TV.NXT 2011: Digital video market will explode in the next two years: Shailesh Rao

During a one-on-one interaction session between Sreekant Khandekar (director, afaqs!) and Shailesh Rao (vice-president, media and platforms, Asia-Pacific, Google) at the TV.NXT conference, Rao answered questions put forward by Khandekar, related to the future of online video, should broadcasters worry about online, and how broadcasters can benefit from the internet.

Rao: Search for video works in a similar manner. A lot of people don't know that YouTube is actually one of the largest search environments in the world, right after Google Search. People search for videos on You Tube just like they search for text, images, news and information on Google Search. The degree to which you can search for video content on YouTube is a function of the description (of the video). So, content owners should do a good job in providing a better description/information of the video uploaded by them. They should give proper titles, the names of producers, directors and actors, and the date of creation of the video, in order to make the video more searchable.

With 48 hours of video content uploaded on YouTube in a minute, one of our key jobs at YouTube is to make the content discoverable and help users find the content.

Khandekar: Video consumption overall keeps rising online, but the viewing per video is still very small. On YouTube, the average video is watched only around 500 times -- and typically, most people stop watching after 60 seconds. That doesn't seem like very good news for TV producers or channels. Just as long form journalism has not worked online, isn't the same true for video?

Rao: I have to disagree with you on this. Initially, there was a lot of short-format content on YouTube, mainly user-generated. Now, YouTube has become home for both short-format and long-format content. In fact, if you go on YouTube, you will find a property called YouTube Box Office, where you can see old Bollywood films, and new ones like 3 Idiots.

The average viewing time is 30 minutes, which matches the average viewing time of TV soaps in India. The attention span is increasing with each passing day. YouTube gets about 450 million viewers per month, globally. In Australia, we have more viewers than TV channel viewers. In India, the audience is four-to-five times bigger than TV audiences and it is consistently rising. Two years ago, before we started streaming Indian Premiere League (IPL) matches, we had 10.5 million active users, monthly. Now, we have more than 22-23 million viewers (monthly) in India.

Khandekar: Does video content need to be adapted for online viewing? Any lessons learnt that you'd like to share?

Rao: Content creators should make YouTube a standard part of their distribution strategy and put up their videos on YouTube, without changing it much. This will help them in many ways -- content owners will reach a new set of audiences (including mobile audience), they can engage their audience, and lastly, they will get a lot of usage data, which can be used as research to improve content.

My advice to those content creators who want to use YouTube more aggressively is to create video content that lasts over a period of time. Because online video consumption is on demand, people watch videos as per their convenience, and a lot of people may discover and consume content at different periods of time. So, content creators have to maintain a consistency and maintain the freshness of the experience. The second thing that content owners should think about is how they can add more interactivity into the viewing experience.

Khandekar: What have been the big changes in video viewing online in the last couple of years, with special reference to India? And, how is this going to change, if at all, with the coming of 3G on mobile and the imminent fall in tablet prices?

Rao: Talking about the digital video space, what we have seen in every country is that prices have come down, more people are now buying digital devices, media consumption has become more fragmented, and the internet has become the dominant form of content consumption. In the UK, the internet became the dominant advertising platform (in terms of marketing budget) two years back, compared to other media.

In India, the key is affordability. The magic number here is Rs 5,000, and if you make available the digital devices (smartphone/tablet computer) for Rs 5,000, you will see an explosion of purchase, access and participation of consumers with the digital content (video). And, the Rs 5,000 tablet is not far away. Content owners should prepare themselves for the explosion of devices in the next 18-24 months. I think one of the things that India will have to become better at is developing interactive content in local Indian languages. As prices come down and digital devices become more affordable, you will start seeing people access the internet first time through YouTube, watching videos on phone. In 18-24 months, you will see a dramatic shift in video consumption and a large percentage of that will be non-English videos. We will see an explosion of new content from new stars (non-Bollywood creators) like actors, directors and musicians.

Khandekar: In the West, there are several companies which don't produce content for TV companies at all and produce video content only for online. Do you see that happening here, as well?

Rao: I think it will happen in India, too. I am very bullish about it. India is a very creative country and internet entrepreneurism is now exploding. A huge audience is now available online. There are more than 100 million people on the internet in India. If you tell a creative person that the internet can help you reach five times more people than TV, you will find more people adopting the internet to distribute their content.

Khandekar: Broadcasters probably feel a lot like print publishers felt about online a decade or more ago. They were damned if they did, damned if they didn't. Is anything different?

Rao: The situation is very different now, and content creators can monetise their content online better. In fact, some of the most profitable (in terms of revenue) content creators in the world for YouTube are from India. Out of the top 10 content producers on YouTube in Asia, five are from India. These are mostly big studios like Rajshri Productions. Our commitment to content owners is that you put up the content on YouTube and monetise using AdSense programme -- we will share majority of the revenue with you. This has enticed a lot of content creators. Not just big content creators like Yash Raj Films and Colors TV, even small content creators like Desimad are also on YouTube (Youtube.com/desimad).

Khandekar: YouTube is the king of UGC. Why is professionally created content important for you?

Rao: Yes, professional content is important to us and they create great content. As a platform, we connect great content producers with people who like to consume great videos. Thus, it makes sense for us to tap professional video creators. We are very focussed in working with professional video producers.

Khandekar: Which advertising formats seem to work the best for video -- pre-rolls, post-rolls, banner ads or something else? Do elaborate.

Rao: We have various ad properties available on YouTube. The YouTube Mascot ad unit on the homepage stays at the top of the page for the whole day. There are pre-roll video ads and search ads, displayed when a user searches for videos on YouTube. Ads, which are more interactive and in rich media format, work better.

Khandekar: If video viewing on mobile phones, and later, tablets, takes off, what impact will that have on revenue generation and sharing models?

Rao: Revenue generation and sharing models will remain the same across platforms. The video content owner will get the majority of the money. If we do not support the content owner, everything else will fall apart.

Khandekar: There is an argument that it is better to distribute video content rather than create a destination for it. What are the pros and cons in either approach?

Rao: You (content owner) should have a presence. But, you should realise that the internet is increasingly getting fragmented. Since it's an on-demand consumption model, you no longer control when, what, and if your audience sees something. The consumer can view the content on a desktop computer, tablet or smartphone. The only thing that you control is the content that you create and distribute across web and devices. I would say that 'content syndication' is a critical part of the business strategy. I am not saying that you (content owner) don't invest in your own destination (video property). If you invest in your own video property, then you should come up with something unique and different. If you think that you are a big brand (offline brand) and people will automatically come on your video destination, it is not going to happen. You really have to invest a lot on it.

(TV.NXT is organised by afaqs!, in association with STAR News (presenting sponsor). The other sponsors include Zee 24 Ghante Chhattisgarh, Amagi, HeadHonchos, ApnaCircle.com, Fox History & Traveller, and Lukup. TV.NXT was held at J W Marriot, Mumbai, on September 29-30, 2011.)