‘Legacy TV measurement system is not doing justice in capturing how people are consuming’
Star India’s premium streaming platform Hotstar has released India Watch Report 2019 today – a study of online video consumption behaviour and trends. Based on Hotstar’s pan-India consumer base, the third edition of the report presents revelatory insights on how evolving content preferences, progressive gender shifts, and increasing accessibility continue to shape the modern Indian digital consumer.
At the event, Star and Disney India chairman Uday Shankar did a fireside chat with television news personality Faye D’Souza. He shed light on various topics on Hotstar including the role of sports, regional and the potential of digital advertising.
Faye D’Souza: The India Watch Report 2019 has thrown up interesting numbers. One piece of data that I noticed that I found very interesting was that during the India Pakistan World Cup match Hotstar apparently witnessed 8000 downloads per minute. Do these numbers surprise you or was this a part of your plan when you started off?
Uday Shankar: No they don’t. Was it part of the plan when we were building Hotstar and planning to launch it? Absolutely not! The world was a very different place. Access to data was very different. The number of smartphones in the country was very different and the habit of consuming long-form content on devices was not there.
I will be the first one to admit that we were not prepared for this kind of astounding explosion that we see today. But now that we have seen how India has changed dramatically in the last four to five years these numbers don’t surprise me. If anything I keep pushing Varun and the Hotstar team. If India and Pakistan are playing then why is the number only 100 million? Why are there only 8000 downloads per minute? There should be 80,000 downloads a minute.
One of the debates, when OTT came in, was your freemium model of giving some of it away for free and charging for the rest of it. There are of course other competitors who have gone a different way. Rupert Murdoch had once said about news that the biggest mistake was giving it away for free and now nobody is ever going to pay. You took a bit of a gamble there and you believe that this has paid off. Could you tell us how the freemium model has worked out for Hotstar?
First and foremost, I do not understand these categories very well. There is no such thing as free. Someone is always paying. There is a direct payment model that you call subscription and then there is the indirect payment model where the advertiser pays if somebody watches because there is an alignment of interests. That said the model has worked very well. We were very clear in the beginning that we were trying to create a habit that did not exist. We did extensive research and one of the things that came out was that people believed that they were paying for online content too because they were paying for data. We felt at that stage that we were trying to induce people to watch content on their devices. At that time devices were not evolved. Wallets were not what they are today.
We decided to let people watch it and over a period of time people would convert to subscription. That’s not worked out. The larger issue is that there is a big paradigm shift and no offense to anyone but we get locked on to certain things. What is the monetisation model? What is the payment model? What is the subscription model? Who is buying? Who is selling? How much money are we spending? We miss out on the larger picture. We have a great team but from where I sit the big thing that is happening is that a tectonic shift is happening in this country. We should not miss out on that. Without any cricket, if 200 million people are coming to Hotstar and watching for whatever length of time in a month compare that to television where there are 800-900 television channels. The total reach for television is 700 million in a month. So the 200 million on Hotstar alone versus the 700 million on television tells you the shift that is happening. How comfortably, seamlessly and easily consumers in this country have taken to watching on mobile.
The second thing you know is that if such a large shift has happened in consumption to non-metros, small towns, very small towns, and even rural areas then that tells you that this is no longer an upscale, urban phenomenon. Women are watching in such a large number. These are the big shifts that are happening. We are happy to lead that shift. But by no means are we the only ones who are doing this. I think that Reliance Jio has done an amazing job of democratising access to data and content. That has been very helpful. The other big thing is that this whole mindset that we have is that there are big successful, global players and by right they will be big successful players in India as well. That is not happening. In television, that wisdom was defied for the longest time. There might be global owners but television development in India was local with local talent, local creativity, and local business models. The same phenomena is already replicating itself in digital.
The other thing that is happening here is that you have to design for India – the technology, the product, and the content. You can have global content and we have the rights to more Hollywood content than anybody else in this country between Fox, Disney, HBO, Showtime and others. But the driver of content consumption is local. That is going to stay and to think of doing an iconic show with an iconic Bollywood director is great. But that will not be the primary driver of content consumption.
