‘We aim to provide participants consulting projects and challenges that will equip them to tackle future assignments confidently and competitively. We also aim to facilitate growth of collective knowledge of the entire student community interested in the Consulting and Strategy domain. This magazine says it all. In this issue of the the digital conteStrategist we have emphasized on Media and Entertainment industry, which is witnessing a shift in how people consume and view the content. We have tried to cover the topic in an exhaustive manner. We hope you enjoy reading this issue of the Strategist as much as we enjoyed creating it.’ -Team ConQuest
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CONTENT O4 O6 11 13 16 18 21
Editor’s Desk Team Conquest
Disruptions in Media and Entertainment Industry – Digital is the new normal. Himavanth - IIM Amritsar
Media And The Entertainment Industry Akshay Sharma - SCHMRD Pune
Transforming the legacy entertainment industry through digital revolution Rohit Dudi and Sankalp Panda IIM Lucknow
Challenges facing Digitalization of Media and Entertainment Industry Sai Krishna Mantravadi - IIM Shillong
Digital technology foray into the entertainment world and its impact on marketspace Deepati Vijay Prakash - IIM Lucknow
Corporate Interview - Mr. Mihir Modi
Team Conquest
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FROM THE EDITOR’S DESK TEAM CONQUEST
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EDITOR’S DESK Strategist In this edition of the Strategist, we take a look at the impact of digitalisation in the media and entertainment industry. Almost all the industries have been impacted positively by the use of digitisation and the entertainment and media industry has been no exception to this. It is this digitisation that has helped in breaking new barriers and creating more significant grounds to play. Since the advent of mobile technology, television, radio and newspaper have taken a backseat just like the internet has transformed the Media & Entertainment industry. Several phenomena like “second screen” has made sweeping changes to the way users watch television. The second screen is the laptop, mobile or tablet that is used in between programs or commercials by television viewers. Some of them have ensured that the advertising process is getting better with augmented reality and Artificial Intelligence. It is also expected that soon we will see applications of virtual reality and mixed reality. If we talk about spending on Artificial Intelligence alone, it is expected to become 100 times in 2025 of what it was in 2015. In a new wave of computerhuman “collaboration,” companies are already using Artificial Intelligence to create effective movie plot points based on box office performance and create movie trailers. Indian media segment is expected to show a growth of 13.9 per cent by 2019, and one primary reason for this growth is the young audience, which is consuming media at their own pace and convenience. This generation has been fortunate to witness a sweeping change in the way media and entertainment are consumed. This segment shares content across platforms and puts their views across on social media. The growth surge started in 2015, and it is expected to accelerate further because it can provide content on demand. It has forced the industry to rethink older business models and paradigms of entertainment generation and revenue generation across all the verticals.
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DISRUPTIONS IN M
ENTERTAINMENT IND
DIGITAL IS THE NEW
ANATTA GREY 6
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MEDIA AND
DUSTRY
W NORMAL Himavanth IIM Amritsar
From getting the morning newspaper to late night soccer score every bit of information/ content is changing in the way it is reaching its audience and so is the industry which is generating the content. Digital disruption has left no industry untouched – Media and Entertainment is no exception. This change is driven by both the consumers’ expectation for faster, engaging and rich content as well as the companies’ need to reach a higher number of audience in as many ways as possible. More importantly the distinction between different forms of media is disappearing with everything turning digital. For example, a news report now contains everything - video, audio and text. Various ways in which this disruption is affecting the industry can be understood through:-
Digital Technology Digitization is now at such a level that the boundary between technology and media is blurred. Technology is a very broad term to understand the changes being brought about in the Media and Entertainment industry. Let us, therefore, try to look at it from two different perspectives – Content generators and Audience. Traditionally the newspaper, radio or TV sets were the primary medium of making content available to consumers. However, with increasing sophistication, changing tastes and intense competition, media companies have started looking for ways to make their content more attractive and accessible (not for free though). The internet provided the most suitable platform. From the traditional studio, broadcast and distribution model content houses are now moving towards direct outreach programs in
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form of direct streaming and personalised services and thereby cutting distribution costs. Also with increased penetration of hand-held devices (mobiles and tablets), companies are making every effort to make their content available on all platforms accessible from anywhere at any time. Today every newspaper, TV channel and even radio channels have their mobile applications. Also, availability of free video and music editing tools and open software have given anyone with passion the ability to create and showcase their content. Producers also want their content to reach people with minimum or no regulatory intervention in the form of censorship, for which they find internet and streaming services most suitable.
