Friday, 1 November 2013

Is India Ready for New Media?

The Election Commission on 25 October brought the social media and Internet use for elections under its purview, issuing a detailed order for regulating them. It decreed that the legal provisions and orders issued by the Commission regarding the election campaigning shall equally apply to the social media alike any other media, so far as the candidates and political parties are concerned.
Pointing out that the social media websites are also electronic media by definition and hence the instructions for pre-certification of political advertisements on TV and other electronic media by the state and district media certification and monitoring committees will also apply to the social media websites. 

This gives some indication how fast is new media catching up with Indians. What is driving new media penetration in the country?
Internet Penetration : India’s population at the end of 2012 was 1.23 billion, up from 1.03 billion in 2010. Internet users in the same period increased from 69.2 million to 116.18 million, which is just 9.6% of the total population. This translates to only 7.2% household penetration, whereas the total number of households in 2012 was 268 million. However, the very size of the market makes it lucrative for internet based services including new media. Even the rural population is not left behind in adopting to internet usage. According to a iCube report, rural India will have 68 million claimed internet users and 46 million active users by the end of October 2013. The number of active internet users has seen 58% growth since June 2012. The report also finds that nearly 42% of the internet users prefer to access Internet only in Local languages. With more content becoming available in the local languages, more users will start using the internet, states the report.
Growing Smartphone Users :  India ranks fifth among the top countries for smartphone users with an estimated 67 million subscribers in 2013, behind China, the US, Japan and Brazil. But the penetration of smartphones as a percentage of mobile users in India is pegged at just 6 per cent, the lowest among the top 30 smartphone markets, according to the latest ‘2013 Internet trends’ report by Mary Meeker, partner at the venture capital firm Kleiner Perkins Caufield & Byers (KPCB). 
What is encouraging is Year-on-year growth of smartphone subscribers in India stands at 52 per cent, which is expected to be the second fastest after Taiwan at 60 per cent, among the top 30 smartphone markets in the world.
Cloud Adoption :  According to a Deloitte report cloud adoption in India would reach significant levels over the next 2-3 years, driven by increasing uptake across a broad base of large enterprises, SMB, as well as, individual (non-corporate) technology users. There has been a surge in adoption of the cloud as most of the SMB are using productivity software services from large vendors like Amazon, Google and Microsoft. These companies have also become early adopters of public cloud model as they are more cost conscious and less sensitive towards data security issues.
Digitisation of Cable TV : Recent initiative of the government in digitizing cable TV will have a great impact on moving towards new media. Already 28 million connections have been digitized and another 100 million will be digital in the next two to three years. With the advent of digitisation, the industry is expected to expand its reach using the digital platform to virtually every corner of the country. Content too will evolve as it focuses on localization and targeted advertising to cater to regional tastes and needs. As the networks stabilize MSOs will start introducing broadband on cable providing multiscreen services like OTT, HbbTV and TV everywhere. DTH is already prepared to provide these services with Dish TV and TataSky both giving TV Everywhere and streaming video services.
Smart TVs : Many international brands like Samsung, SONY, Panasonic have launched smart TVs in India that get cable/ DTH services as well as are connected to Internet. Thus the consumer gets connected to online media as well and may combine the two in achieving higher options like catch-up TV, video-on-demand, electronic program guide, interactive advertising, personalisation, games, social networking, and other multimedia applications. According to 6Wresearch, India Smart Television market was valued at $0.22 billion in 2011 and is expected to reach $10.41 billion by 2017, growing at an impressive CAGR of 87.02% during the period 2012-2017.
Mobile Broadband Services : Airtel and Reliance have already started rolling out 4G and LTE services that provide highspeed internet on mobile devices enabling consumers to use new media services effectively. The impact of 4G is likely to be significant on the Indian telecom market when most of the Broadband Wireless Access (BWA) license holders will roll out LTE services across the nation.
 Connectable Devices : Global Trends. The global market for connectable set-top boxes (STBs) is expected to surge by 91 per cent from 2012 through 2017, driven by a number of factors including the adoption of multimedia home gateways (MHGs). Worldwide shipments of connectable STBs are forecast to rise to 125.6 million units in 2017, up from 65.8 million in 2012, according to the latest Set-Top Box Market Monitor report from IHS. A total of 45 per cent of all STBs shipped in 2017 will be connectable, up from 26 per cent in 2012.
A connectable STB is a set-top box that can be linked to an IP network. Such boxes typically integrate an Ethernet port or Wi-Fi, allowing a connection to networks located within homes. All types of pay-TV operators — i.e. cable, satellite and IPTV providers — are distributing connectable STBs.
“Consumers increasingly are demanding connectivity from their electronics devices, and STBs are playing a central role in the networking of products,” said Daniel Simmons, senior principal STB analyst at IHS. “Connected STBs perform all kinds of useful functions, including distributing digital video recorder (DVR) streams to televisions in multiple rooms, as well as delivering video on demand (VoD) and web content to various platforms. Furthermore, MHGs and their associated thin clients, which also employ connectivity, are being used by pay-TV operators to provide advanced services and content to all kinds of IP-connectable devices, including mobile products like smartphones and media tablets.”
MHGs and thin clients for cable systems will represent a major growth driver for connectable STBs. These devices will account for 25 per cent of connectable box shipments between 2013 and 2017.
