My reading of the Indian broadcast and cable eco-system The Indian eco-system is currently going through once-in-lifetime event of digitization. However the benefits of the first phase of digitization of 25 mn homes have largely remained elusive because of lack of direct billing to consumers, monthly collection controlled by LCOs, low end set-top boxes and absence of return path in the cable system. The first 25 mn digital STBs that have been installed are low end $12-14 boxes lacking in advanced features like DVR, Push VAS, Wifi etc. The current system of carriage fees is ensuring that content & channels tailor-made for smaller but more affluent audiences cannot find its way on the cable system. The lack of return path in the cable system and billing controlled by the LCOs is gating the content providers to make their rich content library available via VOD services utilizing the cable infrastructure like it is done in the other advanced nations. In absence of ubiquitous availability of DVR services, YouTube has become the default destination for “time-shift” or “catch-up TV”. Content owners are also fueling the phenomenon of “binge-viewing” by making full episodes available on YouTube. The second screen & social TV experience is largely absent forcing consumers to rely on old legacy based EPG system provided by the MSOs. It is hard to implement a “search and discovery” experience on old legacy EPG system. This does not help broadcasters who distribute and monetize a bouquet of channels and need to drive viewership & subscription across different genres of content. There has been little attempt to create a synched experience between primary and secondary screen using ACR technology. This leads to loss in revenue on account of in-ability to create additional ad inventory during LIVE events and enabling Mobile-TV commerce. So why am I bullish about India? There are three important converging events that are going to happen in 2014-2015 time-frame:
- It is forecasted that 200 mn smartphones will be shipped in India in 2014. This number could be higher given that Google in partnership with Micromax, Karbonn etc will ship Android One this fall priced at less than $100.
- Aggressive roll-out of 4G services by different Telcos will lead to rapid expansion in user base as well as possible decline in prices.
- It will be possible to solve the return path problem for the cable system in 2014-2015 using a hybrid approach of smartphone and cloud connected streaming servers deployed at the MSO level. In 2014-2015 there is a high likely hood of TV homes also having a smartphone phone. Using the hybrid approach content creators could launch VOD services etc without making major changes in the existing cable infrastructure.
So what should Indian broadcasters focus on in the next few years? They could take a more holistic approach and focus on four big opportunities:
- Make the content available on any device, anytime on any broadband and data service infrastructure: This is relatively easy to execute as long as they take the “Platform-serving-Apps-via-API” and Adaptive Bit Rate Video Streaming approach. This approach will allow them to make apps available on multiple platforms and many devices and serve them on any network. To put this in context, Netflix manages 1,000 different builds across iOS, Android, Windows and various connected TV platforms. The Netflix consumer experience is fairly decent on any network.
- Personalization & discovery experience to consumers: Delivering IP based videos to personal devices forces broadcasters to abandon old EPG based approach of linear TV. You have to combine social signals, individual tastes and preferences, trending data and algorithm to create a personalized experience for consumers. If the content owner has a large and deep content library then creating a rich discovery experience becomes paramount.
- Synched Second Screen experience using ACR technology: The content creator has to deliver an immersive experience on secondary screen while the consumer is watching content on Primary screen. ACR enabled viewing experiences can include live polling, viewer alerts, social interaction and highly synchronized additional content and advertising. The content creators could easily pioneer Mobile-TV commerce in India, a space which is currently wide open.
- VOD service utilizing the existing cable system by solving the return path problem: While it is important to fight YouTube in the IP enabled video world, the Indian broadcasters have a huge advantage in the cable world. They can easily launch a smartphone based VOD service and partner with the MSOs to deliver the demanded content directly to an addressable digital STB via a streaming server deployed at MSOs. This technology is currently available and can be deployed on scale without changing anything in the current cable infrastructure. The monies can be collected directly from the consumer bypassing the LCOs and preventing the inherent leaks in the system.
