India's Digital Entertainment Hype
“With the rise of the internet, “attention” became the new currency! Covid19, however, has created a paradigm shift in the way we consume content and the way people socialize online. In this playbook, we delve into the new attention economy – new models, emerging players and trends in the world of social media, news apps, audio and video streaming, online games and more.”
Every calamity — minor or major — brings with it new opportunities along with the downfalls. The way the media and entertainment (M&E) industry monetises content has also been through similar curves of ups and downs. Advertisers first understood the power of radio when the US government successfully convinced citizens to join the army through radio during World War 1. And, when the Spanish Flu pandemic was contained with successful public health posters or ads in newspapers, media was once again in the limelight.
A momentous in recent times, the ‘Miracle on the Hudson’ — captured in the Tom Hanks film Sully — led to the rise of social media giant Twitter. On January 15, 2009, an US Airways Flight 1549 had to perform a miraculous landing on the freezing Hudson River, after the plane hit a flock of birds and both engines were lost. All 155 passengers on board were safe and Janis Krums tweeted, “There’s a plane in the Hudson. I’m on the ferry going to pick up the people. Crazy.” The tweet changed the way Twitter was perceived. It became the dawn of Twitter as a news source, straight from horse’s mouth as they say.
Today, as the lockdown is providing people more downtime together, they are discovering the joy of sitting back and watching a movie or ten, binge-watching shows or connecting with extended family or friends and total strangers on video calls, all from the comforts of their home and away from the negativity outside the four walls. Social media, which is now as mainstream as it gets, is the only connecting thread to the outside world. Consumers are also waking up to the potential of the cost savings in not going out to the multiplex, given the high price of tickets, parking and the in-cinema snack, a trend that can catalyse further growth for digital media.
“Social distancing has accelerated what we were anyway witnessing in the media sector due to high smartphone penetration and availability of cheap mobile broadband — higher adoption of mobile video viewership, multiple genres getting cemented in the ‘entertainment bucket’ such as online social gaming, streaming and edutainment and consumers latching on to subscription video on demand,” said Pranjal Kumar, principal and CFO, Bertelsmann India Investments.
The Show Goes On… Even In A Pandemic
The digital media and entertainment, including OTT, digital news, social media and gaming, was already seeing great numbers at the beginning of 2020 and it is expected to grow more resilient compared to other sectors, given the current pandemic.
As per data collected in January 2020, India’s media and entertainment industry is expected to reach a market size of around INR 307K Cr ($43.93 Bn) by 2024. Within that, the online media platforms grew at a CAGR 13.3% in FY19 to reach INR 163K Cr ($23.34 Bn), contributing majorly to the growth of the media and entertainment industry in India. The Indian digital advertising industry is expected to grow at CAGR of 32 % to reach INR 18,986 Cr ($2.93 Bn) by 2020, a figure slated to increase with the current shift in consumer demand.
According to an AppsFlyer report, India has been experiencing a gradual increase in app installs and sessions since March 7, when the number of reported Coronavirus cases in the country started to climb. Sessions increased by 65%, and organic installs by 50% till March-end. Gaming in general for India has also generated significant increases. The numbers are especially high in Casual Games where organic installs jumped 75% since a total lockdown was imposed on March 21.
“We have also seen a dramatic rise in non-organic activity in mid-core games — a staggering 205% increase since March 13,” said Sanjay Trisal, India manager for AppsFlyer, a SaaS mobile marketing analytics platform.
Talking about how gaming platforms have the capacity to continue churning out new content in these times, Girish Menon, partner and head, media and entertainment, KPMG in India, said “Gaming studios, unlike film or TV studios, have the ability to engage their audiences. Additionally, a sustained period of engagement with gaming apps, that quite often also offer elements of social interaction, is likely to result in higher stickiness of users and catalyse the process of customer acquisition.”
Covid-19 is expected to bring in further behavioural shifts among consumers. For instance, Hollywood studios are now looking to sell movies to streaming services such as Netflix, Amazon Prime. India’s film segment grew 12.2% in 2018 driven by growth in digital/OTT rights.
“Digital rights redefined the content consumption processes as the segment grew from INR 8.5 Bn to INR 13.5 Bn. Online platforms invested heavily in exclusive film rights and a digital-only film market has emerged,” a FICCI-EY report said.
Great Distractions For The Great Lockdown
While the predicament has become a downtime for businesses across sectors, it has come as a relief for the media and entertainment sector as audiences have more time at their disposal. Additionally, the psychological impact of the pandemic is also leading to changing consumption patterns. People trapped inside are being bombarded with constant negative news, making them anxious about the future. And, online gaming, social media, video streaming, music streaming come as great distractions from the negativity.
Advertising platform AdColony found that there was a 45% increase in the number of consumers playing mobile games multiple times a day and social media ranked fourth behind mobile gaming, TV, streaming in terms of how consumers were spending their time.
