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With general move towards mobility, content consumption is undergoing a sea change.
It seems on-the-go services are going to be the taste of things to come.
Even for television, Indian consumers are increasingly consuming content on non-TV devices such as smartphones, tablets and personal computers with nearly 200 million monthly video downloads across platforms.
on-the-go market
While the market is still nascent, its fertility can be gauged by the fact that off late it has seen entry of a blitz of broadcasters and telecom service providers vying for a slice of TV on-the-go market.
In 2011, MTNL launched mobile TV services for its 2G and 3G subscribers in Mumbai and Delhi. In early March 2012, Zee New Media launched India's first over-the-top TV distribution platform, Ditto TV, which provides television content to customers on mobile phones and tablets.
Zenga, a pioneer in the mobile TV segment, operates with a 65-70 per cent market share and is reported to have achieved 421 million video views in 2011 compared to less than 150 million video views in 2010.
Companies like Apalaya – with 2 million subscribers and 200 per cent growth; are turning out to be profitable ventures as well.
According to Mr Ravi Kunwar, Manager-North, Nokia India, industry reports suggest that mobile video is used by over 11 per cent of global online consumers.
“Penetration is the highest in Asia-Pacific and among consumers in their late 20s. The reports also state that India ranks 4th in mobile video consumption globally,” he adds. India is reported to have a subscriber base of one million active users of mobile TV, while six million active subscribers have access to 3G services.
Profit Makers
“We started in 2009 and within the next 24 months we broke even. Today, we are a profitable company,” Mr. Shabir Momin, CEO, Zenga TV, admits.
Zenga TV, follows a free model, with 100 plus channels. The model, he claims, is not dependent of mobile operators but works with handset makers and OEMs (original equipment makers) who are his revenue generators. One such example is the Nokia Asha smartphones (Nokia Asha 303), which has a pre-loaded Zenga TV app.
“A Zenga TV user spends nearly 12 minutes watching videos (compared to the industry average of 30 seconds to 3 minutes). Perhaps this has been the reason for our success. Since we work directly with consumers and the applications are embedded directly in handsets, it's easy for users,” Mr Momin says.
Mr Vamshi Reddy, founder and director of Apalaya Mobi TV, is upbeat about doubling subscriber base to 4 million after having bagged IPL V mobile rights.
“There have been issues with high data cost and operator dominated models. But with telcos focusing on high data growth, revenue models are bound to evolve,” he adds.
Currently, market sources say, revenues are split on a 30:70-basis in favour of developers.
Currently hosting a total of 21 channels, Ditto TV has already partnered for content with Multi Screen Media (Sony Entertainment Television), TV Today Network, BBC, and ZEE. This over-the-television offering can be viewed on desktops and other connected devices.
Mr Vishal Malhotra, Business Head, Ditto TV, says, “We have already crossed two lakh downloads a month into the business. Five years down the line, we are targeting 10 per cent of the revenue of Zee Network.”
The Payments
Typically, in an operator network, a consumer is expected to shell out anywhere between Rs 1,000 and Rs 1,200 in an unlimited 3G pack as data charge, apart from a monthly channel subscription rate of Rs 150 for all channels (assume 150). In a per day model, the daily channel subscription is nearly Rs 7.
The user, assuming he doesn't use data for anything else, ends up paying anywhere between Rs 1,150 and Rs 1,350 for mobile TV on a monthly basis.
Compared to a traditional format, this is nearly 200 per cent costlier than a D2H where one gets nearly channels 239 plus channels at Rs 400 a month while high definition (premium) content is charged at Rs 560 a month for 270 channels.
Burden on End Users
But the picture is not as rosy as it appears.
While smartphone penetration has been a blessing for the industry, high data costs, particularly in 3G, is a deterrent. Poor 3G coverage is another issue. Industry sources admit that video streaming on 2G networks leads to pixilated or delayed delivery of video.“(In an operator or app store model) subscribers are charged twice; once by content providers and then by operators. This is not viable. Some other way of monetizing revenues have to be figured out,” Mr Navin Mishra, lead analyst, Cyber Media Research, adds.
Market sources point out that 3G enables video streaming at 100 kbps (kilobits per second) while the same download speed on 2G is reduced to 60 kbps. This apart, picture quality and framing of videos are compromised with. For example, the 2G viewer might see a clip continuously for 42 seconds and then jump to the 46th second of the clip. Pictures will be pixilated.
Some mobile TV players admit that they adopt this procedure to save on downloading time across networks.
“Mobile TV will catch-up only when 3G prices come down. Unless this happens or people take to Wi-Fi networks; mobile TV will not pick up at expected levels,” says Ms Annie Matthews, Head of Alliances and Developer Relations, India, Research In Motion (BlackBerry maker).
Mr Ashesh Jani, Partner, Deloitte Haskins and Sells, says, “The success of mobile TV hinges on how well the 3G rolls out. There are still issues with 3G network with videos freezing up half way through. 4G can be a game changer providing for a speeded up network. For now, the figures are still minuscule to say that cash registers are jingling for this segment.
“Having said that, while telecom service providers are making money on 3G data plan, models for content providers still need some evolving.”
Low Conversion
Mr. Kiran Kulkarni, Managing Director, Goedesic Ltd, makers of Mundu TV, admits that credit card payments are yet to evolve as a popular option. Non-viability of prepaid options has also made developers look at “bundling offers” thereby increasing dependence on operator models. Mundu TV, itself, however, has credit card payment options or uses promotion coupons. Dropouts, after expiry of free periods, are high (nearly 90 per cent, market sources claim).
“While there may be 2,700-3,000 downloads (of the apps) per day, actual conversion (as subscribers)may be just 3-4 per cent,” he says.
However, new players remain upbeat about the market. Jigsee, a one-year-old start up, has come up with video streaming on feature rich GPRS handsets. Jigsee, which plans to break even in 12 months, has 20 million subscribers.
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