Unfortunately, Digital Media Biz In India Rely Heavily On Ad-Funded Model: Neeraj Roy, Hungama
The omnipresent and all-pervasive nature of digital media today is spreading its wings across sectors, only to proffer a more immersive and seamless experience to the audience. For the media industry in particular, while media and interactive technology may have been two different words in the past, their union has only disrupted the entire ecosystem in more ways than one.
It wouldn't be wrong to comment that the power lies in our palm today, in that little device that we call our smartphone. From the joy of ordering food from Zomato to listening to music on Hungama to checking on our friends on Facebook, this has led to a seismic shift in the digital media user behavior, further opening exciting avenues for content publishers and markets to monetise the digital media platforms, by applying the constantly evolving technological innovations.
In an invigorating chat with Neeraj Roy, Founder & CEO, Hungama Digital Media Entertainment at a virtual webinar series, called ‘Media Moguls’, presented by BW Businessworld & Amazon Web Services, he describes witnessing three distinct churns linked to generational changes in the past 1.5 years, as far as networks are concerned. “In the early days of EDGE and 3G networks, it was principally an audio-driven ecosystem. Then came the 4G revolution from 2016 onwards, where we saw the movement from 1GB to 16-18GB. The last 18 months have observed digital acceleration across industries and the M&E has been a massive beneficiary. Two broad pluses have been OTT & Gaming,” he mentions.
Agreeing that Hungama has been ‘monetisation-obsessed’ from its early days, Roy describes how the journey of digital media monetisation models has panned out in India, “The first phase happened through telecom or the Value Added Services. In the last few years, we are witnessing 5-6 different forms of monetisation due to the evolution of fintech. Next, monetisation happened at the back of layering it with gamification.
At this point in time in India, the two typical components are transactional/ subscription-based and ad-funded. Unfortunately, the digital media businesses in India have relied heavily on ad-funded and not so much on the former.”
On New Monetisation Avenues
With the emergence of new routes to content and business monetisation, there has often been replication because one of the players succeeded. However, Roy disapproves and points that India is now at the cusp of next-generation change as far as networks are concerned and that fascinating opportunities await the M&E sector. “Today, we consume media entertainment in five formats- text, audio, video, gaming & AI/VR.
5G, in this regard, is creating a spatial web where you can seamlessly move in and out in any form. A consumer can choose to move from audio to video to gaming. That is transformative for the broader media and entertainment ecosystem. I don't think enough companies are looking at it like that. They are, perhaps, looking in siloes,” he says.
For Roy, this generational shift happening through technology will only invite opportunities for cohesive entertainment. He believes that in the next 2-3 years, there will bring a shift from transactional/ advertising to potentially a higher growth of social commerce as the player will evolve itself. “Because of the evolution of the player, the kind of interaction that will happen will lead to commerce. This will change the mindset, of how media companies are looked at. If you start from just time consumed to commerce, you have got potential to be part of the broader 80-85 trillion economy,” he suggests.
On Going Beyond Content
It is a common phenomenon amongst international players to operate beyond their core expertise. Twitter Spaces or Facebook commerce are a few examples. However, this is not very prevalent with Indian businesses. On being asked why these companies are unable to look beyond walled gardens, Roy shares, “First, the sheer pace of change. It is not that companies were not prepared. When the change came, the consumption jumped from 850-900MB to 10GB in 10 months. The big bulk of this consumption was happening at the back of video and gaming. There was a change in habits.
Second, the impact of the pandemic was severe on a few media sectors- print and radio literally fell off the cliff. All of these principally relied on advertising. So, when advertising took a hit and moved towards digital, some of these companies were not as prepared."
Roy signals green shoots at the end. With 8x growth in past months, next 3-4 years are expected to see a market of 600M consumers, earmarking a significant amount to enjoy the various services.