 An MHG is a converged STB/residential gateway device that directly processes video signals for all IP distribution and routing to multiple client devices within a home. A thin client is a partner device to an MHG that is used to interface between the IP-based, in-home video signals and a television. Thin clients do not contain broadcast tuners or hard disk drives.
In 2013, IPTV pay-TV operators will account for the largest share of the connectable STB market, with 39 per cent of shipments. However, the coming years will see a rapid increase in shipments of cable HD STBs by Chinese operators and MHG migration throughout the rest of the world. Because of this, cable will be the major driver of growth in connectable STB, with shipments rising at a rate of about 25.4 per cent a year to reach 45.8 million shipments in 2017.
 Large Young Population fuels fast changes in technology adoption : Every third person in an Indian city today is a youth. In about seven years, the median individual in India will be 29 years, very likely a city-dweller, making it the youngest country in the world. The population in the age-group of 15-34 increased from 353 million in 2001 to 430 million in 2011. Current predictions suggest a steady increase in the youth population to 464 million by 2021. This large young population is fast adopting to the use of connected devices and helping in the proliferation of new media in the country. 
The second segment making an increasing use of new media is the 'White collar' workers having internet access at work, some have access at home and a growing number have smart phones and tablet devices using Wi-Fi rather than 3G for connectivity. Connected Indians are rapid adopters of social media. Facebook has recently surpassed 50m users in India and is by far the largest of the social networks at present.
Revenue from Digital Media growing : In recent years notable changes have been witnessed in the field of communication and media. Many new concepts popped up and new media advertising is one of them. India is pretty new to new media advertising. However, going by the latest trend you will come to know that new media advertising is the emerging and hottest medium of advertisement.
Although the paid app market is small in India currently , the gaming and apps market — which is also drawing its share of growth from the frenetic use of smartphones — is expected to become Rs 2,000 crore worth by 2016, the report estimates.
The real surprise package though is the paid-content market.  MVAS was the only channel through which consumers paid for digital content . Now with smartphone adoption gathering pace, consumption of off-deck content is beginning to scale. Though still small currently, the paid app market from the iOS app store and Google Play in India crossed Rs 150 crore in 2012.
Earlier, the PC-internet segment saw monetization through three revenue models — advertising, paid content and commerce. All three models are beginning to witness meaningful traction on mobile, according to the Avendus report. Mobile advertising is beginning to grow at a fast pace and m-commerce is witnessing early signs of adoption.
The Indian mobile advertising market is estimated to reach Rs 2,800 crore by 2016 from a mere Rs 180 crore that it is worth today. What is significant is that India could currently have as much as 50% or more mobile-only internet users — possibly the highest worldwide compared to 20-25 % across developed countries — according to a report titled ‘India's Mobile Internet’ from Mumbai-based financial advisory firm Avendus Capital.
The Digital March-Media and Entertainment in South India, a Deloitte-FICCI report released on the eve of FICCI-MEBC 2013 in Bengaluru on 29 October says that in south India, new media, with an estimated size of Rs 690 crore in FY-2013 will grow at 23 per cent CAGR to reach Rs 1600 crore in size by FY-2017, followed by television which will grow at a CAGR of 20 per cent from a present estimated size of Rs 13,470 crore to Rs 27,960 crore. 
 Television continues to be the dominant segment; however, there was strong growth in new media sectors, animation/ VFX and a comeback in the films and music sectors on the back of strong content and the benefits of digitization. Radio is expected to see a spurt in growth at a CAGR of 16.6 percent over the perio 2012-2017, post th rollout of Phase 3 licensing.
Aggregators of online entertainment are also adding to the growth of New Media.
Zee New Media, the digital business of Zee Entertainment Enterprises, has launched Ditto TV, an online TV subscription service that offers live TV streams and video on demand content on mobile phones, tablets, PCs, entertainment boxes and connected TVs. 
Tata Sky has recently announced that it plans to launch “Everywhere TV”, a service with Live channels and Video-on-demand on Mobile. Earlier this month, Zee Group’s DTH business Dish TV announced DishMobile, in partnership with group company Ditto TV to offer Live TV, Movies, TV shows and videos.
Times Internet’s online video streaming service BoxTV, Multi Screen Media’s Sony LIV, and other services like and DigiVive are some other online entertainment content providers encouraging the use of New Media in India.
More than 75 million viewers went online to watch IPL this year against 49 million last year. T-Series is now among the top 100 channels globally on YouTube . So are and Eros. Google the largest video aggregator in the world is seeing its India revenues double year-on-year. 
As more than 227 million Indians tune in to listen to music, watch a film, a TV show or a cricket match on their mobiles, computers, tablets or other devices, the Internet is finally delivering some serious revenues. In 2012, of the Rs 27,000 crore that digital media made, more than 80 per cent came from entertainment products online. This is up from Rs 10,000 crore just three years ago. 
One can say that New Media has come of age in India and irrespective of low penetration of internet this form of media is growing the fastest. Confluence of three factors-the rise of devices and bandwidth, the boom in video content and the growth of aggregator brands –are making this possible. Whilst traditional media like Television and Print presently dominate the Indian Media & Entertainment Sector accounting for three-fourths of the sector size, as in Western economies it is digital media which is showing the most spectacular growth, although from a relatively low base in India.


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