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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 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!!

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 !!

Entertainment Content- always a winner

Content and more specifically entertainment content has always enjoyed a large following across the world. Such content though enjoyed through different mediums across times holds one’s attention and therefore has been key to sales of products, ideas and concepts. It has been used since time immemorial as a bait for congregation of communities upon which sales strategies have been built.

The world may have changed but the importance of entertainment content has not changed. In today’s tech enabled environment you still need good entertainment content as a reason for congregation for sale of a concept. Disruption is evident in almost all areas of our existence but what has not changed is good quality entertainment content!

This in part explains why the likes of Apple ( sale of equipment ), Amazon, Microsoft, Google are getting into content. One difference though with regard to budgets behind ,the same being huge. Congregation, experience and good content are the key words though the medium of delivery will continue to change.

Content owners and producers like ‘ Disney’ have everything to play for. Question to ask is how they play in this changed world? Tech players though good facilitators are not creative players and at the moment they are on course to own every facet to their strategy with their money power!

Heart says that Independant Creative content producers are a necessity but then the reality about to unfold may be different. However ‘ Entertainment Content’ is not going anywhere..

CONTENT – the new thought process


Content was always King and of recent times is the key thought process for business strategy of the future. The reasons are many primary being the technological advances in the distribution platforms and the humongous investment required to really succeed in a platform business whether it’s a broadcast network or an OTT. The key to success is increasingly being recognised as the ability to distinguish oneself which is largely through distinctive ‘Content’. Its distinctive content through its development and ownership which will provide value to enterprises over a long period of time. Not to say that distribution and platforms will lose relevance but they are subject to change and that too rapidly as we have seen in the recent past while Content seems always in demand.

Platforms both outside as well as in India because of their distribution muscle invested very heavily in content. Platforms and content therefore became synonymous leading to the demise of independent content owners except for a company like Disney which over the years has proved as to how best Content should be monitized. It continues to be among the highest valued companies in the entertainment space largely due to its content IPR’s. Time has come to unbundle the content from the platform and that many believe will be the saving grace for the entertainment businesses.

However it’s easier said than done. In India for example most of the content producers are either film producers or content contractors who produce content on a cost plus basis either for the local TV networks or now the OTT platforms like Netflix or Amazon. Film content where content ownership is common has inherently better quality than the TV content.Content with the IPR rights without being pre sold is considered a huge risk and expensive. Even the biggest content producer Balaji has been very cautious and selective in producing such content. Therefore the content which is produced is rarely exceptional as it caters to the lowest common denominator which attracts the advertiser. While everybody understands that this has to change, is there then an effort being made toward this objective ? My sense is that yes but very slow. Applause Entertainment headed by Sameer Nair is making that change and his future success will probably set of a trend.

Content and quality content requires investment in story writing talent and marketing as well as syndication ability. These skills along with cash investment can then change the way entertainment assets are built. There is lot of interest at the moment but not adequate investment. Hopefully the future will change!!


It’s not only the year that is about to change but the whole paradigm of Entertainment business where change is imminent! We and many others have spoken about this in the recent past but the pace it is happening is certainly a surprise. Entertainment and Media businesses were rather simple businesses largely relying on content and funded through either subscription or advertisement. The business model lasted many decades till the strides in technology caught up and changed it irreversibly. Technology made it possible to consume content in any form, anytime and anywhere. With new capable devices and mobile the modus operandi of consumption had changed forever. However what has lagged behind is the ways and means of monetising that content which is benchmark of economic performance of all such businesses. It is changing now though understanding this change and recreating business models is challenging to put it mildly!

It is not only the business model that has changed, the change also becoming apparent in rise of new kind of Entertainment giants who it looks will dominate the Entertainment and Media Industry for the future. The holy grail of entertainment companies is rapidly being replaced by a new breed which is flush with funds and is very capable in technology. Whether they are content giants like Disney or distribution giants like Comcast or AT&T, statuesquo has ceased to be an option as they plan for the next decade. Their imposing size, their domination of access, their libraries, are all under threat. They are all on a sharp learning curve and their actions demonstrate that they still do not understand the impact of all these changes. Some are vertically integrating for size while others for content and some consolidating across markets. Is this going to be enough??

As we try to answer that question, one needs to understand the change. One fact which is apparent is that our consumer has changed. He is mobile, a little lazy, more connected, wants everything free and is interested in experiences. The changes in technology has given him the taste of what is possible and he wants it. Also his regular haunts where he congregated ie a movie theatre or a TV screen for that matter have also changed. His regular haunts are now the social media sites or the search engines or the e-commerce platforms which now interest him. Therefore this new consumer definition has a new service provider in the form of Facebook, Amazon, Google and Netflix. These providers have cash, are not in a hurry to make money and provide the ideal congregating ground. This what the traditional companies are up against.

Very difficult to say as to what strategies each of the companies will take to meet this challenge though one thing stands out. There is going to be a continuing and substantial demand for CONTENT! That’s possibly where lies the salvation of the Entertainment companies – what do you think…..??

CONTENT – Is it still King?