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From the consumers’ point of view, technology has increased the ease of consumption of content. Consumers today demand convenience and no one is willing to dedicate time to sit at home in front of the TV sets and wait for the fixed time for the content to be aired. Given the fastpaced life of today, people want things on-thego. Also, the newer generations have a flair to get cross-cultural experiences, for which they turn to service providers who can give them the taste of such content from different parts of the globe. Artificial Intelligence, Augmented Reality and Virtual Reality: AI will impact the media and entertainment industry in a big way. It will influence consumer choices and will also be a tool to study their preference and tastes. Netflix and Spotify already
use such algorithms to make recommendations on what to explore next. NBC uses targeting tools powered by AI to make their ads more relevant to the audience. However, the use of AI will not just be limited to pushing content to consumers but also to create them. The use of technology challenges the traditionally held belief that creativity is the forte of humans. This is not a thing of distant
future but a less known reality. 20th Century Fox partnered with IBM to create the trailer for its film “Morgan”. IBM’s supercomputer Watson created the trailer for Morgan by analysing the movie, extracted notable moments and proposed the scenes for the trailer. Though there was human supervision at times during this process, the nature of AI is such that even this supervisory need will be reduced as the machine keeps processing and learning new information. Therefore it would be no surprise if shortly we come across content entirely created by computers. The real potential of AI can be fully unleashed when it is used in conjunction with Augmented Reality and Virtual Reality. VR is being used to give new and unique experiences to users. For example, UK’s Guardian offers its customers a free downloadable VR app with an in-app purchase of a Google VR headset. Using this headset and app uses are offered VR experiences like investigating a murder scene. Such unique offerings can only be expected to go up in the future. Combining AI with AR/ VR can have a transformational impact on the industry. For example, using VR, the behaviour of consumers can be tracked more accurately and data so recorded can be used by AI to enhance user experience and customized content. Social Media: Social Media has become a reach booster for the media and entertainment industry. Be it the latest news or a new movie trailer, social media gives the required (if not more) - not to mention free of cost - publicity to the content. Be it directly or indirectly (in the form of memes, jokes and Hashtags); the content
reaches a far number of people than which could be achieved by any traditional promotional methods. TV production houses and news channels now equally focus on the number of subscribers and followers they have on social media platforms as they do on TRP. More importantly, social media helps the producers of content with instant and valuable feedback, case in point, the recent trailer of the movie “Thugs of Hindostan” was subject to trolling and criticism for the graphics in the movie not being up-to-the customers’ expectations. This made the lead actor of the movie ask the production team to re-work on the graphics and improve them before the final release. However, it is both fascinating and terrifying at the same time that social media now has become the primary source of information for most people. Though information is available at fingertips, misinformation and the dangers associated with it (like widespread panics, manufactured hatred) are the dark sides of such a system. New Competitors: Today’s top production houses, over the entire last century have built themselves as giants and too big to compete. But entrants like Netflix – riding on the wave of technology have forced these companies to change the way in which they operate. With streamable and customized content being offered at consumers’ convenience (called Over-The-Top (OTT) model), the incumbents face the danger of becoming irrelevant in the future. This made them re-think and re-strategise their approach in reaching out to the audience. For example, Disney recently pulled out all of its content from Netflix and decided to start its streaming service. In 2018
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Netflix revealed its worldwide subscriber base to be an excellent 125 million. Netflix could achieve this with their unique content (some of the highest rated and most watched shows) and meagre monthly fee. Even on the domestic front companies are battling it out a tooth to claw for increasing their viewership on the digital space. For instance, Star India and Zee Entertainment Ltd are locked in this battle through their OTT platforms – Hotstar and ZEE5 respectively. They are m a k i n g exclusive deals with telecom operators (Jio and Airtel), with smartphone companies and even with e-tailers (Hotstar with Flipkart and ZEE5 with EZ Mall) to offer their content bundled with the products sold.
state that in 2016, ad-blocking Not just new methods but lead to $20.3 billion of revenue. advertisers are also finding new Marketers are looking for ways avenues and platforms to reach to make their content more their target customers. Smart relevant and relatable to the home assistants (like Amazon’s customers. They are improving Alexa) will be the next major their capabilities of tracking the destination for marketers to customers’ digital activities and CHRISTHIN advertise their product. Factors using analytics based on mobile Multipurpose like increasing template commute time technology and social media Uciadue et acepuda to urbanization, estinis lead to to profile consumers and send inihitat advertising officipsanim quiat. on in-vehicle digital systems. Conclusion:
tailored content based on where the consumer is and what he is doing. The best example for this is searching for flights. We get ads of hotels and discount offers
The transformation of media and entertainment industry is going to be a data and technologydriven one. With a growing middle class especially in the emerging e c o n o m i e s (estimated to be around 4.3 billion by 2030), demand for new media services with a focus on convenience and personalization will grow multifold. Not just unique content but also unique ways of reaching the audience is what will keep
on travel when we make any flight booking.
companies in businesses afloat through this disruption.
