For the next few months, mobile phone users in India can expect to be flooded with special deals on music, sports, regional video channels, religious programmes and games as operators try to figure out how best to make money out of content. India’s top mobile phone companies have started taking baby steps towards what could be their next big revenue driver — monetising content. With voice and data revenue hitting all-time lows and likely to be subdued due to competition, Bharti Airtel, Reliance Jio Infocomm, Vodafone India and Idea Cellular are trying out various models of monetising content they can offer to price-sensitive consumers in India, company executives and experts said. The models may be based on subscription and/or advertising.
“Content monetisation will be a major revenue stream that cannot be ignored considering the reducing data tariff prices in the sector,” said Ajay Gupta, lead communications partner at global consultancy firm AT Kearney. “Global trends indicate telcos, including those in India, are aggressively exploring alternative models.”
Besides content, telcos are increasingly offering enterprise solutions and devices to widen their revenue stream. “In the next five years, telcos would target 20-25% of revenue to come from pools beyond connectivity — be it content or enterprise solutions and devices,” Gupta said. Content monetisation is still in its nascent stage globally and is offered only via data packages, analysts said. China, South Korea and Japan are among the few countries where telcos recently started monetising local content, they said.
According to a study by Swedish networking company Ericsson, the average monthly data consumption on every smartphone in India is estimated to grow almost five times to 18 GB by 2023 from 3.9 GB in 2017. Telcos are betting that about 90% of that content will be via video and are already coming up with various subscription-based plans. “The timing to roll out content-based offerings is just right for us and we are experimenting with different models to see what form of monetisation will suit us best,” said Sameer Batra, chief executive of content and apps at the country’s top telco Bharti Airtel.
Airtel and Jio have tied up with Hotstar to live-stream the Indian Premier League cricket tournament through their respective TV apps for free, but only to subscribers of Hotstar. Vodafone India users can watch the matches on Hotstar free without a lag for the first 10 minutes and then pay a subscription fee. Airtel also offers Amazon Prime subscriptions for free to users who recharge above a certain limit, while Vodafone India offers free Netflix membership and Idea Cellular has signed partnerships with content providers such as Eros, Balaji and Sony Music. Jio has a plethora of such tie-ups and a strong portfolio of its own content, having also bought a music app recently. Such strategies are aimed at improving customer stickiness, with the possibility of charging them later or advertising during a show, experts said.
“The business models around video monetisation and OTT (over-the-top media services) are also at an evolutionary phase between advertising and subscription,” a Vodafone India spokesperson said. “From an overall telco perspective, monetisation completely depends on the pricing that the market finally accepts.” Jio, Airtel and Vodafone currently offer their TV app for free, but are expected to charge at a later date, experts said. Airtel and Vodafone may start charging from July as they have announced their free TV apps till June end.
Mobile advertising platform InMobi has begun a monetisation partnership with Airtel TV, which will give premium brands wider reach on the Airtel TV mobile app and on the InMobi network. According to industry officials, Jio is looking to roll out new forms of infotainment in content-based apps that would be used to hook subscribers. “Later on, they will introduce subscription or ad-based monetisation,” one of them said. Jio did not comment. Analysts said a key challenge for telcos is to come up with content that is relevant and caters to customer needs, such as offerings in more regional languages to meet the demands of tier II and III markets.
Affordable data packs and reasonable smartphones are key drivers
Growing trend of online video watching can lead to a big chunk of data consumption. According to India Mobile Broadband Index 2018, video streaming contributes to 65-75 percent of mobile data consumption in India. This might be a problem as it will lead to high internet bills. However, this is not the case in India thanks to the Jio-revolution. Telecom operators in India have been significantly dropping the price of their internet data offers for the past two years, ever since Jio disrupted the market in 2016. As internet price gets lower, Indians have no worry about binge-watching as long as they want, with no fear of consuming too much internet data.
The increase of smartphone penetration in the country combined with cheaper mobile data that allows consumers to consume as much internet as they want has become a reason for India’s entertainment and media industry to quickly grow, especially in the OTT industry. With the portability that allows consumers to watch their favourite films anywhere they like, together with the availability of any content demanded by consumers, the entertainment and media industry in
4G to boost India’s online content demand
With greater rollout of 4G services, consumer demand for online content will increase rapidly in the coming years, according to a new report. The report by Deloitte notes that 4G will bring complete transformation to video watching or television viewing experience and mark a shift in the control from the broadcaster to consumer. Add to this, low-cost smartphones bundled with low tariff will help in boosting the Internet usage in India,” a Deloitte report said.
4G services increase the capability to offer high quality content. With India becoming a digital platform, even rural users will prefer online content, said Deloitte researchers. The report showed that rural users account for 35 per cent of India’s Internet community, despite representing over 60 per cent of the country’s population.
India has become the third largest country in terms of Internet users. Therefore, the market potential for online content viewing is huge, believe expert. According to Internet and Mobile Association in India (IMAI), the Internet user base will cross 500 million by 2018, with rural Internet users alone being almost 210 million. Traditional TV services are well accepted and direct TV is still the chosen option, but OTT (over-the-top) is the new consumer reality, which is changing ways of TV consumption for large masses, Deloitte said.