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Fast Forward To The Future
Content, culture, interactivity and commerce are all coming together to brew the perfect storm propelling media into a new direction in India, birthing a slew of mediatech companies that are attractive to consumers and investors alike
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In July 2021, Sachin Tendulkar invested $2 million in JetSynthesys. In the same month, WinZO secured $6 million — both are tech-led entertainment companies. Gumlet, a SaaS firm that automates the media delivery infrastructure, received a $1.6 million investment from Surge, while ShareChat’s Moj, Prime Minister’s AatmaNirbhar App Challenge winner Koo, and Daily Hunt’s Josh, all short-form video players launched in 2020, attracted some of the highest investment monies of the year.
Shuttered cinemas, production halts, lockdowns and overall budget cuts cast a gloom cloud over the Indian media but the sector attracted $877.8 million across 85 funding deals last year nonetheless, compared to $561.27 million in 2019. The underlying factor among these deals was that all these companies had one or more of the following at their core — content, video and mobile-first, culturally diverse, interactive, social commerce. This mix is what defines mediatech in today’s world order.
While FDI (foreign direct investment) inflows in India’s information and broadcasting sector, including print media, stood at $9.5 billion between April 2000 and March 2021, the highlight trend last year was investors’ money going to the mediatech pie. All these indicators point to the paradigm shift in the sector where new titans are flexing their muscles.
The Big Game
Short video apps and gaming platforms were joined by OTT (over-the-top) among the fast-growing companies last year. Given that India has nearly a hundred OTT brands already, it is no surprise that in FY20, as per an EY report, digital and online revenue stood at Rs 26 billion (20 per cent YoY increase). Within this, animation, visual effects, gaming and comics grew 29 per cent, while the audiovisual sector and services rose 25 per cent.
The Government of India’s attention to the sector played its part as well. Not only did the government increase FDI limit from 74 per cent to 100 per cent, making the sector more attractive, but it also undertook policies that indicated the seriousness given to the otherwise younger lot in the sector. Digital audiovisual content including films and web shows on OTT platforms, as well as news and current affairs on online platforms, were brought under the Ministry of Information and Broadcasting in November 2020 and IT Rules 2021 were subsequently outlined.
More efforts from an infra standpoint were seen in the year when the Maharashtra Film, Stage and Cultural Development Corporation, aka Film City, invited expressions of interest to develop infrastructure on its premises. Prasar Bharati and PSM, the official state media of Maldives, inked an agreement to facilitate collaboration and capacity building in the field of broadcasting. Global player Netflix made a big move with its plan to open its first live-action, a post-production facility in Mumbai.
India’s M&E sector per se is expected to grow at a CAGR (compound annual growth rate) of 3.24 per cent, touching $25.56 billion by 2022. As per EY, the Indian M&E sector stood at Rs 1.38 trillion (~$19 billion) in 2020 and is estimated at Rs 1.73 trillion (~$23.7 billion) in 2021. Further, it is projected to grow to Rs 2.23 trillion (~$30.6 billion) by 2023. Television would account for 40 per cent of the Indian media market in 2024, followed by print (13 per cent), digital (12 per cent), cinema (9 per cent), and the OTT and gaming industries (8 per cent).
These numbers signal not only a strong rebound but a big shift in what is becoming the new definition of media, where technology has become both the disruptor and the saviour.
“The increase in mediatech platforms is due to the significant rise in digital consumption of content over the past few years. Consumption of content through connected devices alone has surged and this trend will continue with faster internet penetration and affordable devices. The future for mediatech startups will be defined by the developments in technology and consumer trends, but these will continue to provide new opportunities from a business and investment perspective,” comments Amit Goenka, President - Digital Businesses and Platforms, ZEE Entertainment Enterprises.
The evolution of media in India has undergone several transformations from the DD and satellite TV days to the multi-channel, multi-niche and specialised broadcast to the digital-first era. Irrespective of the epoch, content has always been the king. In this next normal, where content is democratised, several new traits come to the fore.
“The holy grail for success in media has been the stickiness that digital communities have been able to attract. While this continues, an increasing number of consumers are now comfortable being creators, whether it is creating a 15-second reel or starting a live room or publishing your newsletter. This new breed of ‘creators’ is changing the way media is created, consumed, perceived and monetised,” explains Sai Kumar, Founder, Arré.
User-generated content (UGC) is no longer a buzzword that social media had once created. Instead, it is now a structured, self-sustained model. The rise of video and mobile, now even considered cliché as growth variables, allows UGC to co-exist with other formats, making people bullish about its future. A marked trend in this transition is the demand for culturally relevant content. If the investments in Moj, Josh, Koo and others are anything to go by, a must-have ingredient for a winning media equation is ‘culture’, whether it is in the form of language or the overall narrative.
“Players that operate at the intersection of video and vernacular will enjoy a competitive advantage as investors make a beeline for this segment,” informs Umang Bedi, Co-founder, VerSe Innovation, that has brands like Dailyhunt and Josh, adding, “Our recent fundraising of $450 million is a validation of our theory, with Josh now having attracted the largest investment in the short-video space in India.”
The case is not very different for Koo, a platform that has been claiming headlines for all the right reasons. In its to-do right now is going hyperlocal in both approach and presence. The founders of the company have applied the ‘many Indias’ philosophy to their platform.
“Giving a nuanced expression platform for a country, as dynamic as it is in local languages, is very important,” notes Mayank Bidawatka, Co-founder, Koo. Bidawatka believes that being born in India gives the platform a natural consciousness of consumer expectations. “We bridge the culture gap, and this reflects in our product. It includes respecting local laws while building the product around them,” he says.
