In a packed room on day two of FICCI Frames 2013, Neeraj Roy, CEO, Hungama Digital Media Enterprises, asked the most pertinent question facing digital media right now: 'Where is the money?'.
Going on to highlight the digital landscape in India, which has over 5 to 6 million people being added every month, he touched upon convergence, increasing consumption of digital content, and the mobile ecosystem moving from pure voice to data-driven.
Agreeing with him, Devraj Sanyal, MD, Universal Music, pointed to the two kinds of consumers. The ones who are paying, he said, were few in number but growing. And, second, the ones who want everything for free. Making clear his dislike for the word 'free', he said, "A million paid consumers are better than 500 million non-paying ones."
Manish Agarwal, CEO, Reliance Entertainment - Digital, said, "We are at a cusp where digital is providing all forms of entertainment, but as business how do we make money? And it’s not easy. With the existing regulatory framework and the kind of consumers, the question is, how do we have a scalable and profitable business? Having said that, we can shape the industry if we understand and stand united on how content is consumed."
Sharing insights from international markets, Ralph Simon, founder and chairman emeritus, Mobile Entertainment Forum - Americas, said, "Multi-screen interaction is a reality and almost everyone is a 'screenager' - one who consumes content on multiple screens simultaneously. We are looking at a medium that is changing rapidly. We have instances where brands are engaging with consumers at the most unlikely places in the most unlikely fashion to understand them better. We are also seeing a lot of changes in the ways people are transacting. Like for instance, in Kenya, where mobile payments are done by trading talktime minutes instead of money."
Boaz Ben Yaacov, CTO and co-founder, Catch Media Inc. questioned whether advertising-funded delivery models are sustainable in the long run.
Noting that companies should look at alternate revenue streams given that the industry has spoiled consumers by giving them content for free, he said, "Visa's credit card system is making billions of dollars for the company with micro-payments being charged for convenience. That is a sustainable model which is not advertising-funded but built on convenience and experience. And, consumers don't have an issue paying for that. That, I think, is a sustainable model for content owners and technology platforms."
Siddhartha Roy, COO - consumer business and allied services, Hungama Digital Media Entertainment, agreed with the observation and added that consumers are ready to pay for value, which is defined as experience for the right price.
While Sanyal agreed that revenues were coming in through advertising-funded models like YouTube, he noted that these platforms lack clarity and transparency of monetisation. "To me, as a content owner, though I want to be there as a marketing exercise, I will probably not be there for the revenue. We need to use technology for giving great experience and consumers will flock," he added. Sanyal clarified that he doesn't necessarily want the consumers to pay directly to consume content. He said, "Brands are another source of revenue for us, and I have no issues if they pay for consumer's content."
Agarwal voiced the view that there was a segment of users for every kind of service. "My belief is that we shouldn't lose sleep over 98 per cent of the non-paying audience. Instead, focus on how to provide good service to the remaining 2 per cent which itself is a sizeable number. Moreover, I strongly believe that content is only the enabler. Packaging is the game changer for digital medium," he surmised.