“Although multiple researchers have suggested the harmful effects of gaming and social media, in this time of lockdown the best thing is to keep yourself occupied, otherwise overthinking can generate stress and anxiety responses,” said Gargi Vishnoi, counselling psychologist, Fortis Escorts Hospital, Jaipur.
OTT: The New Mainstream
Many OTT platforms have also seen a minimum of 20% increase in its viewership. The daily active users (DAU) of Amazon Prime Video increased by 83% from February 5 to March 29. Netflix also saw a spike of 102%, says KalaGato analysis.
“We have witnessed a 20% increase in viewership on Hungama Play, since the beginning of March. This spike was first witnessed in cities like Mumbai, Delhi and Bengaluru, but is now being seen in other cities as well,” Neeraj Roy, founder & CEO, Hungama Digital Media said.
Similarly, ALT Balaji has seen an increase in appetite to consume diverse content and has witnessed a 15-20% surge in viewership, as have most other platforms. Interestingly, there’s a substantial rise in the time spent across urban and rural cities.
“In the current situation, our primary objective is to not let our operations be compromised, so as a responsible platform, we are also urging our viewers to shift from HD to SD quality to reduce the stress on the Telecom network infrastructure. As we encourage our viewers to practice social distancing, we shall continue to serve quality entertainment at their fingertips,” said CEO Nachiket Pantvaidya.
For smaller and newer OTT players this is a golden opportunity.
There are currently more than 35 video OTT players in India. However, with a subscriber-based user base of 53.1 Mn (as of November 2019), the industry has been a promising one.
Looking at the enhanced opportunity now, ecommerce platform Snapdeal has also entered the space with a partnership with Hungama Play. Rivals Amazon, Flipkart has already marked their presence in the sector. While Amazon Prime Video is one of the top players in India, Flipkart entered the space with Flipkart Video only in October 2019.
For around 11 local and international players that marked their entry in this space recently, this can be an untapped opportunity just like what was seen during the demonetisation when with increased adoption of digital solutions, OTT subscriptions increased 13-fold and revenue 14-fold.
“With changes recently seen, satellite television, OTT and social media will dominate the entertainment spectrum in the days ahead with music streaming continuing to grow. OTT entertainment will become mainstream, as the Covid19 lockdown will expose a lot more consumers to the range and versatility of the digital platforms,” said Lloyd Mathias, angel investor and former HP Asia-Pacific marketing head.
Moreover, viewing hours are also changing. “Video streaming now remains high from 8.30 am to 11.30 am, which used to be the commute hours, and then again from 1 pm to 3 pm or the lunch hours, which would not see a peak earlier. In the evenings, there is a surge between 6 pm and midnight, as opposed to 8 pm and midnight earlier,” said Hungama founder Roy.
The Underdogs Emerge As Winners
As social distancing becomes a norm and consumers shape habits around digital media, many new players, who were till now a minuscule part of the spectrum are now riding the wave of progress.
“New products and business models are being imagined to capitalise on the rise in media consumption. Global players are recognising the need to build India-centric offerings. The coming years are likely to usher in greater innovation in content formats, means of dissemination, and business models,” Uday Shankar, chairman and CEO of Star India, president of 21st Century Fox (Asia) and FICCI vice president, said in a recent statement.
Zoom Is The New Home For Influencers
Zoom saw a huge surge in downloads in India since the lockdown. It is also being used by many for social gatherings, office meetings, Zumba, yoga and other recreational activities. In Q1 2020, Zoom was the sixth most downloaded non-gaming application, according to a Sensor Tower report. Interestingly, Zoom had the most number of downloads from India.
Zoom was installed in around 6 Mn Indian smartphones out of the total 80 Mn installs worldwide during the first quarter of 2020.
Sensor Tower said that the impact of the coronavirus was evident with the success of video conferencing apps like Zoom.
Others such as Tencent Conference, WeChat Work, Google Meet, Microsoft Teams, Slack, BlueJeans, Airmeet have also recorded tremendous growth since the lockdowns began in late February. However, after some security glitches in Zoom came to light, competitors such as Google Meet are scaling up their solutions. With security being a huge concern, consumers may now trust domestic players more than international ones.
“Small players with a presence in Indian data centres will benefit from the low latency of colocation. This will lead to a more pleasant user experience compared to global players with servers located abroad,” said Saurabh Jain, cloud technology consultant and founder of Thinvent Technologies, which developed Thinvent Meet, a videoconferencing tool.
He added that businesses will need customisation and rebranding, which is not possible for large players to deliver and opens the services market up for niche players in India.
Niche Podcasts Find Takers
“Since the lockdown was announced, our listenership has doubled to over half a million listens. If we were to look at the period from January 15 to April 15, we have received over 1 Mn listens, which means, nearly half the lessons have come in the past one month alone. To put things in perspective, one in every five listens happened in the past month alone,” said Amar Deshpande, cofounder, Gaatha Story.