Advertising: Personalized advertising is becoming more relevant as traditional means of advertising are proving to be less effective. The newer generations who have more purchasing power find ads more irritating than entertaining. Ad clutter on websites and in applications creates terrible user experience and damages the image of both the host (platform) and the advertising brand making users turn more towards ad blocking tools. A WEF reports
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MEDIA AND THE ENTERTAINMENT INDUSTRY AKSHAY SHARMA SCHMRD PUNE
It would be a charm if one could buy time to binge watch a Netflix show that one has taken a fancy to, or perhaps, some more time, to finish watching the series on Amazon Prime Video that everyone seems to be prattling about. Somehow, our lives have become busier, and we are preoccupied with work that precludes us from surrendering ourselves to the world that our heroes and our role models live in. It may seem a bit odd though, that each title that happens to be a part of a ridiculously enticing assortment of shows and movies implores us to expend our treasured leisure time watching it. This happens to be the new world of entertainment – watch what you want to, when you want to. The television, once the center of all familial recreation, is struggling to preserve its dwindling significance. It would be folly not to discuss how the offerings on the aforementioned entertainment portals, as well as similar ones engaged in an intense competition for viewership share, manage to create such captivating content. The curious patrons of these portals have often wondered – how
do these media businesses manage to justify the costs for the production of so many sundry titles? The answer lies in something referred to as the ‘long tail effect’. In essence, the long tail effect describes how a wide cross-section of viewers from myriad geography, cultures and age groups are likely to cluster together into several categories and provide more than enough viewership to each offering on these media portals. Therefore, the focus is no longer on a few ‘hits’, but on the variety, and the quality of each offering that contributes to such variety. This ensures that just about anywhere, anyone in the world can find a match for his or her preferences on one of these media streaming services. For example, Netflix features show a range of crime dramas starring eminent Hollywood actors to documentaries on contemporary global politics prepared by popular news outlets – there’s something for everyone. The businesses owning traditional avenues of entertainment are blundering around, trying to stay relevant. Most of these media houses have decided to venture into the on-
demand media entertainment industry. The Indian market is a witness to this occurrence – SonyLiv, Voot, ErosNow, ALTBalaji are online on-demand media streaming services which find their progenitors in wellestablished media houses who once dominated the television screens. It seems that the astute business minds that govern the course that these businesses are likely to adopt have deferred to the winds of change in the market. The factors instrumental in bringing about this change are aplenty. The preeminent among them, especially concerning India, would be an unprecedented scale at which the common people have adopted the use of mobile devices capable of harnessing the power of the internet. Also, the recent surge in the consumption of data powered by a massive reduction in the tariffs associated with such data plans has propelled the data consumption in no small measure. Another factor that has played its part in this tectonic shift in the media industry rides on the back of access to the internet –
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values, and preferences shaped by choice. A millennial, in sharp contrast to his parents, is highly likely to switch several jobs throughout his career, dine out more often, accord significant value to aesthetics in most of the decisions he makes, and consume a variety of content when it comes to entertainment. All these aspects that differentiate a millennial or the subsequent generations from their parents hinge on the availability of choices. The type of content that is consumed on the internet further emboldens people to attach individuality to every decision that they make – the brands that resonate with the young also craft marketing campaigns that inspire them to defy tradition, and make unique choices.
due to language barriers or due to their specific preferences. As a huge bait for the crores of cricket fans in the country, these media services also stream live cricket games along with those of other sports as well. The sacrifice that a preoccupied individual would have to make to miss watching a game of cricket to devote his time to some other activity is a thing of the past. Mobile devices are significantly adept at streaming live content at the behest of the user, allowing him to catch glimpses of his favorite game as and when he finds the time.
