresh hope for millions amidst the anxiousness witnessed over the last few months. Lure and the fable continues to get stronger and one wonders .. what makes it tick?

Brainchild of Mr Lalit Modi and modelled on the English Premier league (EPL), having cricket as its main content, it quickly dominated the imagination of fans in India and around the world. Two months of world class cricket in the 20/20 format, most of the international stars, club loyalty, money power, laced with entertainment made IPL the ‘happening’ league across the world and numero uno in India. It’s also the hottest TV property with ever increasing TVC ratings every year, TV being its largest contributor in terms of revenue besides tickets and now digital as well as other ancillary income. It’s a go to property for any brand launch, ask OPPO. Vodaphone, Havell’s, car brands and now digital brands like Byju’s as well as Dream 11. It has made money for BCCI, the club owners, the players and provided Indian cricket with a match ready bench strength incomparable in the world. Virtually every cricket playing nation now has a 20/20 league of its own but IPL still remains gold standard. 12 years of its existence has also seen some downsides like its tryst with match fixing, drug infused parties and betting but the brand has survived and come out stronger!

So what makes it tick… ? The answer lies in the content on offer. If one has witnessed the match on this Sunday between Rajasthan Royal’s and Kings Eleven Punjab and last night beween Mumbai and RCB Bangalore, one would know. Both were high scoring matches but with twists exemplifying the unwritten rule that cricket is by chance and it is never over till it is over. Sunday match saw a relatively new player arrive at the crease, nervous, overawed, and waste almost 20 deliveries in trying to get an impossible ask of almost a 100 runs in the 6 overs remaining. When we thought all was lost…. Rahul Tewatia, the player unleashes 5 sixes in one over scoring 53 in 30 balls in the impossible win! He set the TV audiences and the Twitter on fire and became an overnight star. Yesterday Mumbai came back from behind to score 89 runs in 30 deliveries to level the score, though they eventually lost. Where would you be if you were watching these matches ….. at the edge! Audiences across the world were too with pandemic receding to background recesses of the mind.

The brand IPL has shown resilience, a right offering at the right time. In today’s depressive induced thinking and insipid news and other TV content, this league is manna from heaven. Inspite of not having live viewing possible this year, its tv as well as digital audiences will far overshoot expectations. Already looking forward to the next match today and really does not matter who is playing as all teams are well balanced. Will just enjoy the spectacle!

Take care and stay safe.

Creative excellence is the soul of the business of Entertainment…

Creation is the soul of good content

Business of Entertainment and Media attracts a lot of eyeballs, in fact more than its due share and that is the reason it front ends in current times in marketing some of the other business endeavours. It may not be financially the most prudent or efficient and yet it carries an overweight in terms of eyeballs. What is the enduring lure over generations and what makes it so popular? Content of course as we all know is at the heart of this business and we talk of this every time we discuss entertainment. Content is not something that is availiable off the shelf, whether it be written, spoken, on the video or integrated into a story. It has to be created and that creation involves ideas, writing, direction, photographic skills, story telling and presentation skills which then allow it to become a whole. This is true of content of any kind, whether it is live action, written content, a podcast, video or filmed content.This is the edifice on which the whole business of Entertainment stands. Some say distribution is also key and while I agree but its the basic content which has to be there first to distribute. We sometimes pay significant attention to the distribution and economics ignoring the other factors. It is in fact the excellence of the creative team which is key, as its creative vision is the soul of the content which as we know is at the heart of this business. How does one put a value to this creative excellence?

It’s clearly a very difficult task to discover value in a creative endeavour. It’s not a simple calculation of time and costs like any other input for the real value in this case lies in the eyes of the beholder which is the public or the audience. Also what pulls in the audience is also unclear. Is it the star cast, is it the story or the photography or the combination of all? Audience polls in recent times have been employed as indicators of audience acceptance but how reliable are they is again unclear. Besides these actions, putting a value to the artistic or creative endeavour is difficult. A good creative endeavour not only generates money but also can turn ordinary mortals into stars overnight. How does one put a value to that? That is one of the reason why economics of any entertainment enterprise is fraught with risk. Therefore we can have a windfall or we can be in depth of a deep crevice based on how we assess and price our content. India makes 1000 plus movies every year besides other video content and yet what is the success ratio? Very little despite the experience!

