21 Sep 2017
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Traditional media companies have to learn from OTT companies like Netflix

MUMBAI:Digital is an opportunity and not a threat for traditional media companies. However, it will soon become a threat if the industry does not move quickly, said Tata Sky chief content, business development officer Paulo Matteo Agostinelli.

The right approach is to create value for consumers by selecting the right content and packaging, and delivering it in an appropriate way.

“The traditional media companies have to wake up, move, and learn from OTT companies like Netflix. They need to offer content in a 360-degree environment,” said Agostinelli.

In America, which is the most advanced video market in the world, the ‘millennials’ or 18–35-year-olds now consume 50 per cent of their video time on a non-linear basis; a third of their video time is spent on a device. “In India there are 350 million millennials,” he averred, referring to the tremendous opportunity in the digital entertainment space.

He also pointed out that Tata Sky could be seen as a tool for filmmakers and content creators wanting to go digital. “You can talk to 10 million homes through us. We can innovate, experiment, and try different things”. He would love to do something similar in India or even have the film released by the producer on Tata Sky and bypass the theatrical circuit.

Agostinelli was speaking at a session on ‘Digital disruption: Trends, analysis, insights and projections’. Moderated by Filmkaravan founder Pooja Kohli on the conluding day of the media trade event FICCI Frames 2015, the session looked at disruption effected by the digital ecosystem on the entertainment sector. The panellists analysed future and current trends in the digital business for these platforms.

Actor, producer Abhay Deol shared his experience in releasing the film ‘One by Two’ to international audiences. He wasn’t getting distribution abroad, and conversations with the NRI community convinced him that they were willing to pay for watching the movie online. He saw that as an opportunity. “Here was a chance. I didn’t have to stress my studio out into a theatrical release anywhere outside India. I could just provide them with that content on my platform.”

He said that changing technology is a godsend; it enables producers to create content that does not fit ‘the formula’.

Deol said that millenials want formulaic films to be broken. When asked why he isn’t releasing more films like ‘One by Two’, he said that this is a business model and not a creative one. “Satellite does not buy ‘A’ certified films. Digital though will allow you to get funded. It would be great if the big stars also did this. NRIs want to see non-traditional films as well.”

Walla co-founder/managing partner Erik St Anthony Pence, who has been working with film producers and filmmakers to help them monetise new media technologies, also worked with Deol on his film. “We have to be aware that new technologies are being developed and how we monetise these opportunities. We build tools for film producers and filmmakers. We did a day and date release for ‘One by Two’ on Facebook globally apart from India where it was geo blocked. The results were great,” Pence revealed.

Asked if one should keep the window system in the digital world, Agostinelli said that windowing is not bad and that it depends on how one does it. He said that piracy happens not because people are thieves but because they are passionate about content and want to consume it as soon as possible.

Pence’s advice to filmmakers is that rather than focusing only on the main feature, they should look at digital as a complete marketing ecosystem, and bring in the franchise idea behind it, because digital has made that possible.

“One needs to think of digital as a marketing ecosystem.” According to him, filmmakers and content creators looking to work in the digital world should try anything and everything and learn and understand the results. He also admitted that finding the right price point is a struggle with transactional VoD.

LA digital media advisor James Veraldi felt that the challenges in the US are different from those in India. “There are different reasons why some have sputtered and some have taken off.”

In his view, there is an assumption that people are looking at new forms of content. However, the fact is that they still love well-produced movies and TV shows. “Great content is great content. Bad content is bad content. The difference is in how the content gets delivered and monetised.”

Yet, he does not believe in the death of cable and satellite television, only in their evolution with changing consumer demands. “Traditional production companies are not a dying breed. What’s changed is marrying digital stars with traditional writers and filmmakers and not relying on traditional distribution to get it monetised.”

Talking about viewing patterns, he noted that most people are lazy and habitual. “They want to be told what to watch. They want recommendations. People today don’t want a subscription service where the content is delivered to just one place. The cable and satellite business can change and deliver content on different platforms. They can compete with new media service providers.”

At the same time, he was shocked that in India television show producers surrender all rights to content to broadcasters. The broadcasters according to him might not be able maximise all the ancillary rights that come with it. He gave the example of Lionsgate in the US. While Lionsgate sells its shows to broadcasters, it retains some rights to exploit.

His contention is that if Indian television companies are not able to exploit all the content rights then producers should ask to be able to retain some rights. “The system has to be changed if the ancillary rights are not being monetised.”

Another issue is if premium or free is important in digital. Veraldi noted that the payment structure on the mobile is not there. “Hotstar did the right by being free. In a few years, Hotstar can have a premium layer. Traditional media companies have a role to play in a disruptive new media environment. Star marketed Hotstar in way that start-ups would not have been able to do.”

Agostinelli noted that one has to be careful about what is free and what content is reserved for pay. But the fact is that the traditional media companies are sitting on an opportunity.

Pence noted that Netflix was saved because it created content that worked. He added that eventually Hotstar needs to have a pay model for long-term sustainability. Veraldi noted that creating online content is not easy. Netflix made shows for four years before ‘House of Cards’ came along. Amazon made content for five years before the success of ‘Transparent’.

Veraldi also touched on the fact that VoD is not as big a threat for theatre owners as they fear. “People want to get out of their home for an experience and popcorn. In America, theatres are investing in the experience like better seats. ‘Margin Call’ made $10 million in theatres and another $10 million on VoD after being simultaneously released on both platforms.”