Digital Rich: The Digital Goldmine
With the rise in Internet users and the subsequent growth in online content consumption, new media companies have struck gold
The increase in Internet usage in India has led to the rise of digital media platforms such as The Viral Fever (TVF), Pocket Aces, Wittyfeed, Inshorts, ScoopWhoop, and All India Bakchod (AIB) among others, in the last three to four years. Looking at their growth, it won’t be an exaggeration to say that these young entrepreneurs will shatter the glass ceiling of super rich in the coming years.
These new media digital startups knew just what to do. They kept it simple, short and entertaining. They not only entertained people but also emerged as brands.
Marketers Bet On Digital
According to the ‘Digital Advertising in India’ report by the Internet and Mobile Association of India and the Indian Market Research Bureau International published this November, the digital advertising market in India is projected to reach Rs 7,044 crore by December 2016 at a CAGR of 35 per cent. Last December, it was pegged at Rs 5,200 crore.
Brands and investors believe digital has tremendous potential. In other countries it has done enormously well, and in India it is on the verge of making it big.
The new media startups in India are valued between Rs 200 and 2,000 crore. With the growing Internet penetration in the country, digital is going to be the sole survivor among other content platforms in the coming years.
The report puts the digital advertising spend at about 12 per cent of the total advertisement spend in the country. In terms of volume, e-commerce leads the digital ad spends with Rs 1,040 crore, followed by telecom and banking financial services and insurance (BFSI). However, a comparison of these verticals in terms of share of spend on traditional versus digital shows that BFSI organisations incurred the highest share on digital advertisement. Almost 40 per cent of their overall advertising spends was on digital followed by e-commerce, telecom and travel.
Vinay Singhal, co-founder & CEO of viral content company WittyFeed, says, “In digital, everything is a derivative of the number of people who consume content on your platform. Indian Internet user base is expected to double in the next three years.” According to him, WittyFeed is currently valuated at $30 million with a revenue of $4 million in FY15-16 and expected revenue of $7 million in FY15-16.
“The bandwidth and the awareness of the user are increasing which means the appetite for content will also go up. People are going to consume content online more than ever, which means the revenue, turnover and profits for platforms like ours will grow at the same pace,” he adds.
70 MM entertainment screen shrinks to 5.5 inch Dhawal Gusain, chief operating officer and partner at TVF, says, “The digital ecosystem at large, along with TVF, will benefit from the growth in digital ad spends. With the ongoing lowering of data costs and better internet infrastructure, we expect a huge surge in internet users and online content consumption which in turn will be a big driver for brands to increase their spends on online platforms and creators like TVF.” Tiger Global recently invested $10 million in TVF and valued it at around Rs 270 crore.
AIB has 1.8 million subscribers and its YouTube channel is currently one of the fastest growing channels in India with more than 140 million page views. It has produced fiction on the web with leading Bollywood celebrities. AIB is also planning to enter into feature films this year.
Looking at their growth trajectory, it’s okay to say that both digital content company AIB and TVF are now media networks in their own right.
Internet penetration has added to the growth of such platforms. Anirudh Pandita of Pocket Aces says, “With such a massive pie of revenue available, multiple media companies, serving various target audiences and serving as the voice of multiple consumer cohorts will emerge.”
ScoopWhoop, currently valued at $20m, is targeting a Rs 100-crore revenue by 2018-19. Sattvik Mishra, who founded ScoopWhoop in 2013, says, “Our revenues have grown over 200 per cent year over year. We’ve seen increase in both ticket size and frequency in work from brands. We should be able to turn profitable in the next six months or so.”
From Flip to Click
Journalism isn’t dying but its business model is, while new media is thriving in India. In last two-three years, Indian readers have switched from traditional media to new media.
Dailyhunt, Inshorts, ScoopWhoop are some of the popular news and entertainment platforms.
Apart from readers, investors around the globe are too all for new media. Companies such as Tiger Global, Sequoia Capital, Falcon Edge, and Matrix Partners are top investors in these startups.
Backed by encouraging investors and massive funding, there is no looking back for these digital players. They are fast paddling towards the super-rich zone. Vodafone, Ola, BookMyShow, and Snapdeal are some of the leading advertisers on these platforms.
Dailyhunt’s parent company Verse Innovation brings regional content in the form of news and e-books from around the country on one platform. With 90 million downloads and 2.3 billion page views, the app is killing it.
In the last four years, the company has received $82 million in funding, and is valued at around Rs 1,800-2,000 crore as per industry estimates.
The company’s founder and CEO Virendra Gupta believes in vernacular content. He believes the upcoming 500 million mobile internet users in India will prefer local language. “Our vision is to be a dominant part of their first internet experience.”
An app that provides news in 60 words, Inshorts was created to cater to the younger generation that is increasingly getting out of the habit of reading news.
Since July 2014, Inshorts has raised $ 24 million in funding. The app has had over 5 million downloads and is aiming for 1 billion users in the coming five years.
Azhar Iqubal, co-founder and CEO of Inshorts, says, “The media and content industry today is one of the hardest to make money in and one of the key reasons behind that is the traditional model of advertising. The future of advertising lies in context and personalisation and that is why native advertising will eventually trump the traditional models.”
As per industry estimates, the valuation of the company is around Rs 570 to Rs 630 crore.
The Road Ahead
In June, the number of mobile internet users in India reached 371 million, from 306 million in December, 2015. Of the 306 million internet users, 219 million users were from urban India, which registered a Y-o-Y growth of 71 per cent, while the user base in rural India rose 93 per cent from the year ago to reach 87 million in December 2015. Reports show that tier II & III cities are getting aggressive on digital consumption. Very soon, digital media owners will take over and traditional media will go for a toss.