We probably are never going to be able to judge a true worth of a piece of content or for that matter a piece of creative art.For all the art conossieurs, this is a known fact through many centuries and should be true for other areas of artistic or creative excellence. There is always going to be an element of luck or probability as part of this process and if one is to be in this business then one needs to recognise the same. All good content may not be a success and all bad content is not necessarily unsuccessful. Though one thing is for certain, more investment as well as appreciation needs to go into the creative endeavours. Besides the stars, more incentive needs to be built for writers, directors, technicians who are the real part of a creative vision which is the soul of the entertainment business!!

Entertainment business has never been easy but always enjoyable. As one enjoys one’s next instalment, appreciate the creative rigour that goes behind it and if one does that, this article would have served its intent. Have a lovely weekend and stay safe!

Change is the only Constant……

Change is the second name for life and one needs to endure and accept it as a rule rather than an exception. However nobody could have anticipated a change that we are currently seeing due to Covid 19 challenge. This is true for every facet of life as we have known and the Entertainment & Media is not different , in fact more accentuated than some of the other business sectors. Move towards Digital and video is the change and while this move was already apparent before this lockdown, the resultant pace has quickened manifold. The areas which have really started to pose existential questions is the ticketed live events, theatrical distribution of movies and the print business. Print business has been in decline the world over though India, because of regional languages and rural penetration, it was still showing a single digit growth which may now have premature decline should the lockdowns continue for sometime. Let’s go a little deeper into the discussion on the theatrical distribution of filmed content which is hot topic of discussion the world over including India and then look at the ticketed Live events.

Filmed content since time immemorial has been characterised by theatrical distribution of the same. There is certain mystique of larger than life characterisations which can best be enjoyed in a theatre setting with large curved 70mm screens, Dolby sound and 3D effects. It gives the actors larger than life personas making them stars enjoying a fan following either local or international not rivalled by any other video medium. Theatrical exhibition is unique combination of prime real estate, good content and in house dining which has been the defacto standard for long. The current pandemic has hit hard. With real perceived threat of being conduits of infection either through close contact, the air one breathes in air conditioned places, they were the first to be shut down and they still remain closed. Filmed entertainment suddenly found itself without an exhibition vehicle with some digital alternatives but not equal to the style, panache and the financial feasibility of a theatrical release. The lockdown and the pandemic will ease with time and a vaccine sometime in the future but will the theatrical business come back to its preeminent place in the chain, may not be a certainty, specially with fear still pervading the consumers mind. The ticketed live theatre and live events whether sports, music or other content are affected similarly as the theatrical films business. Risk of infection, fear surrounding the same and the fact that the facilities are closed is likely to change this business, the question remains for how long and whether there are any alternatives.

If one were to look at the precedence,the current disruption and the crystal ball, the following facts become apparent –

1. The theatrical business is still the vehicle that defines enjoyment of content whether it is a film or a music concert or a sporting event. The core is watching the content live, with people as well as friends which may not be replicable with any other mode at present. The experience of watching a movie made on a grand scale needs to be in the theatres equipped to give you that experience with real life like effects and sound systems. Pandemic has put a temperory stop to that experience but unless the same is incurable for a long time, the same will be back bigger and better as soon as the things stabilise. The question should be how does one survive till the pandemic goes away and not whether it will be there in the future or not. Costs of real estate, the cost of the workforce should be the topics to worry on for the theatre owners while the money riding on the content made for this medium and its currency should be content owners worry.

2. While the theatrical release is life blood for a movie content and other live content, the cost of putting up new theatres/screens with access had become a drain even before the pandemic. India has been stuck with around 10000 screens for a while now with new screens not being added in adequate numbers. Digital distribution of content, though not the epitome of grandness has made significant strides in making that content accessible in every home and on every screen big or small. It has been an additional revenue generating platform though not the primary one. With its ever increasing technological features, artificial intelligence and global coverage it slowly has gained precedence. Netflix , is today a highly valued digital OTT platform which is dominating attention of all the large players having bested the capabilies of the traditional TV platforms both as a distributor and producer of content across geographies. Regardless of what our feelings are about the theatrical distribution,digital distribution of movies is an event whose time has come. It may not be apparent for the live theatre or the events but they may not be far behind. It’s possible that these systems will exist side by side but it is starting to happen and will get mainstream with time.

3. Two other changes again which have been on the anvil will now accelerate. The first change will be the merging of the two distribution systems with both theatres and the digital channels releasing content simultaneously or with reduced intervals. It’s already happening in the US with one of the large theatre chain AMC having reached agreement with the digital side for reducing the interval to 17 days from 70. The second change is the rapid rise of tech behemoths first as providers of technology and now slowly as producers and distributors of content. The real change is the strength of their balance sheets and the inexhaustible ability to spend on content. They are the new entertainment moguls and with this disruption, there is all likelihood that it will happen much sooner than expected.

