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FICCI Frames: Internet has increased distribution pipe but lacks monetization

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MUMBAI: India is going through a sea change when it comes to content and technology and the country is still grappling with the changes. With sudden boom of multiple distribution systems, the internet and satellites have started playing a larger role in distribution of content. The traditional distribution system has also undergone change and this is not only in the area of production and distribution, but also in the space of marketing.

With the increase in the number of distribution platforms, what the country is witnessing is convergence of businesses. “While we have been talking about convergence in telecom and entertainment for over two decades, it is now that we see it is becoming more relevant,” said Department of Telecom, Government of India special secretary Rita Teaotia in her opening remarks, on day two of FICCI Frames 2015.

According to Teaotia, one of the most important feature of convergence is the heightened significance of the internet in actually delivering content. “This has led to increased choices to consumers, which in turn has led to changed consumer behaviour. They are no longer captive audience,” she said, while addressing the keynote for the session ‘Dancing or Dueling? – the Interplay of Content and Carriage in a Converged World.’

Convergence has also seen a fragmentation around the value chain. While there are a number of players, including the telecom, cable TV, broadcasting stations, equipment vendors, content distribution owners, content owners among others, one can see blurring of boundaries of those in the value chain.

Teaotia pointed out that the huge explosion for demand of data had led to the transformation of existing networks. “So broadcasters are looking at broadband to offload content, mobile networks are converging with fixed networks and alternate platforms are being developed to speed up the process of delivering content,” she said, adding that there was increasing competition between mobile, fixed network operators and broadcasters for content delivery.  

With convergence has come challenges. “One of the major concerns is how to respond to the new regulations and regulatory challenges emerging from convergence and ensure that customers continue to obtain full benefit of the emerging technologies,” questioned Teaotia.

While traditionally there has been a clear division for regulation of telecom networks and broadcasting content with separate regulatory regimes, content regulation has been focused largely to address movie and TV content over traditional broadcasting platforms. “The blurring which we are seeing now of the vertical supply chains for production and delivery of content and new business models for monetizing it have generated new and complex regulatory issues and questions about how effective our current regulation are,” pointed out Teaotia.

Content Monetisation in Converged Environment

Even with more and more content being distributed using different pipes, there is little or no monetization opportunity in the country. “Monetization is still a suspect in the short term, in the long term we have to see how traditional media evolves in India. The big money is still in traditional media and if you want to monetize the content, you will have to rely on traditional media,” said Indiacast Media Distribution group CEO Anuj Gandhi.

According to Gandhi, the industry needs to evolve. “We need to get a structure to the windowing business we do. Everybody will need to have access. As we see more screens and content, we will have to monetize the content on each window opportunity and I think that will become a reality,” he opined.

The industry, needs to come up with a formula for clever windowing. “The west has done it effectively where consumers pay a premium to watch content first and then the cost keeps coming down with advertisements,” pointed out Gandhi. 

India: A Global Entertainment Superpower

With the huge amount of content being created in India, IT industry establishing a strong footprint globally with almost 55 per cent market share globally and the entertainment industry growing from Rs 1 lakh crore in 2014 at 40 per cent to Rs 2 lakh crore by 2019, India is right on the path of becoming a global entertainment superpower. However, while this seems a very natural ambition, is it that simple?

Answering the same was NASSCOM president R. Chandrashekhar. “With convergence, there is blurring of lines between businesses. But with this, you have to worry about competition not just within your business, but from other businesses as well, which can wipe out everything,” he said.

The advent of internet as an extremely dominant medium for distribution of content, has lowered the many barriers that content producers faced in the past to distribute their content.

According to 9.9 Media CEO and founder ISB Ashoka University founder Pramath Sinha, convergence has helped in bringing down the barriers to distributing content. “Not only this, it has also led to lowering of the cost of distribution,” he said.

Chandrashekhar, however said that while distribution of content has become easier, its discovery in the huge space could be a challenge. “We need to find out who the gatekeepers are who are standing between finding that content and how is interplay between the gatekeepers being managed,” concluded Chandrashekhar.

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