As per comScore Oct 2010 data more than 175 million U.S. Internet users watched online video content for an average of 15.1 hours per viewer (http://bit.ly/ifjfFQ). Social video curation is process where after watching a video the user shares that video with his social network by either posting it on his Facebook wall, Tweeting the video link or embedding the video on his blog etc. On an average each user has approx 220 friends on Facebook, approx 30 followers on Twitter etc. Each user by the process of social curation creates a large multiplier effect and creates a rich volume of real-time data which could be more useful than the TV rating systems. Now imagine a service that takes this large volume of curated video data and leveraging machine algorithms creates a compelling video discovery experience that mimics broadcast TV but has all the smarts running in the cloud. The experience (unlike broadcast TV) is personalized and consumers discover videos that people with similar tastes are watching and what is trending in real-time. Services powered by social curation will fundamentally impact the search business and connected devices business. The manner in which they will impact each of the businesses are summarized below:
1. Impact on share of online minutes of Search: Video creates large amount of online minutes. As per comScore the US user watched 36.5 BN videos and consumed 156 BN minutes in the month of July 2010. Data is already showing that people are spending more online minutes on social networks like Facebook and Twitter than on Google. With social curation of videos the consumer is more likely to discover videos in his Facebook News Feed or in his Twitter feed rather than searching for it. As per TubeMogul research referral traffic for online video from Facebook and Twitter is growing faster than search engines http://bit.ly/9WkMQw. The problem in past has been that social networks like Facebook, twitter etc have not created a rich consumption experience across devices like touch enabled tablet, 10 ft experience on connected TV or on smart phones. A services that uses curated video data to create a compelling consumption experience across devices could lead to greater consumption of videos on these services. Hence the consumer would have lower propensity to search. In the future these kind of video discovery services could potentially garner a larger share of online minutes (probably at the expense of search).
2. Impact on devices: Currently the device manufacturers are taking a fragmented approach to online video. The current approach is to allow content owners to put their apps on the App store/platform of the device manufacturer. The content owners are expected to do most of the heavy lifting in defining the consumer experience and in deployment across different App stores. With social curation becoming another compelling way to discover videos the user would want a service that helps him consume curated videos from multiple sources all at one place. In the future the device manufacturers (tablet, connected TV, smart phone) could start offering a video discovery service that aggregates curated content from multiple sources and creates a personal experience powered by an individual’s social connections. The video discovery service would be expected to do most of the work in defining the consumer experience across different devices. Will this video discovery service be owned by the device manufacturer or will it be a 3rd party service is a million dollar question. The likelihood of this being a 3rd party service which works across different devices and brands is highly likely.
When we launched our product globally we decided to run campaigns on both Google and Facebook. I put equal amount of money on Google Adwords and Facebook for CPC campaigns. I also ran similar campaigns with more or less the same ad copy to measure the performance on Google and Facebook. Our product Shufflr requires users to download the app and then register. Hence I was measuring the performance of Google and Facebook in delivering registrations for Shufflr. I had some interesting learnings which i would like to share:
1. Over a period of one month I got 10-15% lower CPC on Facebook vis-a-vis Google
2. The number of registrations from Facebook campaigns was approx 20% more than registrations from Google
Overall CPC campaigns on Facebook were more effective and gave a better ROI than Google. There are probably a couple of reasons for that:
1. On Facebook I could target users by their place of work. For Shufflr we targeted users from technology companies like Google, Amazon, Oracle, Cisco etc. Probably these users understood the value proposition of Shufflr much better which lead to more registrations
2. Shufflr requires users to download Adobe Air. With Facebook I could target users who had shown their “interest” as Tweetdeck which meant they probably already had Adobe Air installed
3. We have a Shufflr page on Facebook which had approx 850 fans. With Facebook I could target friends of people who were already fans of Shufflr. When the friends of people who are already fans of Shufflr page see the ad it shows them below the ad “X likes Shufflr”. This probably lead to better click-thrus
4. Though I don’t have insights into the way the algorithms of Facebook and Google run, my suspicion is that Facebook is using customer click-thru data to target ads. For example if I clicked on an Oldspice ad and landed on the page and clicked on the “Like” Button then Facebook uses this data to target other friends in my friend list and shows them the Old spice ad. As more and more friends in my network click on the Oldspice ad and click on the “like” button the CTR keeps improving.