Content has been and will be at the heart of Entertainment or Media businesses. The business models for these businesses have always been about monetising the Content. Though Content is still the heart or the key product of these enterprises, it’s form has undergone a change largely because it’s distribution as well its modes have changed. Video now is the preferred form of content, largely because it’s distribution is possible worldwide through advances in technology manifesting itself in the Internet reach. With wireless technology and mobile devices content can now be consumed at anyplace and anytime. This in a way has increased reach but the industry still has to come up with a way to monetise this reach. Also some of the older methods of distribution are bordering on the extinct specially the Print industry while current models on satellite as well as fixed time viewing are also under threat. In other words, E&M businesses worldwide need to rapidly  change to safeguard revenues and adopt the new world order.

The other significant change in the E&M world is the rise of tech companies who initially started as the necessary adjunct for the distribution of content but have now become not only distributors but key buyers as well as producers of content. Also since some of these companies are social media giants or key device makers or large online retail enterprises,they have natural congregation of communities which in turn is fueling their quest for Content to attract customers. Not only are these companies making as well as acquiring content but are slowly becoming reservoirs of large advertisement revenues in the digital world which was once the preserve of the large entertainment and media conglomerates. Nothing demonstrates this better then when you look at the market caps in today’s time when a Google and Apple is valued at $1 trillion while the largest of the entertainment giants do not go beyond $200 million. However Content is still key for their survival.

In the changed word order, one can reason that for the Entertainment Companies even with the onslaught of tech giants,Content remains their key survival plan. Premium exclusive content is still and will always be a winner. It is the only arsenal to be close to the customer. While advertisement may take a hit, subscription is the way to go. Success of Netflix is the case in point. One can conclude that ‘Content like always will be King’.

FICCI FRAMES – a Partnership Extraordinaire

The nineteenth edition of ‘Frames’ concluded last week in Mumbai. While I could not attend it this time, with all that we read in the press , it seems like always to have been organised well, attended well with a generous presence of the industry, the government as well as the partner countries. ‘Frames’ and ‘FICCI’ have had a special relationship with Entertainment & Media industry in India, and have been significant in bringing to the fore to the world as well as India, the business potential of its greatest expert ‘Bollywood’. It enters its 20th year soon and to me who has been involved with it for some length of time , its good to discuss its importance to the ‘Entertainment & Media  Industry’ in the past , its relevance in the present and do a little dip stick for the future.

The Start

Early Nineties saw India opening its doors to the world for doing business. By initiating one of the most significant reform process, India opened the door for foreign investment to a large number of sectors barring a few, resulting in a large interest by the International community looking for growth as well as new markets. The more organised business sectors like Manufacturing as well as Services led by IT were the first to take advantage of this liberalization. Sectors like Entertainment & Media which at that time largely consisted of Print and Films and to some extent music could not take advantage due to restrictions on ownership as well as being an unstructured industry with very little   information. Advent of ‘Satellite TV’ in the mid-nineties, which now is around 50% of the industry prompted the change in regulation to garner new investment in uncharted but very promising new territory. FICCI as India’s premier trade body through its Director ‘Amit Mitra’ (now the Finance Minister of West Bengal) and the E&M committee having as its chairman Mr Yash Chopra, Mr Amit Khanna and other E&M Stalwarts realized that in order to attract investment India needed to showcase its market potential, talent as well as potential partners to the investment world as well as E&M world leaders. ‘FRAMES’ was born out of this thought process and need.

Journey Thereafter:

‘FRAMES’ eversince instituted and even today remains one of the best events for the Entertainment & Media Industry in India. It has consistently reinforced its founding objectives which primarily was to be a forum/ platform  for :

  • Showcasing the Indian E&M industry potential to the world.
  • Showcase Indian talent and services
  • Showcase new innovations in the industry.
  • Promoting partnership between Indian companies and companies in developed E&M markets.
  • Industry information of its different variants as well as their growth potential through FICCI FRAMES annual report.

   Each of the key E&M companies both Indian as well as International have been a part of ‘FRAMES’ and almost all of the service providers/consultants have helped develop the information that FICCI FRAMES helped create as a benchmark for the industry and its constituents. Each of its event editions (including regional) over the past 19 years have had top government involvement, excellent discussion formats with world experts and have helped discussions on many of the partnerships which developed over this period. It has also provided the industry constituents the platform to have a constant dialogue with the government on the changes which this industry faces everyday.  It was always a priviledge to have one’s name in their annual report and to be part of their inaugural session as well as their other sessions.

Despite all changes the difficulties it has persevered and one needs to congratulate the continuing FICCI team behind this endeavour.

The Future:

 The Entertainment & Media industry worldover is in the throes of a major change. All accepted business models are under threat and the very existence for some of them is under question. Therefore a concept like’ FRAMES’ still hugely important but its objectives need to change with the times. Closer linkage of technology with entertainment becomes paramount when your distribution is likely to be technology led and Artificial Intelligence (AI) is likely to be playing a significant role in the future. ‘FRAMES’ need to evolve to the following.

  • being a premier platform for showcasing new trends & technology in Entertainment & Media Industry.
  • being a key interlocutor between the Industry and the Government of the day.
  • focus to being a platform to represent change in business models in addition to have focus of saying where growth is going to come.

Evolution of ‘FRAMES’ in many ways is happening and is an ongoing process. However it does need to step up to claim the mantle of the ‘Interlocutor’  as that is something the present E&M industry setup is missing. As it matures, this role will acquire major significance.

Let the new ‘FRAMES’ unveil the new partnership as  the Entertainment & Media Industry walks into a ‘new’ chapter of its evolution.

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