Although the disruption in the entertainment industry has heralded convenience to an extraordinary degree, a lso shaping the industry is the disreputable aspect of this shift preparation of special content for in avenues of entertainment specific geographies. We are all concerns how 74 percent of the too familiar with new and original Indian viewership access such shows starring popular Bollywood content from the profiles of actors being aired on these media their friends or relatives. Despite streaming services. This goes a offering quality content at long way in attracting consumers affordable prices, these services who would be unwilling to have been unable to convince consume content designed for the average Indian user to loosen audiences in the United States, his purse strings and subscribe to 12
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these portals. The future would perhaps bring technological solutions to address this issue. It would perhaps be wise to understand that we are at the brink of evolutionary change as far as the media and entertainment industry is concerned. The Indian viewers, by the sheer scale of consumption, have signaled in no uncertain terms, that innovative platforms that serve diverse content that is dynamic enough to match their everchanging preferences, will always be preferred over mundane and linear television shows. It is a hearting sign that the established media houses are responding to this rather strong vibe in the industry.
TRANSFORMING THE LEGACY ENTERTAINMENT INDUSTRY THROUGH DIGITAL REVOLUTION
Rohit Dudi and Sankalp Panda IIM Lucknow
Introduction: Rise of Online Music and Video Streaming Over the past couple of years, it has become increasingly obvious that streaming of online content (especially music and video ) has risen massively and will continue to do so in the future. Thus, It can be said that there has been a profound change in the way people consume media which has led to a completely different way in which industries and artists deliver their media to fans. Today, online streaming platforms have become the major source of revenue for both the music and video industry. Instead of digital downloads, people are opting to stream all the content and the reasons for this are pretty simple. For the price of a single digital album download, consumers can gain access to millions of songs, videos via streaming services. As per RIAA’s 2017 mid-year report, recorded music industry of the US experienced a 17% revenue increase in the first half of this year in comparison to last year, and the primary drivers of that growth were streaming services.
Although total digital revenue was about $3.2 billion, an impressive 62% of it was accounted for by streaming services which numerically amounts to $2.5 million. Below we take a look at the major drivers for this change:
2. The rise of Video Streaming
Similar to music streaming, video streaming has also caught a lot of pace today. This has majorly been possible to due increased mobile data availability at significantly lower prices which in turn has 1.Growth in Digital Music allowed an increasingly higher Streaming Services number of people to turn to mobile services. This growth is Every one of us has downloaded a expected to triple by 2021 and song on our smartphone at some hence has become a major point point of time and then stored it of focus for giants of the video on our memory cards so that in media industry. case of a switch in mobiles we can keep our downloaded songs A lot of people, especially in with us. urban areas, are increasingly time bound in today’s world and hence Streaming removes this seldom get the time to sit in front inconvenience totally as it allows of their Televisions to watch people to listen to millions of their favorite TV shows. Because songs stored on the cloud by of these reasons, mobiles have paying the price of just one become an essential part of digital album. Additionally, some their life as it allows them the streaming services such as gaana. convenience of consuming their com etc also allow people to favored media during any time of downloads songs in case they the day. opt for premium subscriptions. Streaming allows people to A lot of video streaming services sample different services by today such as Netflix also utilize switching between them and an industry-leading media and today approximately 100 million entertainment recommendation users are subscribed to these engine which takes into services. consideration consumer’s history Strategist
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in terms of the shows they have watched and recommends them similar shows which they might like. This furthers the convenience aspect of video streaming services since it saves the consumers time on trying to search for new shows and videos of their choice. The world of independent music distribution has also seen a huge amount of expansion over the past few years as more and more artists are opting to move from major label associations contract so as to harness the personalized attention which indies can provide. This rise of streaming as a channel for content delivery has allowed many upcoming independent artists to share their work with the consumers directly and hence gain recognition for their work. No longer do they need the help of a powerful label to sell copies. This growth in video streaming also shows no signs of plateauing in the future with video streaming revenue expected to reach an unbelievable $70.05 billion by 2021 as consumers continue to subscribe to more and more such services and rising disposable incomes and rise in reach of the internet allows new users to jump into the streaming bandwagon. Unsurprisingly, this growth has also led to massively increased competition as every major player tries to get a bite of this hugely lucrative pie. The biggest and most recent example of this comes from Disney’s announcement that it would be severing its ties with Netflix in order to launch its own streaming service in 2019 and in order to fortify its new service with exclusive content (which are generally the primary attractions for a video streaming service) Disney also bought assets from 21st Century Fox as well as bought stakes in Hulu. Even companies like Google are getting into the music industry today with big investments such as the one in US14
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based digital music distribution startup UnitedMasters. Similarly, UK-born company Ditto Music recently opened 12 new offices worldwide to cater to its growing roster of independent artists. Although there have been some skeptics of the long-term viability of streaming platforms as a source of revenue, the current scenario indicates that the battle is just beginning and that in the war between companies to assert their dominance in this field, technology would be the major differentiator separating the leaders from the pack. 3. Data-Driven World
and data provided enhances efficiency increasing prediction and thus making vision making a very powerful tool. VR is being embraced by consumers. Data thus assumed to be sitting in the center of the so-called entertainment revolution. Jon Davies, Director of EU Music Partnerships at Shazam, illustrated this potential. He stated an app’s ability is remarkable in utilizing data in order to predict a hit from six to eight weeks in advance. Data is important as it has evolved the world of television because consumers are being presented with an ever-increasing number in terms of delivery choices and content driven by decisions which are data-based. An extensive report by Ericsson reveals the massive changes which have been occurring on TV. About 70% of consumers are nowadays watching television channels and videos on their smartphone, amounting to double the percentage from what was 5 years ago. Predictions are rife that by 2020, only 10% of people will be watching TV only on a traditional screen, which is a 50% decrease as compared to the year 2010.