As diversity in content gains an upper hand, companies that are buying or selling media have been strengthening their play. One example was when Mediabrands, a company that helps leverage content for brands to achieve their outcomes, launched Mediabrands Content Studio (MBCS) in India in May and signed a production partnership with VICE Media. Another was when Zee Entertainment signed a deal with Tokyo Broadcasting System Television in Japan to produce diverse content for India and the global market.
Interactivity & Commerce
Social media’s strength was in its interactive, barrier-breaking model. This once-novelty is now integrated into the very fabric of the media sector, making it second nature. However, there are shifts in this already as interactivity broadens its scope. The result is the rise of another sub-sector -- gaming. Gaming, which picked up massively in the mediatech space, is a mix of both entertainment and interactivity, and with the promise of cloud gaming, there is also the expectation of scale.
“Some of the online games such as ludo and carrom have their roots in the Indian culture. Today, with technology going as far as it could, these games have resurfaced once again, thus pulling the crowd to become a part of gaming communities. The modification of traditional games into a digital platform has enabled these traditional games to transform into predominantly skill-based games through the introduction of new formats or gamification elements,” notes Danish Sinha, Founder, Gamestacy.
Game developers have started taking into account the gaming of Tier-2 and Tier-3 markets as well. The lower tier markets have also birthed a new kind of commerce stream with social commerce. The lines between commerce and promotion blurred already with pureplay ecommerce platforms becoming integral to Indian shopping behaviour.
Social commerce sits at an intersection, where product selling happens directly through social media platforms. Digital commerce, hence, has become one of the most promising ingredients of the newage media companies. Marketplaces on Facebook, Google Pay or the integration of payments within WhatsApp are further indicators that this space is poised for exponential growth.
Media’s innate strength is in its ability to connect with consumers directly, a reason why it attracts corporate India’s monies via marketing. To narrow this distance and to fight harder in providing the right consumer experience, brands donned the publisher hat and launched direct-to-consumer channels. This was not done by bypassing media but by partnering with newer forms of media, giving more monetisation opportunities to mediatech companies.
“While the last decade was spent in activating as many data points as possible, the next decade will focus on unifying all insights to offer experience as the brand. By using custom-built solutions, brands can seamlessly connect offline and online channels, in addition to top and bottom funnels. As technology increasingly automates both marketing operations and intelligence, creativity will be the key differentiator,” avers Vineet R Ahuja, Managing Director & Lead, Consumer, Sales & Service, Accenture India.
The emergence of technologies based on machine learning, artificial intelligence and programmatic marks a new era in the digital media world. These technologies ensure media effectiveness by addressing cross-device targeting, audience reach unification, hyper-personalisation and holistic measurement. With ad verification tools and measures, advertisers are not only assured of the quality of the inventory being assessed but also a more brand-safe environment.
“Marketers can expand the horizon for technology activation from limited retail to omnichannel. Consumers have rapidly moved to new normal and adapted themselves to a touch-free world, where voice integrated systems have evolved the rules of engagement. Voice has created a quantum shift in how brands interact and connect with their users,” adds Dimpy Yadav, GM, Xaxis India. This has contributed to the growth of voice-led media options and platforms both.
While AI-enabled martech is now a reality for many brands to improve personalisation and automation with the right content in the right channel, there are also challenges in its adoption for several companies. A noticeable one among these is the need to derive actionable insights from disparate datasets, put in the right governance and an integrated omnichannel approach. Going forward, leveraging data-driven insights to build a single view of the customer should be a top priority for marketers.
“With technology and integrations for such platforms, marketers are in the driver’s seat, which is quite an evolution from the days when IT owned system implementations. Moreover, platforms such as Adobe and Salesforce along with near real-time insights are helping businesses engage better with B2B and B2C audiences through hyper-personalisation and connected customer experiences,” says Sunil Mirani, CEO & Co-founder, Ugam.
There is however no denying the increasing realisation that innovative martech can help brands bridge the gap with the consumer. It can shape distinct consumer experiences and in turn, create tangible business value. It is enabling the marketer’s agenda to shift from the business of communication to intelligence-led experiences.
“Brands have transitioned to a digital-first approach in their initiatives. Almost 70 per cent of martech tools will optimise customer experience, and 59 per cent of tools will be used to create content to promote innovative digital experiences. The digital orientation of brands has also redefined the user experience journey as digital platforms have become the primary drivers of all marketing efforts post-Covid,” comments Jaganathan Chelliah, Senior Director - Marketing, India & MEA, Western Digital.
Here To Grow
Startups, both in age and spirit, and legacy media companies have embraced the technology route to stay relevant and future-ready. Some are doing this well, as seen in the growth trajectories of the year gone. ShareChat employed over 1300 people in the last year. New AI-driven brand-building companies are augmenting both their human and tech assets. Some numbers even indicate disproportionate growth. This is why this period of transition is expected to also see its share of shakeup and consolidation. Media mergers and acquisitions, a trend that was prominent in the West in the last two years, are making their way in India.
Power shifts have already begun. A new breed of creators is satisfying the needs of new consumers. Broadcast wars have become streaming wars. Advertisers are following consumers, placing their bets on newer media outlets, which in turn is contributing towards recovery advertising spends. Media companies are transitioning to playing larger roles --- whether it is Alphabet, which has become more than home for Google and YouTube or Meta, which is not just about Facebook, Instagram and WhatsApp anymore. These giants are opening up newer markets for mediatech companies.
The role of the government cannot be undermined either in the larger scheme of things. All pointers create the perfect growth picture for this sector.