TV broadcasters look to monetising the digital beast in 2015

Consumption of video content on digital platforms on the rise; revenue contribution of digital platforms likely to shoot up in times to come

e4m by Collin Furtado
Updated: Jan 15, 2015 8:11 AM
TV broadcasters look to monetising the digital beast in 2015

In 2014, television channels had put in a lot of effort to increase their presence online -- be it mobile phones or streaming of live web content. Some even invested or acquired rights to create new content for their digital platforms. While mobile phones are a key growth area on the digital front in terms of video consumption, other online platforms of TV broadcast seem to be gaining momentum.

Digital consumption goes viral

The digital drive has mainly been in the mobile TV platform. With smartphone penetration set to get deeper in India, there has been more concentration on increasing the presence of new services, applications and content. There is a growing consumption of video content on digital platforms.

According to Digital India 2014 report by Ideate Labs, there was a 27per cent increase in the Indian online video audience from 2013 to 2014.

According to comScore, online video consumption in 2013 had doubled than what it was two years ago. The total online video audience in India had then grown to 74 per cent to 54 million viewers, with the average viewer watching 18 per cent more videos and spending 28 per cent more time.

TV channels treading digital way

MTV, part of Viacom18 network, is one channel that has been at the forefront in the digital space. Its endeavour on the digital arena started around four years ago, making it a frontrunner. Apart from specially curated content of TV shows on its digital platform, MTV has web-specific branded and non-branded content.

Its shows like Roadies, which was telecast weekly on TV was webcast daily. For Season 10, it had Airtel internet as an official sponsor. Besides, MTV has had an enormous success with branded content, wherein brands tie up with the channel to create content specifically for digital platforms.

Nano Drive with MTV for instance had 10.5+ million video views, while Ceat MTV Chase the Moon received 6.71+ views and Durex MTV Rex Talk -- which is going on and 70 per cent of the show still remaining -- has already received 2.5+ million views. Besides, the shows have done well on social media platforms such as Twitter, Facebook and Instagram.       

Multi Screen Media (MSM), which had launched its online platform around two years ago, kick-started -- a web platform for only sports -- in 2014 just before the FIFA World Cup. With the acquisition of digital rights for the World Cup, MSM also started live streaming of the game on its sports portal.

Star India too launched its digital platform for sports content in 2014, This was apart from, the group’s digital platform that already exists for their Hindi GEC content. provided on-demand live video content to subscribers as well as videos and clips on highlights of matches.

Besides, Ditto TV, the digital platform of Zee Entertainment Enterprises Ltd. (ZEEL), was launched three years ago. The video-on-demand digital platform has 3.25 lakh paid subscribers, 5 million subscribers and over half-a-million downloads. This digital platform is present in 176 countries, including India. It also has an app to strengthen its reach globally. The Over the Top (OTT) platform offers content from channels such as Sony TV, SAB TV, Colors, National Geographic, Times Now, ET Now and Zoom, other than Zee network. 

Besides, there were TV broadcasters who launched their own digital platforms like Nickelodeon. Disney India recently launched Bindass Play app for its new music channel. History TV18 app launched in 2014 also has digital-specific content for viewers.

Digital revenue pie to increase

The revenue contribution of digital platforms still continues to be less compared with the total revenue pie for TV broadcasters. This can be expected to rise as it is still in its nascent stage.

According to Digital Advertising in India report by Internet and Mobile Association of India (IAMAI) and IMRB International, the digital advertising market size in India was around Rs 3,575 crore in the last fiscal and is expected to grow by 30 per cent this fiscal. This is small and doesn’t quite take into consideration the revenues generated by branded content on digital. The present revenue contribution of digital to TV broadcasters is expected to be around 5 per cent. However, it is expected to grow to 10-15 per cent in few years due to mobile advertising.