The success of streaming as a platform means that people are now consuming data at a never before seen rate and hence we have seen a huge spike in demand for data in the past five years. On the other hand, companies now have to deal with huge amounts of data generated by their customers on a daily basis and it has become paramount for them to properly analyze and use this data in order to have a competitive advantage over their competitors. Technologies like media suggestion algorithms etc are built of this very platform of data and the innovations won’t Factors like machine learning, stop there. automation and Artificial Intelligence (AI) are the hot topics 4. Technological advancement today. Machines are being used for analysis of data without getting Technological advancements are into any defect or complexity. continuing at a very rapid rate. This has led to the transformation 5. Future of Creative Industries of the media industry as the very basic concept is the Today, the digital revolution development due to which the is peaking and at the same artists are growing which has led time consumers are becoming to consumers more dependent increasingly tech-savvy and on the consumption of these are consuming media at an concepts. Everything boils down unprecedented rate. This only to one single thing that is – data. stands to grow in the future as technological progress enables An in-depth understanding of firms to come up with newer the data pertaining to music ideas. is required. But the media industry is very unpredictable Factors such as access to smart
devices such as smartphones, smart cars etc and the development of better mobile applications have enabled people to stay online anytime and from anywhere. In the future, more of digital technology may be introduced in Media and Entertainment to improve the user experience further. Also, this has necessitated that every content delivery service should have a mobile app today. The major reasons for this being:
6. Reduces the cost of customer acquisition There are certain features that can help boost a firm’s mobile brand visibility: 1. Performance: Customers want apps without hassles. Faster the app’s performance more the customer pull 2. Independent: The app should not be limited to any particular platform
1. It increases the visibility of your service 3. Content Flow: Constant flow of articles, blogs, videos etc 2. Enhances social networking help to keep the app usage strategies experience fresh
to how business gets done in the media and entertainment industry. Features such as AI, VR and voice-controlled technology will play a much larger role in deciding the kind of content being created and how it is delivered to the target consumers. Data usage will become even more intensive as analysts develop innovative solutions to make data input more actionable and last but not the least, technology will work to enhance the user experience beyond anything currently seen. It definitely is a wonderful way ahead for the industry.
3. Helps improve loyalty
customer 4. Social Media engagement: Helps attract new users and retain old ones 4. Reinforces the brand image Conclusion 5. Improves customer engagement The next few years are expected to bring a multitude of changes Strategist
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CHALLENGES FACING DIGITALIZATION OF MEDIA AND ENTERTAINMENT INDUSTRY Sai Krishna Mantravadi IIM SHILLONG
Digitalization (the process of converting information into computer readable format) today has become a ubiquitous phenomenon affecting different industries to varying degrees. Entertainment and media industry is not immune to this phenomenon. Media and entertainment industry is forecasted to grow at CAGR of 11.8 percent. Digital entertainment is expected to be the driver of this growth. India today is at a digital crossroads of sorts where it has to set the ground rules upon which the phenomenon of digitalization would be unleased in the world’s biggest democracy.