5. The combination of Facebook page “Like” button and the Facebook CPC campaigns delivers better targeting and hence improved CTR’s. So using real-time data on consumers clicking on the “Like” button on the CTR’s for campaings, Facebook does a much superior job of optimization than Google.
As a user of both Facebook advertising platform and Google Adsense I have found Facebook delivering better ROI. The Facebook Fan page and the “Like” button are very powerful missile in Facebook arsenal. I am sure other advertisers across the world are discovering the same truth and having similar experiences. To this mix add the Facebook Search which I suspect Facebook will launch at some point of time. Facebook will use the “Like” button click data to create a new page ranking system which will deliver more accurate search results because now your social network is curating content for you.
With 500+ million users who are logged on most of the time on Facebook and are clicking on “Like” buttons on Facebook as well as third party sites, Facebook is clearly winning on the ad platform. Let’s see what Google pulls out of it’s hat when it launches its version of social networking.
Over the last one year I have constantly come across this phrase ” The winner takes it all in the digital space”. Being made of sterner stuff I ignored it, till now. In the last few months having launched a product meant for a global audience, I have begun to pay more attention to this phrase. Some of the observations that I would like to share are as follows:
1. Twitter and the social media phenomenon is forcing bloggers and journalists to pay more attention to “getting the story out first” than actually going in depth of the story. Getting the story out first has definitive advantage in creating velocity for the story i.e more retweets and social mention which then drives the Google SEO.
2. Because of the obsession around velocity of the story the focus is on companies that are very newsy or can drive a lot of retweets and social mentions etc.
3. The companies that happen to be newsy are invariably Facebook, Twitter, Google, Microsoft, Hulu. So most of the journalists and bloggers are super focused on stories coming out of these companies or stories around these companies.
4. The fact that the PR machinery of these companies are super connected to these bloggers and journalists does not help matter
5. So you now have a situation where most of the stories written are about these newsy companies. These stories are then tweeted and retweeted making these companies more newsy. It is like the self-fulfilling prophecy where the noise about these companies overwhelms the consumers and he then pushes it further in his social network and the chain starts all over again.
According to Compete, a Web analytics company, the top 10 Web sites accounted for 31 percent of US pageviews in 2001, 40 percent in 2006, and about 75 percent in 2010. “Big sucks the traffic out of small,” says Yuri Milner a Russian Investor. “In theory you can have a few very successful individuals controlling hundreds of millions of people. You can become big fast, and that favors the domination of strong people.” Milner owns 10% of Facebook today.
More and more small developers who cannot compete in the open internet space are building apps meant for platforms like Apple where the chance of being discovered is higher. In this scenario the success of small companies like Zynga, Foursquare, Groupon etc is very valuable.
At the World Newspaper Congress at Hyderabad this week Dow Jones CEO Les Hinton took on Google and used some strong language to stir things up. He call Google a digtial vampire and a parasite. He goes on to further bash the internet content Kleptomaniacs whose business model depends on purloining the expensive journalism of mainstream media. You can read more about what he said over here http://bit.ly/8ElVhqe
The issue that i want to highlight is what gives the Newspaper industry so much courage to take on Google. Is it foolhardy or is it based on some statistics. So here is the rub. With the rise in social media the landscape has changed dramatically. In the same conference Associate editor of Daily Mirror, Matt Kelly shared why his company is relying less and less on Google SEO. According to Matt Kelly the traffic from Google Search is now much lower than what they are getting from referrals, bookmarks and Social Media platform like Twitter and Facebook. To quote Matt Kelly ” Crucially, traffic from search engines is ridiculously low for a newspaper website. Around 15 percent for MirrorFootball and less than 10 for 3am. That means the vast majority of traffic has either come from bookmarks, or a referral from an informed source. We get a lot of traffic to both sites from social networks like Twitter and Facebook. Not recommendations from a search engine, but from a friend. That’s how to grow a meaningful audience.” You can read more about what Matt Kelly said here http://bit.ly/61Q4PW
There is a big shift that is happening from consumption view-point. There are two distinct consumer habits that are emerging:
a. More consumers are getting breaking news from Twitter
b. More consumer are reading content and watching video on Facebook.