That is not happening. It is the same mainstream drama, mainstream sports, mainstream news that will drive content consumption. Suddenly this whole imagination that we have developed under the barrage of marketing spiel from global players that the consumer would morph into a different beast just because global content is available is not true. Good quality global content will have a lot of traction like Disney films. ‘Avengers’ is as or more successful than most Indian films. Marquee content will travel but the bulk of content consumption will happen on the back of local initiatives and local creativity.
The report also very interestingly points out to regional content. ‘Bigg Boss Tamil’ was one of the most successful shows that you had on the platform. We do see a lot of Indian content being dubbed in various languages. Do you believe that regional content is one of the engines?
It is not just one of the wheels. I think that going forward it will be the driver. It is already happening that in regional languages the rate of content consumption growth is much higher. First of all English is much smaller than Indian languages. Hindi is also very big simply because of the size of that demographic. But regional between Tamil, Telugu, Malayalam, Bengali, Marathi is growing massively. All of that growth is being turbo charged by the regional content that we have. This is one of the big advantages that Hotstar has. We have a massive library of local content that we produce every day and every week and every year. We also have a library of content created over the years that we have been in existence in this country.
Cricket broadcast in India is obviously an expensive business. You have made tremendous investments in that space. Where do you see this going forward? What are your plans? I know that you have added Kabaddi and football but specifically with cricket what are your plans?
I hear a tone of but in your question but Kabaddi and Football is the future. Cricket is the present and it will remain the future. It is expensive but we have never shied away from taking expensive routes. It is easy for people to come here and say that they are spending Rs. 3000 crore on content. Well, welcome to the party! We write one cheque for one cricket tournament (IPL) every year which is more than that.
So it is an expensive business. But when you are trying to shape the industry and when you are trying to shift consumption habits then that is pretty much the way it is going to be. I go back to my point that it is going to be totally on local content consumption that media models in this country will have to grow and to that extent, it is somewhat different from North America and Europe. India is closer to China which is also about local content, local depth. Linguistic limitations exist here. Cricket will be the big powerhouse but we have deeply localised cricket. The number of languages in which we offer cricket has never been done before. Cricket is powerful but there was also this fear that cricket had plateaued in this country. We have taken it from this plateau and we have discovered the next growth mountain for cricket by going even deeper. So if children and people in small towns, rural areas, and women are all watching cricket it is because cricket is more accessible. That is the route that everybody will have to go through.
I want to come back to what you said that you do not like the label, the business models that everyone talks about. You like to go wherever the terrain is taking you. If we take a look at advertising right now you have live and non-live content. You have different revenue proposals that you are perhaps placing before advertisers. Is there a different offering to advertisers in this platform of content than there has been in the past?
I think that because the business has legacy verticals as much innovation has not happened. We are one of the few companies globally who sit in the position of having a big presence in television and having a big presence in digital through Hotstar. People watch content seamlessly when they are in front of the TV and when they are away from it. Models need to evolve dramatically in line with that too. One of the big initiatives we are doing is that we have started offering advertisers a combined solution that straddles across TV and digital. This move is not coming a day too soon. If viewers are transiting from one screen to the other then why should the advertiser not have the same flexibility? I think that this is going to be the path of the future. Those who are only present on TV will only offer TV solutions and those only in digital will only offer digital solutions.
They will be constrained by that limitation. But we sit in a position where technology allows us to move in that direction. However, one big limitation here is the measurement system. The legacy television measurement system is not doing justice in capturing how people are consuming. There is not enough data and where there is data there is the issue of credibility. In today’s day and time on Hotstar Varun and his team can tell you which village is watching how much. TV measurement is still sample-based and is extrapolated, interpolated I don’t know what all mutilated. We need to move on and create a currency that is scientific, robust, transparent and gives complete visibility to all stakeholders.
That was going to be my follow up question. The difference for an advertiser in approaching television and approaching digital is that you geo-target, target to the very last slice of demographic. Is that a focus for Hotstar where I can as an advertiser speak to women in Bihar between certain ages at this time?
Technology exists. We have the capability that exists. We have to be extremely mindful of all the legal requirements and concerns around privacy. Within that, all kinds of targeting are being done. All kinds of segmentation can be done.
And you believe that sort of transparency of advertising will be preferred to television?
