'Tech-media-telecom convergence is an opportunity for large start-up ecosystem'
Pradeep Dwivedi, CEO-India, Eros International Media Limited, talks about impact the convergence will have on the Indian Media & Entertainment landscape and more
As the tech-media-Telecom ecosystem converge, it also builds value proposition in segments like digital e-commerce, physical commerce, entertainment and news content consumption, where big technology companies can gain by riding piggyback on the telecom network. Pradeep Dwivedi, CEO-India, Eros International Media Limited, talks about impact this convergence will have on the Indian Media & Entertainment landscape and the new business models that it is likely to empower.
What's your view on the big technology companies acquiring stake in Indian telecom majors, and how do you think it will change the Indian media and entertainment landscape?
The convergence that has been predicted between telecom-media-technology(TMT) is now finally coming to the fruition. The value that the consumer gets is an amalgamation of all the three. For big companies that are well funded, the idea is that if they can extract revenues and market share and share of mind by actively participating in more than one part of the convergence chain, they gain a lot. So clearly a technology company which is well funded would then want to get into the content, distribution and even handset side of the ecosystem. So clearly the motives are financial integration of the value chain.
In the Indian context, there are large population opportunities which are now becoming internet savvy and hence telecom and mobile ecosystem is coming under a lot of interest. So from a technology and market perspective, India with around 1.4 billion population becomes a lucrative market for US based technology giants. The series of investments that private equity majors are doing in Reliance Jio is an indication about the market attractiveness, technology readiness and more importantly consumer willingness to pay for content.
What is your view on the advantages these tech majors will bring in when they collaborate with Indian telecom companies?
The telecom companies have access to consumers, so the handshake is actually happening through them and with the concept of net neutrality, telecom operators are obligated to provide equivalent services to the consumer. The advantage that some of these platforms bring by partnering with telecoms is that they will be able to get a better understanding of the customer. And depending on usage patterns, demographics, the geographical dispersion of the audiences they can define and customize better products to appeal to those audiences.
For example, Facebook's investment into WhatsApp was largely around capturing a large ecosystem of a messaging service which was gaining popularity in the world. And clearly since WhatsApp was not running ads, Facebook had to go ahead and launch, you know WhatsApp for business, which then they could monetize in a certain way.
But beyond that, even for WhatsApp to go to the next step from just being a messaging platform to a messaging cum commerce platform, they would need to get into the digital payments ecosystem, which for whatever regulatory reasons, they could never really get it. Now the advantage of working closely with Jio is that Jio already has a Jio wallet. And I'm speculating here, but perhaps there is an opportunity for Jio and Facebook to collaborate to create a more compelling wallet feature for the audiences or the subscribers that are largely tied into the aggressive tariff plan and good quality of services of Jio on a pan country basis.
So, there is a value proposition in many segments like digital e-commerce, physical commerce, entertainment and news content consumption, where big technology companies can gain by actually riding piggyback on the telecom network.
Also, telecom companies in India are under various AGR obligations and struggling due to huge financial liability. These investments also allows them to perhaps defray and pay off some of these obligations and ensure their own survival and sustainability in the long run.
What new business models and avenues are these partnerships likely to bring up?
Clearly, the way I look at it is the sky's the limit, you know this is one of those pivotal moments where they say it's a bit of a carte blanche mandate, a white paper mandate and you can draw almost anything on top of that. Big tech majors and their desire to connect with consumers compounded by having access to the pipes that actually provides the handshake with consumers will transform and impact every sector right from healthcare, education, commerce or even banking. I can't imagine any sector which is not going to get impacted by it.
It also provides a brilliant opportunity for a very large startup ecosystem to flourish, because even though this combination provides a lot of vanilla services to the consumers, there will be opportunities for specialized solutions to emerge by startups.
Taking a hypothetical example of Amazon, in case it happens to tie up with any telecom major in India, there could be a startup with the ability to create a longer delivery value chain, which then feeds into the Amazon network and allows it to go beyond the that it already has in India.
There is an opportunity to disrupt a lot of existing business models, in logistics, distribution, pure play content consumption or even creating new forms of content that can be consumed by audiences in different way. For example, a news app like that of TikTok which provides 30 second bytes of news as a stream, continuously on a channel. It could be around sports, entertainment or music.
I think this decade 2020 to 2030 is actually going to transform the Indian economy into a true blue digital economy which will thrive a lot on these collaborations between technology majors, telecom players an evolving consumer segment.
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