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India’s digital demography: On an accelerated path

India is likely to be home to a billion digital users by 2028 compared to our earlier projection of 2030, with a faster upward progression of users in each of the cohorts:

Media and Entertainment

Age, income and location will become even less of a barrier to digital adoption and India as a nation is likely see an accelerated transition from passive, video viewers to legitimate digital mainstream consumers. To acquire and retain the value conscious Indian consumer, it is likely that digital ecosystems, which offer multiple use cases under one umbrella, and seek to provide a seamless experience, would emerge as the frontrunners to capitalise on our digital billion.

Gaming: A vital cog in the digital ecosystem play

  • ‘Direct to Consumer’ platforms across the digital value chain are starting to look at gaming as a critical use case which would drive greater consumption, optimize customer acquisition costs (CAC) and help user retention in the long term
  • From OTT video platforms such as Zee5, MX Player, Sony Liv; to e-commerce platforms like Flipkart, Amazon; to digital payments players such as Paytm; digital businesses across the board are looking to harness the engagement opportunities provided by gaming
  • Apart from user acquisition and retention, cross product monetisation on the platform, a better understanding of consumer behavior, targeted advertising and rich data for customer analytics are some of the benefits that gaming as a use-case provides digital platforms.

NTO 2.0: A fine-tuned version of NTO 1.0

Following consumer push back due to increased complexity in channel selection and increased prices post NTO 1.0, TRAI issued a set of amendments promoting a la carte selection while capping prices of channels and restricting the number of bouquets available.  Given, the potential adverse impact on economics of broadcasters and distributors, there has been resistance from the TV segment stakeholders.

Expected impact of NTO 2.0 on key stakeholders:

  • Broadcasters: Subscription revenue slow down due to channel price caps for inclusion in bouquets and capping of bouquet discounts to 33 per cent
  • Distributors: Negative impact due to cap on NCF to INR 160 per month for more than 200 channels and lower NCF for subscribers with more than one TV connection at home
  • End consumers: Upside due to lower subscription prices driven by bouquet price capping, lower NCF and greater flexibility in selection of a la carte channels.

This has been legally challenged by the broadcasters and distributors. We assume that NTO 2.0 will likely be implemented during FY21 and will accordingly reflect in the TV segment projections.

Standout genres: News, kids and edutainment

  • News:  With deeper penetration beyond Tier I and Tier II cities, rise in literacy levels and favourable demographics, news consumption has witnessed a healthy growth in the past few years.  A rapid expansion of mobile web access has also paved way for digital media growth. The COVID-19 pandemic gave a further impetus to news consumption albeit with a paradigm shift in the news consumption pattern. Constraints around the distribution of physical newspaper during the lockdown led to an immediate sway of eyeballs towards TV and digital
  • Kids:  The kids genre witnessed a spike in viewership during the COVID-19-induced lockdown combined with the onset of summer vacations.  With kids spending more time at home, viewing periods have extended through the day attracting increased attention from advertisers. OTT platforms have also recognized the power of this content to drive viewership seeing increased investments.  Gamification and education with the amalgamation of entertainment and learning are the new frontiers gaining attention
  • Edutainment:  The emergence of ed-tech and a growing focus on engagement in learning across all learner groups combined with the ongoing lockdown, has unlocked the potential for technological interventions from traditional M&E players.  The edutainment market targets both child and adult learners, with an emphasis on improving quality of education and learning outcomes.  By providing edutainment options, media companies can widen their customer base, increase consumer lifetime value and increase user engagement. 

The video content supply chain: Disruption necessitates innovation

COVID-19 and the resultant nation-wide lockdown has disrupted the video content supply chain necessitating innovation.

  • For the entire process of content creation and to get the content to users’ screens, technological intervention has become a necessity. This use of technology is being seen across the value chain, right from the adoption of remote collaboration tools and software for pre and post-production, to extensive use of cloud infrastructure, and the use of gaming engines to produce content virtually
  • Multiple aspects of the current content supply chain processes are manual and require in-person involvement, which leads to inefficiencies in terms of costs and lead times. Incorporating technology as a solution may lead to efficiencies across the supply chain in terms of costs savings on physical locations and offices, as well as potentially lower lead times.

While technology adoption is going to present some challenges in terms of investments during the time of a pandemic like skill development and the shift to a digital-first mindset; change in terms of incorporating technology is inevitable. 

Leveraging technology across M&E

Technology innovations are seeing greater integration across media businesses. The following emerging technologies are beginning to see greater traction and use cases across segments and have the potential to disrupt the status quo.
M&E