Strategies for Indian broadcasters to leverage the emerging digital economy

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.