“There is no end to the adventures that we can have if we only seek them with our eyes open.” With this quote from Jawaharlal Nehru, India’s first Prime Minister, on February 11, 2016 Intertrust’s CEO Talal Shamoon opened up the Digital Entertainment India 2016 event in Mumbai. Organized by Intertrust, the adventure this event focused on Bollywood meeting Hollywood, i.e., how both the domestic Indian and international entertainment market players can cooperate to unlock what is expected to be the next giant digital entertainment market, India. Besides Intertrust, speakers included industry luminaries from digital entertainment ecosystem players from India, Italy and the U.S. for a truly international perspective. Hungama, Disney and Sony were just some of the companies represented at the event (Albhy Galuten was also interviewed for Indian television). Ernst and Young, also a participant in the event, predicts that the Indian digital entertainment market will reach 200 billion Indian rupees (approximately $2.9 billion) by 2020, making this event very timely.
World’s Second Largest Entertainment Market
Dr. Shamoon noted that India, with the world’s second largest entertainment industry, is already a giant entertainment market. Adding such attributes as a highly diverse culture, nearly half of the population being 24 or under (CIA Factbook), a key entertainment consumption demographic, the second largest mobile market in the world with 220 million users in 2015 (Counterpart Technology Market Research) , a superpower position in the software industry, and an entertainment industry with a global reach, Shamoon stated that “India is already a master disrupter in many markets; it will do the same in the digital entertainment market.” He pointed out that India brings some unique aspects to its nascent market power, notably a giant movie industry, whose revenue stream still relies primarily on theater exhibition, the powerful influence of TV content, and a market where OTT video is still very much at an experimental stage. Still, with an already successful cable market and a broadband population expected to reach 500 million by 2020, Shamoon argued the seeds of a successful OTT video market are already in place.
Several speakers also talked about the potential of the Indian market. Neeraj Roy, Managing Director and CEO of the major online content distributor Hungama Digital Media Entertainment, mentioned that the notion of the Indian consumer not wanting to pay for content was not true. The company gets the vast majority of its revenue from consumer subscriptions and purchases. Hungama’s adoption of “sachet” pricing, i.e., purchasing access to the service for a limited time, had proven successful in the market. Intertrust’s Head of Media, Matthew Glotzer discussed how demand for both Bollywood (domestic Indian movies) and Hollywood content is increasing. Mr. Glotzer also noted that the declining cost of content production due to digital technology will bring in more content producers and a fragmented market much like is already happening in the U.S. Ron Wheeler, Senior Vice President for Content Protection at Fox Entertainment Group pointed out that the online video audience in India is estimated to reach 250 million in 2017, from an estimated 110 million in 2015. Manas Mati, Executive Director and Head of Technology from Disney India discussed how Disney India was already addressing the Indian market through multiple service providers and devices.
As a potential model for the Indian video market, Roopak Nair, Head of Marketing and Live Operations, at Reliance Games, an India-based game development company, provided some observations from the Indian Internet game market. In India, most of the opportunities lie in addressing a diverse market with a number of different language groups. Monetization models with potential in the game market such as ads, billing through device manufactures, subscription and tiered pricing could be applied to the OTT video market as well.
Examples for the Indian Online Video Market
Several presentations suggested models for the Indian OTT video market. One was given by the CEO of the Italian television service provider Tivù, Alberto Sigismondi. When Tivù started their combination satellite/OTT video service, they wanted to avoid a fragmented market where they had to work with each set-top box manufacturer to customize their devices for the service. Their solution was to come up with a platform for set-top box manufacturers to adopt. Even though Tivù is a free-to-air broadcaster, they adopted the open standard Marlin DRM (also adopted by Hungama) for a number of reasons, including an easier to manage content rights system and future-proofing for new business models going forward.
An interesting model was provided by Prasad Sanagavarapu, co-founder of Kiora, which has a suite of products designed for locations and environments with limited or no broadband connectivity. Kiora’s Content Zone is an appliance and cloud service that caches entertainment video for distribution in Wi-Fi hotspots. When customers login to the hotspot, they can purchase video content for their mobile device from the hotspot. When they do so, they download the video using the high-speed local Wi-Fi bandwidth without taxing the backhaul Internet connection. This solution is already being deployed by communication service providers in Sub-Saharan Africa and could be an interesting model for Indian carriers and others to deliver high-quality video to the 350 million smartphones estimated to be in the Indian market in 2017 (Ernst & Young). Kiora also provides solutions tailored for in-vehicle (airplane, bus, etc.) video distribution as well as Internet VOD content for digital satellite television providers, both of which also hold promise for the Indian market.
One thing that many of the presenters at the event emphasized was the importance of proper content protection for whatever OTT video distribution solutions adopted in the Indian market. Noting that current business models assume high rates of piracy, Intertrust’s Shamoon suggested that “Services that incorporate proper rights management technology typically fare better in the marketplace.”