Anirban Roy Choudhury
Interviews

“It’s not that digital viewers come from Mars and TV viewers are from Venus”: Sudhanshu Vats, Viacom18

Viacom18 launched its subscription video-on-demand offering Voot Select and Vats feel success somewhere else won’t guarantee victory in India.

When you drive along the Western Express Highway in Mumbai, you will witness the intense competition in the digital video-on-demand (VOD) space in India. Hoardings scream at you - the new ‘Original’ that Netflix, Amazon, Hotstar, ALTBalaji, Zee5, SonyLIV, Ullu… is streaming on their platform. It looks like all these platforms are running short of billboards. All this is to get an access to the consumer’s credit/debit cards, or wallet. The VOD platforms want you to subscribe to their premium service and now, there is a new one - Viacom18’s Voot Select.

India continues to be an ad-led media economy. Paying for content is not something Indians are accustomed to. One could argue this perception by throwing statistics about the rise in the ticketing revenue of films. However, whether Indians pay to watch content, or enjoy the experience, which is more like a family outing, is debatable. Indian television broadcasters are battling the regulator as they are unable to price their channels the way they want. In this ecosystem, there is a fight going on between subscription video-on-demand (SVOD) platforms. In FY20, as per consultancy firm KPMG, the OTT video streaming platform’s revenue stood at Rs 2,200 crore. And by 2022, KPMG projects it to reach Rs 4,800 crore.

Recently, the head of Netflix announced that the US-headquartered streaming giant will spend Rs 3,000 crore on developing original content for India. OTT platforms often make headlines with the sheer number of shows they say they will release in a year, which ranges between 30 and 100. Being one of the last ones to enter this race, Voot Select will certainly face stiff competition. Launched in March 2016, Voot claims to have more than 100 million monthly active users, and Viacom18 Group CEO and MD Sudhanshu Vats believes it is a big enough number to start with.

In an interview with afaqs!, Vats speaks about the digital video ecosystem, among other things. He asserts India is an open market and that success somewhere else won’t necessarily guarantee victory in India. “To win India, you will have to win in India,” he says.

Edited excerpts:

Being the head of the conglomerate, how much time do you personally devote to digital?

I’ve spent 50 per cent of my time on the digital business, and the reason why I do that is because it is a way of doing business in the 21st century and more so in the third decade of the century. From consumption to transmission, everything will move to digital soon and, therefore, as a network, we need to make that shift swiftly and for that, the leaders need to spend enormous time. Also, this is an area where we need new capabilities, mindset changes, and all this requires time.

"I feel 24 per cent of our business could be coming from digital."
Sudhanshu Vats

With the time you have spent in the digital business so far, what is your assessment, how big is it now for the network?

We launched our digital business in 2016 and we will soon celebrate our fourth anniversary... Four years into the business, close to eight per cent of the network’s revenue comes from digital. In the next four years, this contribution will double, or treble, and I still think I can be proven wrong as we tend to be a little conservative when it comes to digital. It is not going to be linear, rather, it will be exponential and, therefore, I feel 24 per cent of our business could be coming from digital. Mind you that will be 24 per cent of a much larger business. So, today it is eight per cent of a roughly Rs 4,000 crore business and in four years, contribution of digital could be 24 per cent of a Rs 8,000 crore business. Just on the back of advertising, we have doubled our growth year-on-year so far (since launch). Now, we are getting into partnerships, subscription and so, I believe the growth will be exponential.

Where do you see this growth coming from?

First, rapid advertising growth. Advertising on digital will surpass spends on print next year, and that itself makes digital the second largest medium. Then there will be a partnership income. Basically, the several content partnership deals that we are working on, and that is an income which will grow substantially and become equivalent to the advertising revenue that we generate. After that, you have the direct to consumer subscription revenue, which will also grow. According to me, it would be 40-40-20 share, so 40 per cent will be coming from advertising, 40 per cent partnerships and 20 per cent from subscription.

For you to earn the trust of advertisers, don’t you think you need an independent measurement body?

A measurement system, which is independent, will definitely aid further growth of advertising in digital. I personally feel it is in the interest of premium VOD players to have an independent measurement of our services. Having said that, Nielsen's DAR already exists.

"There will be around 120 million, even 160 million, internet video users behind paywalls."
Sudhanshu Vats

Do you have enough people in India who are willing to subscribe for the investments, to make business sense?

India is a hybrid country and there will be a vast majority of Indians who may not pay, but there will be a section which will willingly do so. The interesting part is that the section willing to pay will be quite large. By 2022, we are going to have close to 800 million internet video users. My sense is that once we reach that number, there will be around 120 million, even 160 million, internet video users behind paywalls. Now the question is whether 120, or 160, million Indians is a large number to go after, yes it is. There aren't many markets where you have such a huge base. My assessment is that India will follow market development models like China. If you go back to 2012, China had close to 350-400 million internet video users and most of it was advertising-led VOD. Cut to China of 2019, there were close to 800 million users, and 15 to 20 per cent of these were behind paywalls. The only difference, I believe, would be what China achieved in seven years, India will do that in four, simply because of the infrastructure and technological developments.

Sudhanshu Vats
Sudhanshu Vats

When you say 160 million Indians will be behind paywalls, how many apps will they subscribe to? Do you think there will be an aggregator bundling it all?

By 2022, there will be around 20-40 million Indians who will have multiple apps installed, and subscribed to. That number today, in my estimate, is around two to three million. Then there will be a section that will pick and choose. The notion that there will be just one app is flawed. I think this notion has come from the West, which itself is bursting it like anybody's business. As we speak, America has Netflix, Amazon, Hulu, Peacock, HBO Max, CBS All Access... so, no there is no one app, rather, there are thousands of them and the same will be (the case) in India, too. If they are good, offer good content, people will search for them, download and subscribe. What is essential is to have the ability to tell, identify and curate good stories.

