With the digital advertising led video-on-demand category estimated to grow into a ~USD 1bn business opportunity Viacom18 launched its digital VOD platform VOOT, a few days earlier, looking in to cash on the burgeoning market .
Infact digital advertising is estimated to have grown 30 % yoy for the last 3 years, whereas digital video advertising is expected to be a very strong market as well, estimated to be around a billion dollar market in 4 years - time from now.
“India is at the cusp of a digital boom with over 400 million internet users and 200 million+ smart phone users spending significant amount of time online with entertainment and allied content being the prime driver. As more people move towards consuming content online, it is time for Viacom18 to move into the world of connected screens,” said Sudhanshu Vats, Group CEO, Viacom 18.
Viacom18 is moving its entire content library, including COLORS, MTV and Nick, to be digitally available only on VOOT.
While VOOT is currently available for free on iOS, Android and web and delivered over mobile and Wi-Fi networks, the channel will be evaluating both freemium and subscription led models within the next one to two years.
The network also plans to leverage the digital traction of brands like MTV and COLORS, and tap the kids genre which they believe has a huge potential and remains largely untapped. However internet speed remains a deterrent which is set to upgrade significantly with 4G gaining momentum.
“The party has just begun. The game is on,” says a visibly upbeat Vats.
Though Vats does not comment on investment numbers, he agrees this is a large investment for the network. It is the most significant investment for the network after the launch of Colors, according to him.
The launch of Colors, acquisition and rebranding of the five ETV channels (Marathi, Oriya, Bangla, Gujarati, and Kannada) and the recent launch of VOOT have been the three large investments of the network.
Edited excerpts from an interview with Sudhanshu Vats, Group CEO, Viacom18 about the new OTT venture, having 2 million active users at the end of year one, a serious evaluation of the regional market, thoughts on Hotstar and more…
Is there going to be synergy for Network 18 News channels in terms of content for VOOT in the future?
There is a distinction between entertainment and news. Therefore my sense is that this is an entertainment OTT product, the two are distinctly different spaces. The consumer wants to seek something that is different in here. The two genres are different and therefore the way people will look at it would be different.
What’s your take on Hotstar?
That is a more sports centric offering. May be a little bit more male. VOOT is more youth, more happy and colourful; we want to be a happy entertainment space, that is our desire. Like our network, we cater to every Indian.
What can we expect from Viacom 18 going forward in terms of new channel launches and acquisitions?
Lots actually. You saw a movie channel from us, with RishteyCineplex, we are looking at other white spaces as well. We are evaluating the regional space very seriously.
In the next one year, where do you see VOOT going?
The key thing that will be a driver for VOOT is what we call daily active users and we would like to have 2 million active users at the end of year one. That would be a good number and would be a good benchmark. That, by the way, is the fresh number because currently the leader has less than half of that in terms of daily active users.
You said in an interview last year that TV is ruling in terms of monetisation, and India is not ready when it comes to the fully paid subscription model, what are your thoughts on it now?
It has moved, but it has not moved enough even now in my judgement. Smartphones may have doubled in India; roughly by 56 per cent. So, from a 100 million we have got to 160 million smartphones now. My sense is that we would add another 160 million and then get to 300 million, which will be the right mass that you should look at. Second, for a subscription model to succeed, payment eco-systems have to be developed very well. People should be able to pay with a press of a button with ease. Mobile wallets and payment systems are growing rapidly, but that number has to grow substantially.
Lastly, for subscription-only models to come in, the quality of data streaming has to be very good. If the quality of data is very poor would I want to do a paid-only service? Because then what happens is that you might have paid for my service and if that doesn’t ‘open’ or doesn’t ‘run’ as well as you like, you would think that the service is useless and you may not know that this is happening because of the internet infrastructure. Consumers are slowly becoming aware of it, but they are not fully aware of it. Also when you offer a free service to them, they are far more tolerant .There is no doubt that premium models should come and content should command premium. But the market is not ready at this moment but this will happen sooner or later.
How long will it be before India is ready for the subscription model?
I would say anywhere between a year to two years. I wouldn’t say that all of India would be converted, but the number would be reasonably substantial as a base, large enough to have a business model around.
Why is the timing right for VOOT now, with numerous players already present in the market? What is the positioning for VOOT?
It is important to get the right product and this is a space that is evolving so rapidly. I personally feel that we are here at the right time. We are at the cusp of that digital revolution, the time is now. We may need to spend a little bit more on brand building now. But fortunately, we have got the content and the brand. I personally feel if I used an analogy, it would be ‘the party has just begun, the game is on.’
There are two-three clear advantages which we possess. The advantage which we have is that we have launched a digital product. So, ‘VOOT’ is a digital brand. We haven’t brought a TV brand into digital, we have launched a digital brand. That is a clear advantage for us, when I say digital brand, it’s not only a brand name but it is also the philosophy.
We have positioned it around a happy place. In today’s modern age, one thing that everyone is looking for is that short burst of relaxation, happiness, humour because that’s what everyone is seeking and that’s what is being shared as well on social media. Our positioning is very distinct and supported by product and content which is in the area of happy space.