I don’t that it will overtake television. It is a false binary we have created between television and digital. As we go along it will come closer and there are those who offer a solution for both either because they are present in both TV and digital or through commercial arrangements. Today advertisers buy for both television and digital. It is just because they are often not available together and organisations are not designed like that they go to two different people, two different teams etc. I think that as we go along this will change.
You also said that you believe that the small screen is currently the preferred screen for most Indians. It has been at the centre of your innovation, your strategy. You have not been distracted for instance with also putting it on the big screen, also making it available on television also being available on multiple devices. Could you tell us why you believe the small screen is the preferred screen?
I personally don’t see this as a small screen, big screen issue. There is no standard size of television screen either. There are 14-inch television screens and there are 84 inch television screens. We did not make that distinction when we were making content for television all these decades. So why should we do this now? It is just that the screens are becoming smaller. Also, connected TVs are taking content back to the big screen. So the screen size is totally irrelevant. It is about making sure that you are available to the consumer through the most convenient, hassle-free option whenever, wherever he/she wants it.
What is Hotstar planning for the next year or so?
Two to three things. First of all, it is a tech medium. The difference between digital and television, print, and radio is that here the technology, product is as much a part of the offering on a daily basis as the content itself is. You keep innovating. There is a dynamic level of interaction between content and technology. That is a continuous process. Beyond that, I think that there are two things. One is that at the core of our success at Star India over the past two decades has been the fact that we understand the people in this country and the pulse of this country better than most other companies and media organisations.
We have leveraged that understanding to create content that mirrors people’s aspirations and their sentiments. That process will get sharper and sharper. Luckily with digital, you have a better ability to target content or segment the audience. We will keep doing that. The second thing that you will see is this whole solution to advertisers and stakeholders will become a lot more seamless. So people will not have to shop for various products in different shops. A lot of options will be available. The third thing from a consumer point of view that you will see a lot of is the whole thing of social, gamification of content and interactivity. It is a false notion that we created that television audiences just want to sit with their hands folded and watch the content.
The same people when they go to a sports event or to watch a movie clap, hoot etc. We want to give the same level of interactivity to people when they watch content on a screen. Content consumption is a social initiative. You want to share the content consumption experience regardless of how far apart you might be in distance. So we will be focused on offering that more and more evolved package of connectivity with content where you can interact, communicate and share. That is going to be a very big part of our plan.
We do see a lot of product placement happening inside of content now on platforms like Instagram where the creators are pushing products. Is this a model that you would be looking at as well where your content creators do have a very large following, large numbers of people talking in?
I don’t know. We haven’t talked about it. We haven’t discussed this at Hotstar yet. So I can’t answer this. But personally I can tell you and this is my personal position I don’t like to taint the experience with crass commercialisation. There are better ways of making money. We are in the business of making money. You have to make money or else the whole thing will fall apart. So we have to be active and dynamic in terms of monetisation. But you don’t want to sully the experience so to speak. I would be very careful. We have stayed away from doing this at Star as a company.
Why is this report important at this point of time? Why did you feel the need to look at the numbers?
To go back to the point that I made at the beginning on a daily basis we as practitioners are so focused on our daily deliverables and on our daily objectives that we don’t have a chance, space and time to step back and look at the larger picture. A tectonic, paradigm shift is taking place. We tend to miss out on that. The idea behind a report like this that has full visibility to only Hotstar specific data is to talk about what is changing in this country. We believe that there will be a billion screens in this country over the next four to five years. Out of that, a quarter billion will be TV and three quarters will be digital. It would be a fatal error to see them differently. They are coming closer every day and are overlapping in the consumers’ hands. To survive in business we must see them as overlapping.
We went live with Hotstar in January 2015 with the World Cup. At that time nobody would have imagined how things would change. I know that friends, well-wishers and partners told us that we were wasting money because nobody was going to watch it. All kinds of homegrown theories were advanced. The screen is too small, your hands will hurt. Some of that seemed sincere and some sounded ridiculous. But today everybody is looking at digital and they are watching it for hours. It is a massive shift. It is a generational shift but it does not happen in every generation. It only happens once in several generations. Today between the economic changes taking place in this country and the technology and data etc and the creativity that we bring in it is one of those once in a lifetime changes that is happening. It is exciting.