4. While the digital systems still are not completely transparent on the profitability, probably because profitability is not a criteria but domination of market and subscribers is. I believe that here too change will happen and soon. We are already seeing the pay per view models emerging with one having been launched in India by Shemaroo. There will be more

Change has been the only constant and it’s time to realise that the world has changed. Time to change our thinking and actions too to welcome the new world.

OTT play ….is content the only differentiator?

Entertainment has changed with many parts specially distribution rapidly becoming digital in recent times. The current lockdown across the world markets will further hasten the process across all facets of the business. With physical access curtailed, the large venue based entertainment be it filmed entertainment or live events has stalled and the recovery to their pre lockdown business is looking sometime away with restrictions and fear being the big reasons. OTT and surprisingly Television have been the gainers though advertisement the major source of revenue for TV still down in the negative territory.  Filmed entertainment it seems will revive its theatre led viewing in sometime but is slowly starting to consider the digital alternative. The business of entertainment is clearly at the crossroads of change though the demand for good content remains firm.

Content therefore and superlative video content is the new flavour with OTT platforms willing to allot large budgets for the same. Netflix started the trend of differentiated content through a subscription based service which led it to become the numerouno in the valuation sweepstakes though maybe not so on the profitability front. The success of Netflix in attracting subscribers has encouraged a number of other entertainment companies who now have launched their own OTT platforms. Worldwide we have Disney+, Viacom-CBS, HBO and Comcast with Discovery as the latest entrant for the sweepstakes. In addition you have Amazon, Apple and now also Microsoft getting into the act but not only as producers, as aggregators of content too. Domestically also there are number of platforms with strong domestic distribution like Hotstar (now a Disney venture), Sony LIV,  Voot, Zee5 and Eros Now. Each of these players are looking to produce content as everybody has the mantra that original content sells. Content therefore is set to explode with substantial money chasing it. 

While this is good news for the Content producers, I wonder if it is good news for the OTT platforms. OTT  which started of as a mixture of new content and catch up shows to lure subscribers are now increasingly relying on new content as their prime attraction for new subscribers. The number for investment is huge in billions of dollars. The question which now becoming pertinent is that with that kind of investment when and how do the platforms make money? How much of new content is enough to sustain an OTT ? Since most of the OTT rely on subscription and that too monthly or yearly how do you correlate the success of their content to the revenue? Is it a matrix of simple net growth of paying subscribers year on year? What is the role of the content libraries one holds and how does one monetise those? All key questions but not with clear answers, specially when most of the platforms along with a leader like Netflix are still in an investment mode. What is a profitable business model here then ?

New content,many argue,is a must have it but how much? What is equally necessary are the digital systems which allow the customer a choice as well as access. If one dumps reams of content on the subscriber, how is he supposed to make a choice? Video content choice is basically through short trailers where Netflix still has the best technology. We will fast reach that time of content overload and if we still do not have a clear model of profitable existence then the whole industry is in trouble. Volume of content versus watch ability will be the choice. Many believe that future will change ie the number of players will consolidate or there could be different set of offerings for ad led content or subscription led model. Netflix is already beginning to cut the number of titles to reduce overload according to sources. There is also a growing view that companies like Disney plus or Comcast have better chance of success than pure play OTT which have other businesses like Content or Parks in this instance.

While content clearly will the central theme, the successful digital model is still a mystery. Therefore welcome to the world of uncertainty in the digital world!

There is a hole..in the Advertisement Pie!

If one follows, tracks or works in Entertainment and Media (E&M) businesses, one knows that they need to follow the trend for advertisement to know how the sector is doing.  Understanding advertisement revenue and forecasting its trend line is the gold standard in managing E&M businesses worldwide. While other forms of revenue do contribute but clearly it’s the advertisement revenue which is, has always been and will be the key for the foreseeable future of this business. This is not the only determinant of health of a successful business, the other key determinants being content as well as distribution. Excellent content and distribution sometimes also cannot save the business in an advertisement downcycle. What is behind this revenue stream and why is this important? Also why this discussion today??

