Developing a robust paid ecosystem in the digital medium

Focus on the small percentage of paying customers, look at alternate revenue streams & provide experience for a right price, share industry experts

e4m by Abhinav Trivedi
Published: Mar 15, 2013 7:25 PM  | 3 min read
Developing a robust paid ecosystem in the digital medium

‘Where is the money?’ Neeraj Roy, CEO, Hungama Digital Media Enterprises asked a pertinent question facing digital media right now.

“We are at a cusp where digital is providing all forms of entertainment, but as business we are not making enough money. With the existing regulatory framework and the kind of consumers, the question is, how do we have a scalable and profitable business,” asked Manish Agarwal, CEO, Reliance Entertainment – Digital.

Devraj Sanyal, MD, Universal Music pointed out two kinds of consumers – the ones who are paying, although less but are expanding, and second, the ones who want everything for free. “A million paid consumers are better than 500 million non-paying ones,” he said.

Ralph Simon, Founder and Chairman, Emeritus, Mobile Entertainment Forum – Americas said, “Multi-screen interaction is a reality and almost everyone is a 'screenager' – one who consumes content on multiple screens simultaneously. We are looking at a medium that is changing rapidly.

Boaz Ben Yaacov, CTO and Co-Founder, Catch Media questioned whether advertising-funded delivery models are sustainable in the long run.

Companies should look at alternate revenue streams, given that the industry has spoiled consumers by giving them content for free. “Visa’s credit card system is making billions of dollars for the company with micro-payments being charged for convenience which is a sustainable model; it is not advertising-funded but built on convenience and experience. Consumers don't have an issue paying for that. I think that is a sustainable model for content owners and technology platforms,” he added.

Siddhartha Roy, COO – Consumer Business and Allied Services, Hungama Digital Media Entertainment mentioned that consumers are ready to pay for value, which is defined as experience for the right price.”

While Sanyal agreed that revenues were coming in through advertising-funded models like YouTube, he noted that these platforms lack clarity and transparency. To mention the fact that YouTube has started adding advertisement before almost every video. This has not gone down with the users. A customer may or may not be in a mood to see the ad, and beyond a point it becomes intrusion.

Agarwal voiced the view that there was a segment of users for every kind of service. “My belief is that we shouldn't lose sleep over 98 per cent of the non-paying audience. Instead, focus on how to provide good service to the remaining two per cent which itself is a sizeable number.”

The panelists were speaking at FICCI FRAMES 2013 held in Mumbai during the session ‘Developing a robust paid ecosystem in the digital medium’

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