2016 had raised an interesting debate in America and throughout the world regarding privacy in digital age. Facebook had a team on specialists who controlled and edited the trending news, it was reported that these specialists profiled users based on their activity which was monitored without their permission. It was reported that stories that were in line with conservative beliefs were suppressed by these editors many of whom were left leaning. Facebook had fired these specialists and replaced them with computer algorithms that would do this job to avoid any bias. Irony as it would seem, these algorithms were also written by To this end, it is important for humans. In other words, these us to understand some of the algorithms would manipulate problems faced by digitalization the posts to suit the users’ needs. Algorithms were written in such 1)Data Privacy and Opinion a way that it would not display Manipulation posts in Facebook, Snapchat, Instagram and Twitter in real The US presidential elections of time. The unique selling point of 16
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these social media platforms had been that information could be communicated real time without any censorship as was the case with corporate media houses who had well known leanings. The social media news feeds were meant to be objective. The subjectivity brought in through monitoring our activity negates the whole purpose of these platforms. Add to it, the fact that it is a clear breach of our privacy and control on what we can or cannot see. 2)Content Censorship
Availability
and
The other very significant phenomenon that has been observed today is a shift from cable television to a subscription based content screening model wherein customers would not only pay for but also exercise control on what they wish to see. From a choice perspective this is
definitely a positive development that has led to democratization of content creation and increase in creativity. However, there are some sociological problems that were not foreseen. Online video streaming sites like Netflix and Amazon Prime has given its users access to content that transcends the geographic and cultural boundaries. People get access
3)Decline Journalism
of
Traditional
to content which can be viewed as obscene or something that requires viewership discretion in their host countries. Access to this kind of media does provoke changes in the society at a pace that not everyone is comfortable with. This sometimes leads to public disorder, demonstrations and rioting. In this digital age it is all the more important that we as a society arrive at a solution that strikes a balance between individual expressionism and established societal norms.
online news articles and news channels. This change has some profound implications. Newspapers traditionally had a mix of national, regional and local news informing its readers of the events at all these three levels. However, with decreasing advertising revenues, print media is slowly leading to cutbacks and laying off of journalists. It is being predicted that couple of years down the line print media will not have the ecosystem of journalists who could track the story on local issues leading to a lack of
One of the significant areas where digital transformation is creating a negative impact is the news broadcasting industry. The rise of smartphones have changed the way people consume their news. Newspapers are being replaced by their digital equivalents like
oversight weakening the fourth pillar of our democracy. This situation could lead to rampant corruption and disinformation at the local level weakening our democracy at the grassroots. Today traditional newspapers are transforming themselves into content generation and distribution networks that focus not on the stories that we ought
to know but the stories we want to. In conclusion, digitalization has definitely improved the speed and reach of information dissemination however that is also observed to be the case of dissemination of disinformation. As witnesses to the effects of both these phenomenon, we as a society need to ask some hard questions and delineate as to how we wish to oversee the phenomenon of digitalization.
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DIGITAL TECHNOLOGY FORAY INTO THE ENTERTAINMENT WORLD AND ITS IMPACT ON MARKETSPACE Deepati Vijay Prakash IIM Lucknow ‘Digital technology’ is the new buzzword in the entertainment and media (E&M) industry and it is changing the ways people experience media and entertainment. The digital experience goes beyond just providing content, it includes providing content on the device of choice as well as when required. The Entertainment & Media industry also have to be covenant with the monetization across diverse platforms. As a result, there is a surge in collective partnering across partners. The new digital model is set to regroup the incumbent models for the television, music, publishing and film industries.
technology emergence. Presently, this sector stems a bulk of its revenue from subcontracting undertakings as international production houses outsource work to Indian studios. The transfer to digital technology is about utilizing new capabilities to achieve transformative businesses and operating models. These competences explore an immense range of opportunities for the innovative media including access to a global marketplace, multi-platform distribution, greater consumer engagement, enhanced collaboration and the development of pioneering products and services. The following expands on these opportunities, defines the trends Numerous media firms are observed and identifies key offering diverse promotions and success factors. swapping from subscription fees to ‘freemium’ pricing business Opportunities provided by digital model combining unrestricted technology services with paid-for-premium services. The market potential 1.Access to a global marketplace: is massive in terms of services and investments in infrastructure Observed trends as the world’s largest market goes ‘digital’. This is likely to 1. Social media is becoming a unclutter new revenue streams standard means to access and for developing market like India. involve with consumers in new Digitization could prove to be a ways. need gap filling revolution and win-win scenario for producers, 2. Digital tools empower operator’s, customers, as well as companies to develop access to for the government. experts around the world both external and internal and establish The Indian animation, gaming new innovation communities. and visual effects (VFX) industry is also likely to benefit from digital 3. The tools required to create, 18
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produce and distribute content digitally are streamlining some processes. Key success factors Entree to a variety of competing domestic online distribution channels, including aggregators, to reduce revenue loss to foreign aggregators. Capability to produce, label or publish and make practice of online marketing and distribution mechanisms ex: social network tools to gain mindshare in the global content marketplace. Aptitude of companies to produce for multiple digital platforms and the capacity of firms to have affordable access to strategic intelligence. 2. New business models are primarily focused on multiplatform distribution and consumer engagement Observed trends 1. Evolving new business models allow commercially viable digital consumption. Enabled by cloud computing and digital lockers, multi-format platform distributions are enabling creative industries. ‘ 2. Frictionless’ digital content consumption initiatives further legitimate content acquisition. 3. Many consumers fail to pay
to ‘free’ models but will pay for value. ‘Free’ or discounted model in exchange of personal information can be monetized over advertising.
