TV.NXT 2012: After all the digital promise, the time has now arrived

In a panel discussion at TV.NXT 2012, experts discussed the alternative sources of revenue besides advertising.

At the end of the day, when it comes to revenue in the media industry, the bucks more or less stops at advertising. Surely, there cannot be an over dependency on advertising for income and definitely, there are alternate revenue models that exist. A panel of experts discussed this very issue at TV.NXT 2012, presented by ABP News, an annual event of afaqs!.

The panel comprised of Shabir Momim, managing director, Zenga TV; Hiren Gada, director, Shemaroo Entertainment; and Sandeep Dahiya, senior vice-president, consumer products and communications, Viacom18. The discussion was anchored by Vanita Kohli-Khandekar, contributing editor, Business Standard.

In her opening remark, Khandekar brought to the audience's attention the significance of other sources of revenue in content and how robust business models around other revenue streams are still being worked upon.

Momin began the discussion with the success story of Zenga TV, a mobile TV services company. He admitted that while the service was launched with much aplomb during the Indian Premier League in 2009, a lot of decisions went wrong. He was quick to state that the mistakes helped his team gather a lot of learning and experience, and opened up many new avenues.

"We picked up exclusive content. Now we have numerous channels on our platform, many (10,000) movies and other content. We are born digital; so we understand data and behaviour patterns of the consumer," Momin said.

Following him was Gada, who runs what is a family business and a leading name in the entertainment industry. He spoke of Shemaroo's continued importance on the digital medium. Khandekar was quick to point out that Shemaroo's YouTube channel is among the top ones on the platform.

Gada said that almost every channel on YouTube is the equivalent of a content house. He noted that it is important to understand that the consumer has moved to digital and therefore one must serve the consumer wherever he is consuming content.

He pointed out an important learning that the content in the form that it currently exists might not necessarily be suited for digital media.

"It is a very important understanding. Films, for example, may not be viewed or consumed in that form on digital. Therefore you have to slice and dice, edit and repurpose content for it to work with the consumer on that platform," said Gada.

He talked about a particular contest that Shemaroo ran, where participants were asked to cut the popular Amitabh Bachchan movie - Don - to around 15 minutes without it losing its essence. Apparently, a lot of interesting entries were received that were put on different platforms.

"After all the digital promise in the past few years with social media and online video potential, the time has now arrived. Today, more than 50 per cent of the viewership, at least for our channel, comes from mobile," said Gada.

Dahiya, the only one from a non-digital sphere of work, spoke at length on licensed merchandising. He stressed on how increasingly important it is for a broadcaster to create a wide range of products around various properties that have a lot of value unlocking potential.

Kohli-Khandekar, too, agreed that this is a particular revenue stream not many broadcasters have identified except for Disney and Viacom. She pointed out that the Indian market is yet to create notable characters and formats that can be further leveraged on.

Momin then further explained the business model of Zenga TV. He revealed how it was decided early on not to work with mobile operators, as is commonly practiced, but tie up with mobile handset manufacturers.

Preferring to offer content free to the end consumer, sometimes the advertiser pays on behalf of the user and sometimes it is the handset manufacturer, he said.

He further revealed how in the first two years, 90 and 75 per cent of revenue, respectively, came from handset manufacturers, while the rest came from advertising. For the first time this year, 30 per cent of the revenue has come from advertising, he said.

Momin also pointed out how a new concept has been introduced by Zenga TV this year, wherein data revenue is collected from mobile operators. So, while the consumer continues to watch the content free, the operator shares part of the data revenue they earn.

Discussing the issue of copyright when it comes to merchandising, Dahiya agreed that there is little respect for the same.

"Of course, there isn't any (respect for copyright). There can't be. Where so much of retail is unorganised, you cannot expect respect for copyright," he said.

"There are two sets of people. One who know they are doing wrong and still do it. And the other who do not. For them, it is about this character looks good and hence, put it on a product and sell it,"

he added.

On the future trend in the home video market, Gada affirmed that it is digital. "When you see the whole digital ecosystem panning out, virtual delivery is the next step for home video. How it stands out in terms of delivery, infrastructure and business models are continuously evolving. Having recognised the direction in which home video is going, today my digital distribution team is bigger than the home video team," he said.

Towards the end of the discussion, handling questions from the audience, Momim revealed an important trend. He said that users now prefer to watch full length content rather that cut-to-fit content on mobile. He also spoke about how Zenga TV indentified 11 am and 2 pm as prime time on mobile TV and approached broadcasters accordingly.

This was the third edition of TV.NXT, an afaqs! event presented by ABP News.