Campaign India caught up with Manish Agarwal, chief executive officer, Reliance Entertainment Digital, to find out what is happening in the mobile gaming industry in India, Bigflix and Zapak Digital Entertainment.
What is happening at Reliance Entertainment Digital currently?
We streamlined our business in 2011, moved away from physical businesses, as we felt the need to move to digital where we could hope to see a path to profitability and create a sustainable and profitable growth model. Thus, we decided to focus on three areas: gaming on mobile (Zapak) ; movies on demand services (Bigflix); and evangelise the advertisers on innovations happening on consumer engagement on internet connected devices. We want to reach out to advertisers, inform them about new developments, and collaborate with them. For which, we are concentrating on a simple theory: Mobile first.
This is because, we know that internet usage in India and globally is going to grow more through hand held devices (mobile and tablets) than usage through the PC. This can be attributed to the fact capability of devices is improving, and for the consumers the price points are dropping. In India though the speed is improving, we have moved to 3G but we do not have 4G yet. Until that happens, in the interim period we are concentrating on global markets where infrastructure and consumer behaviour is already in place. This in turn will help gear us to serve better in India later as and when wireless broadband develops.
What is Zapak’s market share in India?
In India, we are the second largest mobile gaming player after Indiagames. It is difficult to calculate market share but I can say that we have a 40 per cent content share, which is primarily gaming. We have our own IPs, aggregated IPs, and licensed ones. m.zapak.com is the largest free-to-play gaming destination in India and has roughly three million unique visitors per month.
Our strategy at Zapak mobile for India is to create local IPs that will connect with our Indian audiences. For eg, we have licensed from Turner to make Chota Bheem games. We create games related to cartoons and Bollywood so that the affinity to download is higher.
What is the scene for mobile gaming in India?
In India, gaming is at a nascent stage. Things are moving in the right direction but speed is an issue and things like free wi-fi hot spots are not available. But most importantly, Indians are not gamers. Advertisers do not have conviction in gaming as a medium as our generation never had smartphones to play games. The set of advertisers in the next eight to 10 years are going to be pro gamers as today, kids in the age group of three to 16 years are completely hooked to smart devices. Therefore, this will change over a period.
What are the challenges in India for the gaming business?
Consumers in India are not used to paying for games; they are used to free games or many a time they are not aware that they have paid for games they have downloaded. Poor internet speed and a mindset that is oriented towards free content make it a very difficult proposition to achieve 50 million or 100 million downloads. Therefore, for advertisers and us to invest $ 2,00,000 for a game is not feasible and this affects the quality of the game. It is a chicken and egg situation. Therefore, the games created for India are not the same as the ones created for the global markets but they are definitely better than the other locally produced content.
How do you plan to generate revenues from advertisers?
The challenge is that advertisers understand that mobile is the future but are sceptical to invest, as they are sceptical of the returns and the measurement. Normally, brands in India opt for gaming only when they want to experiment, and hence have low budgets which hamper the quality of the gaming. It is primary that advertisers have a clear strategy with the core being mobile gaming. Kids and males are the primary gamers for mobile gaming. Brands need to understand this, invest, and develop gaming accordingly. The unfortunate part is that for advertisers, TV comes first in the hierarchy, then outdoors and social media follows. If they spend substantial amounts on creating a good game, they would have far better returns than the money spent on making a TVC, which they are not sure that people are going to connect with. Thus in India, we have to evangelise the advertisers and this is what we are investing in. Many brands will reap what we have sown.
Could you speak of the movie gaming segment in India vis a vis international markets?
All our global properties are movie IP-based. In North America, we tie up with studios (Fox, Sony etc) to develop games, as they understand that gaming is not just a marketing gimmick and a serious revenue driver. We work with the director while the movie is being filmed. This gives us more time and better insights to create a superior product. Total Recall, Mirror Mirror, Real Steel are some of the movies we have worked on.
Unfortunately, in India, the quantum of money to be made from gaming is very small for a movie producer. He looks at satellite rights, theatrical release, sale of music rights and other avenues. We normally approach studios but their bandwidth is restricted - which is why the quality of games that comes out is low. You need two to three months for creating a good game, but the time allocated is very less. Further, the producers expect us to pay phenomenal amounts for developing the games, which is impossible. Therefore, movie gaming has not taken off well in India. Even though Talaash was a Reliance movie, we did not develop a game. That is sad, because being a thriller we could have done a great job. Producers should realise that the game cannot die as easily as the movie. They can always revive the franchise through the game; it offers a ready vehicle for sequels.
What is happening at Bigflix?
We have entered into a partnership with Dish TV in US where Dish subscribers will get Bigflix as an additional channel, one to which they can subscribe. Likewise, we are looking out for local partners in other countries with local knowledge to help us reach out to the Indian diaspora who will be interested in watching these movies. We are yet to tap markets like Canada, UK, Malaysia and Singapore.
The revenue model for Bigflix is completely subscription driven. We have a mechanism of try and buy where we offer consumers ten minutes free of the movie as we have seen consumers not convinced about what they are buying. All our advertising to promote Bigflix is conducted in India and hence 80 per cent of our traffic is coming through India. We have not incurred any marketing spends to promote this outside India.
How significant is global business for Reliance Digital Entertainment?
Our revenues are more from the international business as compared to India. Our biggest market is North America followed by UK, Korea, and China. For the external markets, we are going to create the ‘Reliance Games’ brand as people are more aware of Reliance as a brand than Zapak. The future operations globally would be under the brand name of Reliance Games. In India, it will continue to be Zapak Mobile.