These two phenomenon is like the gift from heaven for the Newspaper industry. They can now look at sources other than Google for reaching out to customers. With Facebook at 350 mn users and Twitter at more than 55 mn users the balance of power will shift. Now here is the interesting bump in the road. As consumers who share the content through Twitter or Facebook can also write comments or rate the piece of the content the Newspaper industry will find it-self open to scrutiny and harsher criticism. What you will see going forward is this very lively interaction between consumers (who are passionate enough about the content to share it on Twitter and Facebook) and the Newspaper journalists. The journalists will now have to deal directly with it’s consumer. This can be both a boon as well as a nightmare. I sincerly hope the newspaper industry truly understands what is coming their way and are fully prepared for it.
For last 150 years, traditional media has had it’s own version of curation and recommendation process. The newspaper and TV networks have used an army of college educated journalists and content creators to create and curate content. The sub-editor and the editors then shifted through all the curated content and used their judgement and knowledge about what their users “would-like” to decide on what stories “got-in” and what “got-left-out”. The editor and sub-editors made recommendations to users about the content that they should consume. The stories/content that got-left-out never saw the light of the day.
With online the whole process is going to go through massive transformation. Thousands of bloggers and social media users are consuming and curating content by either rating it, writing comments, forwarding it to friends and family, twittering about it or sharing it on facebook. The interaction of the user and his subsequent behaviour is data for machines. Now the machines can process all the information about the particular content and the interaction of users with that content and make sense out of it. The “making sense out of consumer behaviour data” then becomes the backbone for making recommendation to new users who would like to consume that content.
This off-course will have a dramatic impact on the Content creation industry, the cable industry and the advertising industry. Imagine a situation where an ad agency has access to real time data about a “piece of content” on basis of which they can put a bid on whether they would like to place their ad next to that “piece of content”. This will create massive efficiencies in the media buying process.
The impact on cable industry will be dramatic too. As more and more media gets recommended by the “crowd” the lower the stanglehold of cable on what consumers watch on their TV screen. Currently the programmed TV experience that broadcasters create does not create a competitive environment for content to compete for eye-balls. With more content surfacing and being discovered through “crowd-sourcing” there will be perfect competition amongst content creators for consumer eye-ball. The disruption of the broadcast, cable and advertising industry has just begun 🙂
I have been thinking a lot about how as more and more video content from across the world turn up Online the whole sub-titling issue will become very important. To understand this a little bit on language cinema. Today there are very robust film making industry outside of Hollywood for example China, India, France, Iran, Russia, Italy, Japan etc. 99.9% of the video content coming out of these countries are in local language. However the video sharing sites to which they are being up-loaded like Youtube, Dailymotion, Metacafe etc have a world-wide reach. The video content from these countries have an opportunity to find new audiences outside of their countries. This will happen once consumers can get sub-title on the fly as they are watching a video. On this issue i read a great post by Fred Wilson a part of which i quote below:
The larger point I am making here is that by open sourcing subtitles, we are making it easier to watch films and other forms of video that are made in other languages. People in Israel can watch TV shows and films made in the US in hebrew subtitles. People in the US can watch TV shows and films made in India in english subtitles. The possibilities go on and on. We don’t need to wait for the producers of the films to release them in foreign languages (if they ever choose to do so). We can simply get the footage we want to watch and find a subtitle for it on the Internet.avc.com, A VC, Oct 2009
If users can get subtitles on the fly while they are watching the Video content Online then it will open a whole new opportunity for U.S, European and Asian consumers to enjoy the fantastic movies and television serials that are being created by different cultures. I remember the time i had spent in South Asia doing an assignment and i really enjoyed some of the serials being produced in local languages. The social impact of something like this happening can be very far reaching. The power of images is far reaching and more unifying than text. Text or language act as barriers for rapid spread of language specific art and culture. Video or moving Images does not suffer from the same amount of barriers as text.