Spiraling online consumption
India has emerged as one of the fastest growing markets for online video consumption. Keeping this in view, a global digital media brand can further spice up the market.
The year 2013 started on a disappointing note for me. iStream.com, the Video on Demand (VOD) play I created, shut down in April. But I believed in the online video space due to its spiraling consumption. In 2013-end, I launched Pepper Media, an online video production and distribution hub.
The market dynamics had hardly changed as we didn’t see another iStream taking shape.
Videos a hit in Indian market
The business model for a video product continues to be challenging, with Indians not used to paying for content. Millions of people consume videos online and increasingly on handheld devices. India, in fact, has emerged as one of the fastest growing markets for the likes of YouTube, reaffirming my belief in the efficacy of the space.
Monetisation biggest challenge
But while there are millions of eyeballs, is there a viable and sustainable business model for the online video space?
Monetisation continues to be the biggest challenge in this sphere. The figures are in tens of millions -- 300 million internet subscribers, but money from ads are not pouring in. And, even for the bit that is happening, the rates are ridiculously low compared with a market like the US.
So what are we missing? Why isn’t money from ads flowing in to a medium that is the most transparent? Why aren’t brands and media-buying houses betting aggressively in a space that is seeing incredible traction among consumers?
If you are looking at scale, one needs to discover or invent an alternate to the current video monetisation model. I know that this is the elephant in the room for many a VC (venture capitalist).
Merging brands with content
As we strive to build a large multi-channel network (MCN) -- bringing together content creators, content owners and celebrities -- the key challenge will be in bringing to table the most critical component i.e. brands.
The answer could lie in merging brands with the right content. While it is given that a bulk of the digital ad spends is moving to online videos, the number is still low compared with the overall figure.
As someone who has been part of the online video ecosystem for the most part of the last decade, I believe that it is our job to lure brands to open their minds and their purses.
One needs to acclimatise them to real data and to the tangible bang for the buck that online videos garner. It would mean building tools that would help brands build engaged audiences and monitor their influence metrics. It would also mean creating customised decks for brands that would help them analyse the impact of their video campaigns on platforms like YouTube.
Online, a cost-effective medium
In nutshell, show them that there is no better cost-effective alternative to TV campaigns than taking it online. Technology will play a key role to help build that perception and simplify the model for brand managers. Technology will supplement strong content concepts, which brands and audiences can relate to.
Building sustainable online ecosystem
We made a beginning when we launched India’s first online reality show for fashion designers, sponsored by a leading fashion brand. By using a platform like YouTube to build a community of aspiring designers, we have a concept that a fashion brand can closely relate to.
The good augury is that many more brands are starting to believe in the model where content creators and brands will come together to build sustainable and monetisable concepts, products and global audiences.
The author is Radhakrishnan Ramachandran the Founder and CEO of Pepper Media