Launching a streaming service on a platform that already has 275 million monthly active users is an unusual proposition. But that’s what MX Player, originally a video player – an app which can play any kind of external video file – did when it entered the content streaming game, in February this year, 18 months after Times Internet acquired it from Korean tech firm J2 Interactive for around Rs 1,000 crore.
While its rival streaming platforms are investing in customer acquisition, MX Player’s challenge is conversion; if the team gets all its existing users to watch content on the platform, it would be among the top two platforms in the country, alongside Hotstar, ZEE5, SonyLIV, among many others.
Earlier this month, MX Player raised $110 million (around Rs 800 crore) led by Tencent and Times Internet; the plan is to pump it into content, marketing and in the expansion of the platform’s entertainment horizons. We spoke to Karan Bedi, CEO, MX Player, on the occasion. Bedi, former COO of Eros Now, a subscription lead video on demand platform, joined MX Player in October 2017. The team is over 300 employees strong.
MX Player boasts of a repository of 200,000 hours of content spread across TV and films. MX has inked content-sharing partnerships with TVF, Arre, Viacom, SunNXT, SonyLIV amongst others. Presently, 15 of its Originals are streaming on the platform.
It’s been a year since MX Player was launched in India - how has the journey been so far?
We soft-launched last October and then formally this February. It has been a great year. Initially, the thought was – let’s take this very large distribution platform, which is a video tool, and convert it to a service. We have gone from a streaming userbase of zero to becoming the second-largest streaming platform in the country, on pretty much every metric.
What’s the metric that matters most?
There are two big buckets that you need to look at – reach and engagement. On the reach side, the platform, globally, has more than 275 million monthly active users across 200-plus countries. Seventy per cent of that user base is in India. Engagement is about how many of them are streaming and for how long... we are happy with the numbers. A good way to judge any service or consumption platform is ‘time spent’ and on that metric, we’ve grown 4X in the last six months.
MX Player raised around Rs 780 crore ($110 million) recently. Are you planning to acquire platforms?
There are no platform-related acquisition plans whatsoever. We have raised funds to be able to do what we do best – that is, to give users the content they want to watch. We already have video and music available on the platform and are planning to expand to games.
So, we will continue to invest in producing and acquiring good content, in communicating to our audience about the content we have, and in technology and personalisation. Also, remember, a third of our user base resides outside the country, so, we have global expansion plans too.
“We have the largest collection of TV shows in India, 12,000 movies, the largest number of web series in the country.”Karan Bedi
Which pockets in India do you get most of your traffic from?
While obviously Tier I cities are very important for us, as they are for any internet service in India, the penetration that MX has in Tier II and Tier III, and beyond is actually fantastic... that’s where real growth in consumption comes from. In India, we believe consumption of media and entertainment is a supply constraint problem and not a demand constraint one. As more and more content is created, consumption will increase.
We have 200-odd million TV sets in India; there are nearly 500 million 4G enabled smartphones and that number is growing. A lot of people, who never had the chance to consume entertainment, are now accessing it through smartphones. We penetrate markets that are most underserved when it comes to media and entertainment.
What kind of audience groups are you focusing on?
We focus on the audience we have... we have different types of content. We have the largest collection of TV shows in India, 12,000 movies, the largest number of web series in India. All of it is targeted to different audiences. With the kind of scale we have, we can target multiple audiences at the same time. One of our large shows ‘Hey Prabhu’ was targeted to a Tier I audience. Shows like ‘Amateur’ and ‘Hello Mini’ are targeted to both, a Tier I and Tier II audience.
The reality of the matter is, you do your best to create a piece of content and it will find its audience. Sometimes, you feel a particular type of content will fare better with a particular audience, but when you put it out there, you may see that it has done equally well within a group you didn’t think would appreciate it.
Tell us about some of the surprises...
We have been surprised multiple times. Besides our Originals, we’ve done a lot of other content, for instance our non-English international shows; take for example our dubbed Turkish content in local languages – we expected a certain amount of uptake, yes, but where it has come from and how it is doing is amazing...
“As a business, we’re in a good place. Eventually, there will be a smaller number of larger platforms and we would like to be one of the largest in the market.”Karan Bedi
How do you mean?
Punjab is the leading state for the uptake of our Turkish content. That’s the beauty of it... you do your best to create and acquire the kind of content you think is great and it will appeal to your audience.
But in a world driven by data and recommendation engines, how is that possible? People only watch what you want them to...
No, that’s not true. It’s actually the opposite. If there were no algorithms, you would put a particular show up and distribute it to a particular audience. But recommendation engines work such that whenever it spots a trend, it fuels it with relevant content. Part of it is system-led, but part of it is human-led too. Recommendation engines help discover niche audiences for content – audiences you thought did not exist – and then it blows them up. Recommendation and personalisation are key to our plans.
In the OTT ecosystem, ‘paid for’ content is perceived as premium, whereas free is perceived as cheap. What’s your definition of premium content?