Okay, should the platform then be a destination for something particular, or should it offer a wide array of content?

It has to be a wide array of services. See, to be relevant to that person's daily life, you have to have a little bit of everything. Having said so, I believe when it comes to kids, we need to have dedicated products, and that is why we launched Voot Kids as a separate platform. I say this because we need to allow kids to embrace the screen. They can’t stay away from it as that is the world. So, we need to provide them a safe, slightly more edutainment and enriching environment, which allows them to learn, play, and enjoy themselves. So, the app has to be more wholesome - lots of things to offer to a wide audience, a large demographic set, from youngsters to old people.

Also Read: Hotstar eyes billion screens by 2023; launches 'Specials'

But then there are many platforms offering the same, why should one subscribe to Voot Select?

People will subscribe to us because we will offer a lot of things... All our linear feeds will be available for people to watch live. We will offer high-quality ‘Originals’ - as a team, we know we have the capabilities to create them. 'Taj Mahal' and 'Jamtara', which are streaming on Netflix, are made by our teams. Along with that, we will also offer a reasonably strong international content for paid subscribers. We have partnerships with CBS, Viacom, Showtime, Endemol, Fremantle. Not only do we have a reasonable amount of international content, but a lot of this content will be exclusive to us.

Screengrab of Voot Select's web interface
Screengrab of Voot Select's web interface

Don’t you think premiering before (it is shown on) television will cannibalise your television business in the long run?

Long run, we are all dead... (laughs). Immediately, we don't see this making an impact on our television business. There are 900 million Indians who watch TV, while close to 400 million watch video on digital. Then there are reportedly 10-15 million who are behind paywalls... India is so heterogeneous that there are people who will continue to aspire to have their first television and, at the same time, consume content only on digital.

"It is not that the digital viewers come from Mars, while the TV ones are from Venus, they are all very similar."
Sudhanshu Vats

Do you think once you put your premium content behind paywalls, the AVOD business might suffer?

Advertisers are asking one simple question: How many people are watching, and for how long? Voot is already delivering very well on both fronts. We have over 100 million monthly active users and the time spent per viewer on the platform is around 50 minutes per day. As long as we continue to reach out and engage with the audience there’s nothing to worry about.

We heard Netflix CEO announcing Rs 3,000 crore on content in India. There are others making headlines, too. What’s your approach going to be?

We spend close to about Rs 3,000 crore on content every year… Now that we run Voot, I can say, it is not that the digital viewers come from Mars, while the TV ones are from Venus, they are all very similar. So, we are already spending (on) a lot of content for India and our belief is that we are going to deepen our presence in the country. Now from ‘Originals’ point of view, we believe in quality over quantity. So, we will not chase any particular number, but have sufficient shows in a year to keep our subscriber engaged and offer value to them. We are looking at 30 plus ‘Original’ shows in a year across languages. We are spending Rs 3,000 crore and have 300 people working on developing content for us, and that is comparable with anyone else. Now let the best guy win. Money is not going to decide, and having won in another market is no guarantee that you will win in this market. You will win in this market if you win this market. Something which is very big somewhere will also be big in India, is not entirely true.

"In the digital world, the success of a programme lies in the word of mouth."
Sudhanshu Vats

With so much content being created, how big a challenge is discovery? What makes a content tick, according to you?

In the digital world, the success of a programme lies in the word of mouth. Hey, have you watched 'Jamtara', you should watch it if you haven't? It is the most effective way of marketing. Having said that, should you do some traditional marketing? Absolutely! When you put up a hoarding, it partly promotes the programme and partly the platform, and that is why we see platoforms doing so. We will also do the same.

Also Read: "In the digital business, every hour is a Thursday": Tarun Katial

Will you use creative teams involved in television content for digital, too? Also, what role will Viacom18 Studio play in Voot Select?

There is a core Voot content team, which will be responsible for producing content. Our studio will continue to function in the manner it is. So, it will produce some content for us and some for other platforms as well. Our regional teams will work for individual regional pieces of content that will come out. There will be some ‘Originals’ in Tamil, which will be done by our Tamil team already there. Same will be with Bangla, Marathi, Kannada and other regional languages, those will be done by the respective regional teams. We will launch a crime show which has been done by Manisha Sharma and her Hindi team. We are pulling in resources of all content teams to create, produce content for Voot Select and it’s not the prerogative of only one team. Also, this notion that grammar is different in digital is partly true. Of course, there is a slight difference in both, but a good content person can toggle with both.

You have been a marketer with HUL for a long period. How different is selling a detergent compared to an OTT subscription pack?

At the core of it, I firmly believe that it is not different. It is a proposition you are selling to the prospective consumer/customer. It is the value, which is a combination of what the customer perceives the product to be and the price that you are selling (at). Fundamentally, you are satisfying an underlining need in any marketing, and the more universal the need, the better the chances of your product becoming bigger... How do you create the word of mouth, how do you know customers better to successfully serve them the content of their preference using a recommendation engine... the relationship is far more intimate and that is what is different.

What is your vision for Voot Select? Do you want to become a global platform, like Netflix, or just focus on India?

I would like to stay focused to develop something which is loved by all Indians, and there is a lot of work to be done here itself. When you say all Indians, it is an easy thing to say, but the country is of a continental proportion. You have multiple languages, cultures, very distinguished habits and preferences. I think first, we need to build it for India, get it deeper into the country, and then appeal to the diaspora as well.