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Mobile Video Monetization: The Way Forward

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Players in the delivery ecosystem must start collaborating to increase the size of the market; Simplified regulatory framework that facilitates content-sharing needed.

Digivive’ flagship, award-winning application nexGTv offers users entertainment across multi-screen devices, be it mobile, tablets or laptop/PCs. The choice of entertainment is a suite of movies, Live TV, TV shows and videos. Besides ranking among the top 10 entertainment applications in App Stores, nexGTv has also won ‘The Best Digital Experience’ award at the prestigious World Communication Awards 2014, at London. It runs seamlessly across 2G/EDGE/3G/4G and Wi-Fi networks across platforms such as Android, iOS, BlackBerry and Tizen, enabling consumers to remain entertained irrespective of bandwidth limitations and operating platform. Digivive’s General Manager of Marketing Gaurav Sahni shares his perspective about monetizing one of the most exciting mediums  today – mobile video.

Rise of OTT and Mobile Video

Wikipedia defines ‘entertainment’ as ‘a form of activity that holds the attention and interest of an audience, or gives pleasure and delight’.That definition is so very apt, but nowadays, another keyword is rapidly becoming part of this definition – i.e. mobile. It’s increasingly becoming the new mass media for information, supplanting traditional media channels, even the internet, which is starting to bring about an inevitable transformation into our social, demographic, and psychological work environment, impacting usage and consumption in varied ways.

Going forward, mobiles and more especially smartphones are expected to become the main drivers or carriers of all kinds of information including entertainment. Like in the rest of the world, the ongoing digital transformations in India including access to mobile internet are progressively catalysing the move towards rapid penetration of mobile entertainment including audio and video (includes Live TV, Video on Demand, TV Shows, Movies, etc.). However, growth in mobile video is expected to far outstrip the growth in mobile audio. In fact, reports indicate that mobile video is expected to form nearly three quarters of all mobile data traffic by 2019. A recent Ericsson Mobility report highlighted that India showed the fastest growth in net additions to mobile subscriber base followed by China. Current IAMAI and KPMG reports indicate that India will have around 236 million mobile internet users by 2016, and 314 million by 2017 which echoes reports from other sources.

The explosive growth of smartphones in India over the past couple of years indicates the keenness of Indian audience to stay abreast and embrace the latest digital trends. Social media,  content sharing, e-shopping and permeation of 3G networks together with steps undertaken by  telcos to launch 4G have created an undisputable case for mobile entertainment, fuelling enthusiasm of content players and consumers alike. In fact, a lot of industry experts expect 4G to be an inflection point for mobile video in the coming years. Rising incomes, including a proportionately higher spend on entertainment is expected to be supplemented by an increase in internet-enabled devices, cheaper handsets and availability of affordable data plans.

According to industry reports, mobile video traffic exceeded 50 percent of traffic for the first time in 2012 globally. With data consumption outstripping voice traffic on networks and growing in an unprecedented manner, demand for content availability over multiple platforms such as mobile, tablets and laptops, is creating new opportunities for content owners, providers, publishers, communication service providers as well as technology providers, all of which are now working to not only understand, but also leverage these radical changes for business growth and consumer benefit.

With service provider owned data pipelines stabilizing, internet access has revolutionized the entire Over-the-Top (OTT) business ecosystem, not only creating new businesses but also newer ways of working that have opened  up innovative revenue streams even for existing ventures. OTT video - a prime example is growing in leaps and bounds, aided by a growing consumers push to consume video anywhere, at any time and on any device.

These developments are not just affecting existing industry dynamics and setups but throwing up new challenges that have the power to format entire media, mobile, entertainment, regulatory and content ecosystems. While the Indian OTT market is comparatively nascent, it nevertheless holds substantial promise for both free (ad-supported) and paid (subscription-led) services, given the rising smartphone penetration in most cities, citizen and subscriber mobility, complimented by enhanced data usage on the networks.

Monetizing Mobile Video: The Way Forward

Industry participants including providers of services, content, publishers and broadcasters alike have started to realize the potential of mobile TV and video. For content owners and broadcasters, OTT means new distribution opportunities, opening avenues to expand viewership and revenue both via paid and advertising models. For service providers, OTT creates a new revenue generation opportunity by ensuring delivery of entertainment at the last mile, using their data pipes.

With mobile emerging as one of the most effective and truly personal advertising platforms, companies are devising ever newer strategies to target and engage audiences via innovative and programmatic formats which are increasingly becoming self-learning or intuitive. Aside from social networking, mobile are the ‘media of choice’ for online bookings, financial transactions, shopping, essential services, entertainment and even employee communications. Tech companies are increasingly using such platforms for targeted communication while promoting their apps.

However, like all industries, the rapidly evolving mobile video domain in India is also facing its own set of emerging challenges. As competition over viewers, advertisers, eyeballs, content, pipelines, hits, and subscriber lifecycles intensifies, lack of consensus over reporting metrics, pricing, formats, network quality of service (QoS) and likely revenue share serve to dampen an otherwise spirited and expanding market. There is also uncertainty over choosing mobile web or in-app channels for meeting advertisement targets.

In spite of the above concerns, mobile video has proven to be highly successful in several markets, delivering higher user engagement on mobile devices. Of late, advertisers have also started to embrace video advertisements on the mobile as part of their cross-channel strategy.

The question about having an ideal monetization framework that splits available revenue evenly between all players however, remains. In order to monetize the opportunity, content owners, broadcasters, aggregators, publishers and service providers need to start collaborating to first define and increase the size of the addressable market. With television and cable transmission going digital, there exists tremendous scope of expansion under the framework of the Government’s digital inclusion program especially in Tier 2 and 3 cities and beyond for an entertainment-starved populace.

Much like the Cable and TV industry, creation of a progressive and simplified regulatory framework that facilitates content-sharing, boosts access to mobile entertainment, and ensures a level playing field for all is also a critical need of the hour. While ‘content’ is increasingly regarded as King, the industry is rapidly realising the role and importance of every other player including aggregators, advertisers as well as bandwidth owners or service providers to ensure the creation, curation and delivery of a complete and immersive mobile entertainment experience.

Additionally, while advertising has been and remains a proven mechanism to earn revenue or recover cost, players in the digital and mobile ecosystem as well as end-consumers, are increasingly realizing that creation and distribution of quality content is costly. ‘Subscription’ therefore, appears to be a viable mechanism being slowly embraced by industry players.

To each his own seems to be the short-term mantra and while one can see the entire category being rife with innovative business models, an ideal or near perfect monetization structure seems to be sometime away, given the proliferation and abundance of not just content, but also mobile TV apps, together with a consumer base that is highly fragmented and keen on ‘digital snacking’.

The information shared, views and opinions expressed in this article are those of the author and do not necessarily reflect the scope of knowledge and views of The Indian Television Group, its affiliates, or its employees.

 

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