Simply put, E&M businesses have in general two key streams of revenue ie Adverisement or Subscription which also includes your cost for ticketed events like movies or events. A large part of the business is advertisement led and that includes businesses like print-both news as well as magazines, OHH, TV, a large part of events and now a large part of digital streaming too though subscription does contribute on the digital side. Therefore the advertisement trend line for this revenue stream is very important for the media businesses across the world. The world has been lucky except for thr stock market crash in 2008/2009 to have witnessed a steady growth in this revenue trend line across the years. An average growth between 3 to 4% across the world has been the norm with countries like India,China and the Middle East being the new developing markets clocking 10 to 11% growth on an average. Well, then COVID 19 happened, the world and all businesses closed and now it seems the good run is about to terminate! All advertisement related businesses are under a massive threat in the short to medium turn. There has been and there will be a massive turn towards digital but the revenue shortfall may be substantial. There are already reports that suggest that giants like Google, Facebook and Microsoft which are digital have also lost upto 20% in advertisement revenue in the current crisis. Some thoughts as follows on the extent of the problem, when can normal return or whether there is likely to be new normal..

Advertisement in general has a strong correlation with the GDP. The different rates of growth have aligned with the GDP of the countries and are always a couple of points higher than the stated GDP. When India grew at 7 or 8%, the growth in advertisement was between 9 and 10%. This is natural as the key advertisement dollars come from the health of the underlying businesses. Key sectors which largely contribute to the advertisement are Auto, FMCG, Real Estate, Education, and other sectors where brand is key. India was on a brink of a decline in many of these sectors and the COVID 19 lockdown is likely to increase that stress manifold. There are various versions on the recovery after the lockdown, but none of them are optimistic or give a sense that things will be back to normal soon. Some industry insiders feel that the year 2020/21 will see a negative growth in the traditional media while digital media will be at par or with a small uptick of a couple of percentage points if we are lucky. The overall pie will certainly be smaller. Macros presently do not look good!

What lockdown has done is put the focus on the digital capabilities of the business. Our dependence on the Internet and data has gone up manifold whether it is to communicate, entertain ourselves, buy and sell goods or get information. I’m afraid that this dependence will be inculcated as a habit post lockdown and with increased suite of services will start to replace some of the traditional way of doing business. Advertisement also tends to go where the eyeballs shift as it is the nature of the beast. Therefore largely physical businesses like newspapers, magazines or other parts of print will possibly see an accelerated shift of its key revenue stream to digital. Coupled with strained distribution chain their ability to attract new readers will also be under question. TV and broadcast has kept its viewing intact initially though the parts of the broadcast businesses are likely to be impacted with no fresh content and the uncertainty when that will be normalised. News broadcast businesses have seen a new lease of life but it is difficult to judge for how long?

Digital distribution of content will be possibly the new mantra for the E&M businesses, with good content being the only imperative. One assumes though that the large advertisement dollars once the economy recovers will be directed to digital rather than physical mediums.  However this assumption is also tenuous as value wise the digital piece is still far less remunerative than the traditional media with virtually very little data as well as impact assessment available for rational decision making. One cannot therefore say that it will only be digital in future as I think there is still sometime both will coexist. However what is certain is that near term assessment for advertisement led businesses is not good and that the shift to digital will accelerate faster than ever. 

The earlier we come to terms with the above reality the better as the pie does have a hole!!

Content, yes but economics?

Content is no doubt the key to hold the audience attention. The demand for video content with the proliferation of TV, OTT and other platforms vying for consumer connect is set to boom. Therefore and rightly so access to content is key to any successful venture in the Entertainment and Media space.

The expansion in the content marketplace has not only led to new content producers but also significantly added to the quality of content that would be availiable. Platform players while they would be happy with more productions will also have to contend with higher cost. Producing content both for web series, short movies and movies for OTT is vastly different from the massy advertisement led content produced for TV at least in India. Therefore the content costs have risen or are set to rise exponentially over the next few years. Without the comfort of advertisement and the level of subscriptions low and not growing in tandem, is the industry in danger of outspending itself into oblivion?? Problem is very real with only a likelihood of a few winners and many losers.

The Producers on the other side are likely to multiply as they sense a lucrative opportunity over the next few years. With platforms like Netflix , Apple,Amazon, Hotstar , MX2, budgeting huge amounts for acquisition of content it’s clearly boom time.

However Indian content houses have typically done TV content on a cost plus basis and that too massy as well as not of particularly high quality. To improve and deliver in the new world will require origination skills besides pure production not to mention the ability to sell. Much of the value for content lies in their IPR’s which presently are not retained by the content producers. They will need to keep that in mind if they are to create wealth for their stakeholders.

Will be interesting to observe how the business models develop. However both the platforms and the content producers will have to work at the ‘Economics‘ to create value!