management systems. Firm-level industry association.
tracked growth path as networks were upgraded and consumers were presented with brand-new 3. Significant interplay between service proficiencies. As thought larger and smaller companies. leaders in the industry point Development of cooperative out, when government policies Key success factors initiatives on an inter-form basis mandating digitization of cable to create a new infrastructure. and other information and 4. Amalgamation of advertising entertainment platforms come and branded entertainment. 4. Presence of an operative inter- into place, Indian and foreign governmental policy and program players in the Entertainment 5. High dissemination of co-ordination. and Media space should be smartphones and other mobile well equipped with content and devices. 5. Development of appropriate services benefiting their target policy and programming in customers. 6. Willingness of distributor consultation with the industry. to consume online content The government mandate to and applications to support 6. Existence of a widespread high- digitize cable networks across traditional distribution platforms. speed infrastructure presented India has brought a significant Progress of numerous micro- through a variety ofpackages at transformation to the multipayment options attractive price points billion-dollar TV industry and have a positive impact on the 7. Growing complexity in 4.Lower barrier to entry nascent broadband market. This exploiting the analytics of online is likely to bring an exemplary tracking systems. Observed trends shift in the country’s television distribution industry, where for 8. Better-quality access of 1. Creation of funds to stimulate years unprincipled local cable companies and government the development of innovative operators have under-declared to measurement mechanisms interactive content. payments, causing huge revenue in tracking consumer usage. losses to broadcasters and Capability of companies to 2. Digital media training platforms. incorporate user or audience programmes and training funds. feedback in the production and Digitization gives multiple ideation of innovative content. 3. Digital related theoretical system operators (MSOs) the programmes chance to engage directly with 9. Ability of firms to experiment end- customers. They will now Key success factors have to reposition themselves 3.Increased collaboration from being largely viewed as 1. Company embracing of digital a business-to-business (B2B) Observed trends production methods. Presence operator dealing with multiple of a post-secondary system local cable operators (LCOs), to 1. Partnership across the creative teaching continuous learning being considered as a businessvalue chain between companies, in digital practices; integrating to-customer operator, managing entrepreneurs,academics and business skills and management millions of end-customers. government. ‘Co-creation’ training for the cultural media through web communities and businesses and promoting Indian gaming industry social networks. collective programmes. Presence of post-secondary institutions The Indian gaming industry is 2. Formation of research centre or compliant to the changing needs anticipated to witness large hubs for media companies. of the industry and work closely changes, primarily in the with it. domesticmarket. Introduction of 3. Cooperative infrastructure to 4G and telecoms focus on valueallow better connectivity among Cable television added services are expected to the creative media players in the lead digital marketplace The pattern of growth being followed by India’s Broadcasting to exponential growth for mobile Key success factors and Television market emulates gaming in India. This will also lead that of North America (between to Indian gaming players 1. Accessibility of affordable 1998-2003), Korea (during 2003essential digital production tools. 2007) and Taiwan (during 2005- moving up the value chain 10)2. Domestic companies in and getting involved in end-to2. Execution of content these markets were on a fast- end game improvement and Strategist
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publishing. As the Indian market matures and gains expertise, Indian players will gain confidence of their foreign counterparts and attract greater percentage share of the subcontracting pie and copublishing deals. Impact on revenues and services Digitization will enable multiple system operators to expand their revenue sources by providing more choice and variety to customers such as HD channels, broadband and value-added services (VAS) such as edutainment, gaming and video on demand (VOD). multiple system operators will also have greater flexibility to determine how to price content, in order to maximize revenues. Moreover, in order to digitize and upgrade the infrastructure, multiple system operators will need external funding and can explore the various options available including, PE funding, IPOs and other strategic investors. 20
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Additionally, the government’s recent decision to increase FDI in the broadcasting and DTH sector, from 49 to 74%, is likely to open up avenues for multiple system operators. Challenges of digitization Cable digitization in India poses a huge task before operators, consumers and policymakers due to the sheer scale of the endeavour and changes required in the present infrastructure of cable services. The first imperative in an attempt towards widespread digitization is to create awareness among all concerned stakeholders, and, providing training to more than 200,000 cable operators and orienting consumers towards the choices, accessibility factors and quality transformation that digitization rolls in for them. The way ahead Digitization also provides service
and content providers with a chance to identify the suitable target group benefiting from their efforts. Tracking consumer preferences as they move across various platforms will enable providers to involve consumers in redefining their business model. In terms of involvement, consumers love playing an active role in shaping their content–and are happy to pay to do so. An instance of this is the popularity of voting for contestants on reality shows. Social media platforms are essential for their participation. In terms of privilege, consumers would like unlimited access to content for free, but are happy to pay for services that provide additional value and the ability to ‘jump the queue’ such as special offers, advance information on discounts, etc. These features are needed to engage into sustained profitable relationships with consumers.
