Ashwini Gangal
Digital

Will Indians really pay for online video content?

The clue to the answer lies in how much they pay for content on other media channels, finds Vanita Kohli-Khandekar, contributing editor, Business Standard.

"Yes they will," said Vanita Kohli-Khandekar, contributing editor, Business Standard, answering the question in the headline, at vdonxt asia, our recently held convention, in Mumbai. She then went on to take the audience, stakeholders in the business of online video, through her presentation on the subject.

Will Indians really pay for online video content?

Vanita Kohli-Khandekar

Through this presentation, one that broadly looks back at five-year trends, she attempted to look at, first, the context in which the media industry operates today and second, the place online media occupies in this ecosystem. All in a bid to analyse the aspect of paying for content in the world of digital video.

"There's this big edifice that's been created around how Indians don't want to pay for content, that they're cheap-skates, free-loaders..." said Vanita, adding in defense of the desi consumer, "Fact is we do pay for services."

Indians will pay for digital video content because the context for this practice - of paying for content in general, that is - already exists; "we've been paying for content for years." Obvious examples include cable TV ("they may have risen in absolute terms, but in real terms cable prices in India have gone down"), movie tickets (she pegs the pan-India average at Rs.70) and newspapers ("non-Hindi language newspapers are among the most expensive and people pay Rs.6 and Rs.10 for a copy; many of us in Mumbai and Delhi with good bandwidth forget this").

In fact, citing 2016 data, she pointed out that just under half the revenue of the media industry came from the pockets of Indians who happily paid for content. Split that by media type and it's clear that about 20-30 per cent of the newspaper industry's revenues came from the paying consumer; for the TV industry, the figure is little over 60 per cent, and over 75 per cent for the film industry. In Vanita's book, the movie industry, the most B2C of the three, is one of the most resilient industries, globally. "Look at the film industry very closely if you're looking at online video pay," she said.

Her own estimate, based on MPA (Media Partners Asia, an independent consulting and research provider) numbers, shows that of the total digital advertising revenue, which is close to Rs. 8,000 crore, about Rs.2,500 crore went to online video. In other words, roughly 20-25 per cent went to online video, she finds.

On pay revenues/subscription, the figure is somewhere between Rs.200-300 crore. "It's very small right now," she said, before taking the audience through her (not exhaustive) list of 14 video apps, of which 10 either have an element of pay or are completely pay (see table).

Will Indians really pay for online video content?

Vanita's list of 14 video apps of which 10
have attempted pay in India
Click here to enlarge

Texture and format notwithstanding, the principles that drive the basic economics of different types of media are the same. It's essentially about aggregation and monetisation of audiences. "The principles of business and making money apply to online as much as they do to a newspaper or a radio station," she said, predicting the rise of specialised sites and aggregation-based channels/platforms over the next couple of years. The process will be painful, she cautioned, referring specifically to the payment mechanism side of things.

"If you want to crack pay in the online space, if you want to crack subscription revenue, then the mindset of your managers and CEOs has to be closer to film marketing, not to television... you have to think like a film marketer who asks himself/herself, 'Can I get this guy to pay Rs.200 to watch my movie for two and a half hours?'," she reiterated towards the end of her presentation.

Have news to share? Write to us atnewsteam@afaqs.com