Ongoing digital transformations are progressively catalysing the move towards penetration of mobile entertainment in India, says the author
The author, Gaurav Sahni, is General Manager of Marketing at DigiVive Services, which focusses on creating offerings in line with evolving trends, best-in-class content, ease of use, mass availability and affordability.
Wikipedia defines ‘entertainment’ as ‘a form of activity that holds the attention and interest of an audience or gives pleasure and delight’. So very apt, but nowadays another keyword is rapidly becoming part of this definition – mobile.
Mobile has become the new mass media for information, supplanting traditional media channels, even the Internet. This is starting to bring about an inevitable transformation in our social, demographic and psychological work environment — impacting usage and consumption in varied ways. Going forward, mobiles — especially smartphone — are expected to become the main drivers or carriers of all kinds of information including entertainment.
Rise of OTT and mobile video
Like in the rest of the world, ongoing digital transformations in India are progressively catalysing the move towards penetration of mobile entertainment (including 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.
This explosive growth of smartphones in India over the past couple of years indicates the keenness of the 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 indisputable case for mobile entertainment, fuelling enthusiasm of content players and consumers alike.
In fact, 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.
With data consumption outstripping voice traffic on networks and growing in an unprecedented manner, the demand for content availability over multiple platforms such as mobiles, tablets and laptops is creating new opportunities for content owners, providers, publishers, communication service providers as well as technology providers. They 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 stabilising, Internet access has revolutionised the entire over-the-top (OTT) business ecosystem, not only creating new businesses but also newer ways of working. These have opened up innovative revenue streams even for existing ventures.
OTT video – a prime example – is growing by leaps and bounds, aided by growing consumers’ push to consume video anywhere, any time and on any device. These developments are not just affecting existing industry dynamics and setups, but also throwing up new challenges that have the power to format 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, complemented by enhanced data usage on the networks.
The way forward
Industry participants including providers of services, content, publishers and broadcasters alike have started to realise 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 pipelines.
With mobile emerging as one of the most effective and truly personal advertising platforms, companies are devising newer strategies to target and engage audiences via innovative and programmatic formats which are increasingly becoming self-learning or intuitive.
Aside from social networking, mobiles 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 targetted communication while promoting their apps.
Challenges faced by mobile
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 mobile as part of their cross-channel strategy.
The question about having an ideal monetisation framework that splits available revenue evenly between all players remains unanswered. In order to monetise this 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 programme, especially in Tier II, Tier III cities and beyond, for an entertainment-starved populace.
Much like this industry, creation of a progressive and simplified regulatory framework that facilitates content-sharing, boosts access to mobile entertainment. It also ensures a level-playing field for all, which is 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 realising that creation and distribution of quality content is expensive. Subscription, therefore, appears to be a viable mechanism and is 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 monetisation structure is a thing of the future.
The views expressed here are of the author’s, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, please send us an email at writers[at]e27[dot]co
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