Star building cross screen ad engine to improve rev share: Uday Shankar
MUMBAI: The Walt Disney Asia Pacific president and Star/Disney India chairman & CEO Uday Shankar recently made a presentation on the health of India business and the local media market at Disney’s Investor Day.
During his presentation, