'For linear TV, it's an opportunity to create absolute direct-to-consumer relationship'

Avinash Pandey, CEO, ABP News Network, shares insights about the promises Tech-Telecom mergers hold for broadcasters in India

e4m by Dipali Banka
Updated: Jun 29, 2020 9:27 AM
Avinash Pandey

The Tech-Telecom mergers will bring complementary businesses together to enhance core business, enter high-growth markets, and aggrandize service offerings. Avinash Pandey, CEO, ABP News Network, throws light on how the Tech-Telecom mergers will allow broadcasters to achieve scale, acquire technology, talent, and new production capabilities.

Q1. What is your view on the Big Technology companies acquiring a stake in Indian telecom majors? How do you think it will change the Media and Entertainment landscape in India and what implications is it likely to have?

The post-COVID new normal has triggered an increase in content consumption on digital platforms. In fact, we have witnessed a sharp growth spurt on our digital platform - ABP Live, which has been one of the most visited news-platforms during this time, garnering 100M+ views, twice the month of April.[i]Correspondingly, ANN also saw a 62% surge in Facebook engagements in March.

Social distancing has led to a significant increase in the usage of data and technology. From an end consumers' POV, who is consuming content at the last mile, the coming together of telecom, media, and technology will create an ideal scenario, giving the users a window into a world of unlimited escapism and solace. Therefore, in the medium to long term, the business models are likely to evolve at its core. Traditional boundaries between telecom, media, and technology companies will blur to create a unique blend of new and disruptive business models. In the anticipation of this change, investors will be driven to consumer tech companies and this will have long-term implications on traditional media business models.

Q2. The big techs have become content companies and telecoms control the distribution pie. How will these mergers impact TV and other digital platforms?

It will be unfair to tech companies if we classify them as content companies. In the sphere of media & entertainment, where 300 hours of video content is uploaded every minute only on YouTube, content creators will continue to be the most fundamental element in the business of media. The big tech companies are consumer tech companies in reality. Their product differentiation strategy depends on the innovativeness and uniqueness of 3 things - back-end technology driven by AI/ML, data analytics, and user adoption. In contrast, pure content companies will always focus on creating the news, stories, and ideas that impact or influence end consumers’ lives. The content companies will be the lens through which people view their world and themselves. This unique value proposition cannot be replicated by consumer tech companies.

These mergers will, therefore, bring complementary businesses together to enhance core business, enter high-growth markets, and aggrandize service offerings. Internet will be the new electricity and therefore telecom will not dominate distribution, instead converge with media and technology companies to address the market opportunity holistically. For linear TV, this will be an opportunity to create an absolute direct-2-consumer relationship across multiple screens without the baggage of a linear distribution model. The merger activities will allow broadcasters to achieve scale, acquire technology, talent, and new production capabilities.

Q3. The huge data mine that the telecoms have will be accessed by the big tech, on merging. What advantage, scale and new avenues is it likely to bring up going forward?

In today's connected economy, if content is the ‘King’ then data is the ‘Neck’. No doubt data is a critical asset for any business and access to data is undeniably needed to thrive, compete, monetize, and succeed. The ability to analyze data to draw meaningful insights will determine how well you understand your consumer, tailor-make your offerings and become more cost-efficient. Even for traditional media companies to kick start a journey towards digital transformation, they have to realize the importance of Big Data and its crucial role in their long-term success. Insights from data will be used for improved decision making, reduction in customer churn, optimization of content, and increased convergence through ad optimization. The avenues data opens up has massive potential to scale growth, productivity, and monetization.

Q4. Will these mergers create more walled gardens or will the factor of net neutrality come back?

In a capitalistic marketplace, ‘exclusivity’ of relationship with direct consumers enables businesses to create a monopolistic market place for themselves. While the temptation to create walled gardens and curb net neutrality is an idea that may seduce few business owners, in the long term it kills innovations. Therefore, it is important at a policy level to keep the internet an open playing field for innovation to flourish; and for new companies and technologies to grow. If a handful of internet providers would have blocked or limited video streaming in the early 2000s, OTTs, or YouTube might not have existed today.

[i]Source: Comscore Video Matrix April

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