“We are looking at web not as an engagement tool anymore but as a heavy monetisation platform,” says Ekalavya Bhattacharya, Head-Digital, MTV India. “It is not just engagement and reaching out to more people. It is hygiene for us. We are on a digital platform not only for eyeballs but also for money,” he said.

He added they have been working on branded content for the past four years. “We are the only ones who manage to crack multi-crore deals on web for branded content. The three seasons of the Tata Nano drive with MTV are already complete. Imagine a web show competing three seasons and going for the fourth,” he said, adding that it was one of the highest revenue-earning shows for MTV.        

“While 2014 has been a year of consumption for the mobile content, 2015 will be that of advertising for the platform. Once consumption comes in, advertisers will start seeing it. Also, the number of advertisers coming on video is increasing significantly, which is exciting. Our estimate will be 50-60 per cent higher in terms of the overall mobile advertising alone as the category will grow in India,” said Uday Sodhi, EVP and Head – Digital Business, MSM.

At this stage, most broadcasters follow a revenue model, which is part subscription as well as advertising-based. However, advertising accounts for a major part of revenue on the digital front for TV broadcasters today. This differs from countries like the US, which uses more of a subscription-based model or a combination of both. While Netflix is a purely run on a subscription-based model, Hullu has something in between.

Monetisation biggest challenge

Though it will be advertiser-driven models, broadcasters are looking at ways of monetising their digital properties.

“In the last one year, we have seen new avenues of monetising digital properties. We have taken the route of creating branded content for clients on digital platforms. From that sense, our monetisation capacity has gone up manifold and it has given us a new horizon as far as making a revenue based on digital properties is concerned,” said Nikhil Gandhi, Vice-President and Head of Revenue, Media Channels, Disney India.

On creating branded content, Sodhi said, “We are also looking at special content for digital. On one hand, we are talking to advertisers who are showing interest on branded content, while on the other, we are talking to independent digital content creators and seeing how we can use their expertise to reach out to consumers. We are aiming at expanding the content bucket and ensuring that our product is available across each connected device. We are also getting a lot of positive feedback from advertisers.”

However, some broadcasters believe that there are certain problems faced in terms of monetising on the digital front. One of the problems is data usage prices being high, especially on mobile platforms. As a result, broadcasters have to offer content to viewers at cheaper rates.

“The biggest challenge for digital is monetisation. Nobody talks about that elephant in the room. Everybody talks about digital. For example, 1GB of data costs around Rs 500. In 1GB data, you will get about three hours of content. This content if you had to buy, you would probably buy it for less than Rs 10. So, the distribution method is costing you Rs 500 and your content is only costing you Rs 10. I find this as a complete imbalance. And this is what most broadcasters are struggling with. They are giving their content at affordable prices to customers, but the method the customer can use to download that content or view it on digital is proving to be phenomenally expensive and does not make it affordable to watch a lot of videos in the long run. So until this cost of data consumption comes down to more affordable levels, there is no digital video play in the country,” said Keertan Adyanthaya, Managing Director, NGC Network India and Fox International Channels.

“We are making money today because four years ago we had the vision. All consumers are shifting and consuming content on other platforms with television and getting themselves immersed in an experience not just limited to a TV screen. If you cite monetisation or lack of it as the reason, why are you not in that space? Your strategy is not in sync with future. It is in sync with this quarter or this financial year,” said Bhattacharya.  

Digital revenue to shoot up

However, Vibha Ghosher, Senior Vice-President (Digital) at 9X Media, believes that revenues on digital platforms for broadcasters will increase significantly. She feels that though there are problems on the infrastructure and pricing side, they will definitely go with the arrival of 4G and the increasing consumption on digital platforms.

With higher bandwidths soon to be introduced in India and smartphone penetration set to increase significantly due to cheaper models available, we can expect revenues to go up for TV broadcasters. On the monetisation front, TV broadcasters  investing in digital platforms  can expect to monetise after a few years only. While 2014 has been a year for investing in digital platforms, this year onwards we can expect higher growth from the sector.

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