AVOD, SVOD – that’s your way of looking at things, not ours. Typically, the way the industry defines premium is by looking at how much money has been spent on it – the kind of production value, the faces, the set, location, effects...
Today, in the market, (OTT) the shows are in the Rs 30-40 lakh per episode to Rs 5 crore an episode range, may be even more in some cases. But in this business, you can make good quality content for a low amount of money, which can be very good, and you can spend a lot of money too. Our promise is – we will provide premium content to our users.
Speaking of ad-supported OTT, what’s your competitive edge in the market...
Reach for one. Our penetration is much deeper compared to others, especially in Tier II and Tier III markets. Our scale is quite unique, not just in video, but among internet apps in general. We have TV content and are also creating and acquiring content, which is otherwise not available elsewhere. We also have video and display advertising on our platform.
... and are you trying to snatch ad share from other platforms – or do you see new money coming into digital?
It is going to be a combination of both. Let me put it this way, digital video advertising is growing very fast, and TV advertising is growing too... so there is new money coming into advertising. I see enough money in the space for everyone to co-exist, but, of course, there will be some movement (of ad share across rival platforms) too.
Google and Facebook continue to dominate the digital ad spends. Isn’t it a massive challenge for you to get a share?
We have scale and hence AVOD makes sense as a business model for us. It is true that Google and Facebook are dominant when it comes to digital video, but if you look at digital video advertising, that equation is changing very fast.
Our overlap with the ‘Google and Facebook app installed user base’ is much lesser than that of our competitors. So, there are lots of people that you can get to only through us.
What about the CPM rates, which are under immense stress?
Look, obviously we would like the rates to be higher like everybody else would. There was a massive spike in demand after Jio happened; consumption went up almost 20X. Digital video advertising is growing at 50 per cent a year, which is a lot for any market in the world, but it is obviously not 20X.
Demand (for content) is growing at a normal rate and advertising is catching up. Advertising as an industry is not going away; advertisers will advertise to their consumers, so we are happy being an AVOD platform. Having said so, going forward, we will evaluate other models.
What are your plans in regional markets?
We have already made shows in Tamil, Telugu, Gujarati, Marathi, Punjabi and Hindi. Apart from that, we have acquired content in 11 languages, including Bhojpuri, Kannada, Malayalam, English and others. We are making shows in Bhojpuri and more in Tamil... in fact, one of our biggest shows outside of Hindi is in Tamil. In the next 12 months, we will have created content in 10 different languages.
You have to market over 20 shows a year, but there are only these many billboards...
(Laughs) We already have a giant base of users whom we can market to while they are on the platforms. Along with that, we do traditional marketing and also market our content across digital and social channels. We treat each piece of content like a product, that is, we understand the audience for it and then create a marketing plan around it. We may not necessarily market each show in a big manner in Mumbai. For one of our shows, recently, we did a large campaign in 15 smaller towns – Patna, Kanpur, Lucknow, Ahmedabad, Ludhiana, and the like. You don’t see any other platform talking about these markets but they are very big ones.
How is MX placed in terms of revenue and targets therein?
As a business, we’re in a good place. Eventually, there will be a smaller number of larger platforms and we would like to be one of the largest in the market. Who else will be there...I don’t know.
When it comes to monetisation, we are at par with our targets and in some categories, we are exceeding our targets. The whole industry is in ‘investment mode’ right now. And I would say profitability at an industry level is not that far away. Stability is now emerging in the system.
Last, how long before you break even?
At least a couple of years from now.
Though relatively new in the larger scheme of entertainment, algorithm based content consumption has been around long enough for ‘pro’ and ‘against' camps to have developed. The latter, which I belong to, is based on a simple premise – if recommendation engines keep pushing content of the kind we’ve already watched, how will we ever discover new, contrarian types of content? Where’s the serendipity and human folly in a world in which humans have less volition than a platform? I’ve disabled YouTube’s auto-play option, in a bid to take back some of the agency I feel a sense of having lost to it. Netflix co-founder Reed Hastings told interviewer Chris Anderson on the TED stage, “... in practice, you’re right, you can’t just rely on algorithms – it’s a mix of judgment and what we carry... there is no perfect tool...”
This is relevant in the context of the cover story this issue – an interview with Karan Bedi, CEO, MX Player – because, while he spoke about the ‘productisation’ of content, highlighted his focus beyond tier I cities, and deconstructed what ‘premium’ means (it’s not just about whether the content is available for a price versus free, but also about how much it costs to produce it!), the discussion got passionate around the subject of the big bad algo.
Karan defended recommendation engines, insisting they kick in when a sliver of a trend in human behaviour is evident among a certain demographic, and then – and this is the main part – help the producers discover niche audiences for that content. Conversely, algos help people find content they did not know exists... and are likely to enjoy. “Blowing up trends” caught by the engine, he insists, helps both consumers and producers. On MX Player, it turns out, dubbed Turkish content works surprisingly well in Punjab!
A voracious reader of Turkish writers Orhan Pamuk and Elif Shafak, I cannot begin to surmise why that may be.
Ashwini Gangal, Executive Editor