Unlike the general perception of podcasts being consumed only during the commute, the pandemic has caused increasing screen fatigue among people, which has resulted in great growth for podcasts. Something that will be all the more applicable in the post-corona world.
Aawaz, which was launched in 2019, saw up to 20% growth in new listeners as well as increased listenership from existing users in the recent past, after lockdown.
“We earlier saw peak listenership during typical drive times, now we get it evenly distributed through the day,” said Aawaz cofounder Sreeraman Thiagarajan.
The platform’s research had earlier indicated commute times as the prime time of podcast listenership. However, now the platform has been getting feedback from users on tuning in at other moments in the day, such as while relaxing at home, or doing household chores. Basically, people are tuning into podcasts to zone out, he said.
While few experts believe podcasts will see a gradual rise, on the back of specialised content, startups feel now is the time for them to shine.
“Till some years ago, podcasts were not known. However, in 2018, it started picking up. Now, with changed consuming patterns, there is more scope. This is the golden period for podcast advertising,” said Umesh Barve, head of India partnerships, Audioboom, an on-demand audio and podcasting distribution platform.
Reading Goes Social, Digital
Any kind of collaborative experience is gaining ground as people seek to connect with others in every way they can. “Virality is being created through group forwards, and if there is a good idea that finds a niche, it will spread quicker than it would have in any other time,” said Utkarsh Sinha, managing director of Bexley Advisors.
Wattpad, an online community that connects around 70 Mn readers and writers who share their original stories, has witnessed a spike in user engagement.
In India, Wattpad has seen a 25% increase in user activity which includes daily reading time, while writing session times have almost doubled in recent weeks. The platform is also seeing a growth of 50% for new users coming in internationally and a 30% increase in the reading time and events.
“During this unprecedented time, we are seeing catharsis through creativity as people are sharing their stories with readers from across the world. They are connecting with one another while physically separated through stories,” said Devashish Sharma, country manager, Wattpad India
Golden Age For Digital News
The opportunity to get discovered today is greater than it has ever been before. There is a fundamental shift in the way people are communicating and the early movers will have a better chance, as seen in the changes in the media market.
Bexley’s Sinha added that even when we have battled the pandemic, the economic fallout will linger for a while and changes in behavioural patterns may stay, which can also be backed by the fact that it only takes 21 days to form a habit as analysed by psychologists. For instance, while print media has been around for more than a century, it is slowly losing its charm as those who stopped subscribing to newspapers and magazines rarely go back to traditional media.
A FICCI EY report substantiates the shift away from traditional media saying approximately 2.5 Mn consumers in India today are digital-only and would not normally use traditional media. It is expected that this customer base will grow to 5 Mn by 2021. For print media, which accounted for the second-largest share of the media sector, the growth in 2018 was a mere 0.7% over 2017.
The contrast with digital media is stark. A Comscore report said visits to websites and mobile apps in the “General News” category increased by 61% in the week of March 16-22 this year, compared to February 10-16, 2020 and by 50% compared to the week before.
The massive viewership numbers for re-runs of Ramayana on Doordarshan or old cricket matches are just a few examples proving that people want something to keep them occupied in these times.
“Not only podcasts, gaming and OTT, but live webinars are gaining enormous traction as it is a great time to upskill with time on hand. I am personally learning how to cook and make cocktails!,” said Ankur Mittal, cofounder, IP Ventures.
While social influencers’ earnings may have gone down due to lesser marketing spends at present, they may bounce back once normalcy restores. “Online influencers-driven platforms, enterprise-of-one could become mainstream: Just like in the offline world, online influencers will gain stars and super-star status, and influencer-reliant marketing or content would become mainstream,” Bertelsmann India Investments’ Kumar added.
Bigger beneficiaries could also be sectors and businesses feeding the OTT channels and others such as startups focused on content creation for podcasts and videos and those supporting online gaming and news media platforms. “Most of the online platforms are already very well-funded and have steady growth in consumption, which will likely sustain even after the situation improves and will attract even more investments. Enterprise solution businesses that can potentially help existing businesses achieve efficiencies and cost-rationalisation will also potentially attract more business and investment opportunities,” added IP Ventures’ Mittal.
Clearly OTT, short-form video content, gaming, music, podcasts and digital news are all getting the biggest boost ever. However, private investments in the digital media value chain will vary depending on time and business model. The investment climate in 2020 and in early 2021 is expected to be extremely tough as investors will be wary of deploying funds in new deals.
“As most digital platforms are grabbing eyeballs, monetisation will be under pressure due to less perceived disposable income and once investment climate stabilises, investors would be more excited about predictable and profitable models,” said Pranjal Kumar of Bertelsmann India Investments.