The Confederation of Indian Industries (CII) has released a report on the new vectors for growth for the M&E industry at the 5th edition of the Big Picture Summit 2016, which is currently taking place in Delhi. The Boston Consulting Group (BCG) were the knowledge partners for this report.
BCG conducted a survey of around 20,000 consumers over two years to analyse media consumption trends. The analysis revealed three vectors along which the industry can create explosive growth are digital, rural and supply.
According to the findings of the report, with smartphones and mobile data becoming affordable, it can be estimated that the number of connected rural consumers will increase from about 120 million in 2015 to 300 million+ in 2020, growing over 30 per cent YoY. This is basis the current telecom infrastructure and can leapfrog further if connectivity becomes ubiquitously affordable. Once connected, rural consumers' media time spent grows at a faster clip than urban counterparts. Unlocking pent up demand the rural consumer is willing to bridge the 30 per cent consumption gap versus urban counterparts, once they have access. Estimates suggest that access growth within rural could open up to approximately 200-400 million new consumers (across media).
The report further said that digital is an equally potent lever, with digital consumers sending approximately 1.5x the time on media versus unconnected counterparts. No variable segments digital, as this consumption spike shows across demographic and income variables. The only driver for digital consumption is digital age with consumers that spend more than 2 years online showing an inflexion and significantly higher growth.
The writers of the report stated that if the industry is able to create differentiated supply, audiences will consume more, very often stretching time spent on media and moving to multiple screens. This is perhaps the primary driver for disparate media consumption across states, where states with large supply of relevant local language content have been able to capture higher time form audiences, said the report.
On organising this summit, Chandrajit Banerjee, Director General, Confederation of Indian Industry said, “We are extremely thrilled to bring forth the fifth edition of our annual flagship event - The Big Picture Summit - for the Media and Entertainment sector. With this collaboration, CII and BCG together aim to bring out enlightening insights from the sector. The government, regulator, academia and civil society will join the discussion to suggest new ways to achieve the mark of a $100 M&E industry. “
Adding to that, Sudhanshu Vats, Chairman, CII National Committee on Media & Entertainment and Group CEO of Viacom 18 Media said, “The CII Big Picture in its 5th edition will bring together bright minds of M&E leaders to navigate a successful path that would take our M&E sector to $100 billion. During the two days of this summit, M&E leaders will make bold predictions about the future of media and provide insights and diverse thinking on the new disruptions and new business models on the fast changing M&E environment.”
According to Kanchan Samtani, Partner at BCG India, “Digital consumption of media represents a large database of consumption patterns, viewing habits and consumer content preferences. Leveraging this data intelligently can help content creators customize new content to consumer tastes and preferences to create targeted hits and subsequent success. With this, India's rural growth story is sure to replicate China's growth in rural consumption as observed in the past. As penetration and content supply for digital media increased in China, smartphones replaced TVs as the preferred viewing screen. Today, China's rural consumers spend more time consuming digital media when compared to other media forms”
While these growth trends can be capitalized and some (e.g. higher rural distribution) might even be secular, the industry needs to find ways to monetize increasing time spent said the report, while further adding that analytics will be on the biggest unlocks moving from consumption to monetisation.
Among other points raised in the report, the authors of the report state that players need to move away from monetizing broad audiences to creating the right segments with who they are targeting – "identify" and when they are targeting them – "context". BCG's global studies suggest that context and identity can help content providers raise realisations from advertisers by as much as 2-5x.
“The industry also needs to come together to solve for key challenges like talent, redistribution of monies across value chains and working with the regulator to create a positive environment. In summary, there is significant potential for the industry to grow consumption and monetize that growth. However, these are not secular trends and will face headwinds from time to time. The industry's fate is in its own hands, M&E shall reap what it sows,” the report stated.