OTT – the new normal

The entertainment world is changing at a very rapid clip. With the launch of the Disney+ service the world of OTT is truly coming to the fore. With its bundle including Hulu and ESPN for sports it surely is great content package at a attractive price. The market will also see launch of two other OTT packages being launched soon one with HBO as integral part and the other being the CBS/ Viacom offering. In addition we have Amazon Prime, Google as well as Apple Play. Stage is therefore set for a very interesting and a bruising next year where Netflix is likely to be challenged like no other time. Traditional platforms are taking a backseat for time being.

India which rapidly increased its offerings in the OTT play is also likely to see significant activity. If one is to believe a recent survey Disney owned Hotstar owns pride of place on the top having 40% of the market with Amazon and Netflix bring up the next few aspirants. There are a host of other players – Voot, Zee5, Sony Liv, Eros, Mx player and Jio as a consolidated play soon in this space. Many others are in the planning stage. Presently with Sports content specially cricket Hotstar and Sony Liv seem like preffered OTT plays. But things can change…

Content and AI capability will possibly be determinants as to who wins the platform game. But guess who is already the winner? Yes – Content and Content Providers are the real winners. With billions of dollars being planned for acquisition of content there has not been a better time to be in content business.

The other winner is us – the Customers! Hold onto your seats as you are in for best of content that will be on offer. You have a choice befitting a king and with a reasonable cost.

Ofcourse there will be some losers as there are in every sphere. The traditional cable companies and DTH player seem to be now but there will be more. The peak tends to be narrow and only a few will get there. For now let’s enjoy the ride!

Why it’s not ‘News’

Electronic medium has not been very kind to the business of ‘News’. There are roughly 200+ channels in probably all mainstream and regional languages on the menu of the Indian consumer today. Consumption of news is growing and yet a significant number of them face challenges, in terms of content choice, distribution and finally economics.

News ,the mainstay of Print media,has always been advertisement dominated with a very small subscription charge which was largely to cover distribution costs. The broadcast version followed a similar model with all the channels being advertisement led. With more channels in the fray most of the channels have difficulty in covering distribution costs which is largely placement cost in key markets where they expect to be seen. The  viewership is essential to attract advertisements. Also unlike Print medium, English is not the preferred mode of consumption and the preference is more for Hindi or regional languages,therefore the offerings being more vernacular led. In addition the TRP system for Ad rates, has not been kind to the News offerings. Broadcast model therefore has had and continues to have challenges as a profitable model. This in turn has affected the the quality of content which in some cases has been reduced to the lowest common denominator in order to attract viewership and hence advertisement. The rise of the online and digital delivery medium is further hastening the demise of the broadcast model. Clearly very few channels are surviving on positive cash flows  from normal business cashflows but rather from strong backing of either business groups or political interests who want a voice to be heard though not necessarily a fair voice! News will survive but whether the broadcast version will survive in its present form is the question?

‘News’as a genre is per a general view is not going anywhere. It’s distribution formats may have changed  from print to electronic and now digital but its consumption continues to grow. Print still continues to grow as well as sustain in India and electronic broadcast news will also be there. The ability is then to choose and present the right content for the right distribution format. While there is lot of talk of anytime, anywhere content and personalisation the appointment viewing is still very relevant. It’s good to go back to your content and see what can be categorised as Breaking news and what is more detailed,what is entertaining and finally what is an opinion. Each of these types may be good for a different type of  distribution and a future news company needs to have all the mediums at its disposal. All these different types need to feed into a single brand where some content is free to air and some on subscription.  Lastly the ability to present content free from apparent bias is the key regardless of balance sheet or other requirements.

‘News’ is too important to be no News!!

Changing Dynamics

India is one of the very few countries which boasts of a thriving M&E marketplace. We have local content, distribution and are technology proficient. The M&E marketplace has also grown and has high growth potential for the future. That is the reason India has always been attractive to the Hollywood fraternity though their success has not been complete. Guess it has to do with understanding the palette of Indian consumer and acceptability of such content outside India to Indian as well non Indian diaspora.

However there is now a subtle change on the horizon. Coming of age of the OTT’s and conscious type of content sought to be created is certainly creating a market which will go beyond Indian shores. Hollywood studios have discovered their mojo as has been with the success of last instalment of ‘Avengers’. More will follow surely.

More important change is also the fact that India is mass of humanity which being linked with cheap internet is prime market for all key consumer activity. Creating and distributing content for this market is key for some of the large consumer as well as social media giants. Lastly dubbed content regardless of origin is beginning to find acceptance taking away the isolation of the Indian consumer.

Brace yourself for a changed market not only for consumers but also for local industry. We need to inculcate a world vision, a possibility of much larger budgets and good stories which transcend borders. If the Indian Industry does not counter and make itself relevant, Hollywood will!

Interesting times ahead !!

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