CORPORATE INTERVIEW
MR. MIHIR MODI
CO-FOUNDER, RAINSHINE ENTERTAINMENT PVT. LTD.
With the rapid evolvement of digital media, the modes of entertainment are also gradually changing. Digital technology has already made its foray into the entertainment world and has completely disrupted the marketspace. We connected with Mr. Mihir Modi, who is the co-founder of RainShine Entertainment Pvt. Ltd. and former CFO and CBO of Zee Entertainment Pvt Ltd. He is an alumnus of Indian School of Business and has more than 20 years of industry experience.
Q 1 How has your career journey these to important business been like? decisions. You are more agile in a smaller setup. An elephant will A. I started my career as a always be slower than a deer. Chartered Accountant, did my MBA from ISB. Post that I worked Q 3. What differences do you see with Ernst and Young and then I in the entertainment industry worked for Novartis Pharma for as compared to the normal almost four years in Switzerland. corporate world and what are Post that, I was in an internet your key takeaways? company as their India CEO which was part of an Irish group who A. Other industries have standard wanted to set shop in India. It was measurable products and a big change from large to a small services which is not possible company. After that, I decided to in the entertainment industry. take a risk and ventured into start- Here, every product is unique. up at an age when most people For example, Game of Thrones start making retirement plans. is quite different from Sacred Games. You cannot compare Q 2. You have worked for them even though their runtime companies like Novartis, Godrej is approximately the same. But as well as SaonGroup.com.What there is a huge difference in cost differences did you notice while per episode. Today people watch working for a large company everything, choices are changing vis-à-vis a small company? rapidly, and they want newer and different content every day. A. I think in many ways it is different. In large companies, everything Q 4. As most of us will be is pre-planned. For instance, graduating in business when I reached Switzerland to management soon, what is that join Novartis – my visiting cards one key factor which can keep were already printed, they had a us ahead of the game? road-map ready for the coming future. A lot of things are taken A. There is a basic philosophy that for granted in big companies. I follow – “Question Yourself” What You think you’re doing things but are you trying to achieve? What not necessarily. It is possible that is your comfort zone? Then try things are just happening. These to find a balance between both. companies have cultural baggage Eventually, you should be able to and priorities that may not match do business. Let’s take an example with yours. In small companies, completely different from the you decide everything. From your business world. The IAS officers designation to the laptop you are responsible for framing public want – you decide everything policy. Their domain changes from a mundane decision like every day – one day, they are in
the finance department and the next day – Fisheries. But they are well aware of their ultimate goal. So, as long as you the underlying pattern is there, you are aware of your ultimate goal – one should be able to ace it. Q 5. As budding consultants how we should prepare to have a diverse skill set and knowledge of diverse domains. A. Analytics I believe is the way going forward. It is going to be a game-changer. So, you should be good at analyzing problems, you should be able to break down whatever you see into smaller pieces. Adaptability is equally important. In every domain, you need depth and width. I will repeat what I said earlier “Question yourself”. Where do you want to proceed with your career? You want to be a specialist or generalist? How much you focus on depth and how much on breadth is something you need to balance. All the companies I worked for, we were doing consumer business, and my role was mostly based on consumer behavior. In a way, I have always been attracted to that domain. So, realize your strength. You will eventually find what you’re good at. Understand it fully before jumping into it. Evaluate it thoroughly. Last but not least, be open-minded and always ready to learn.
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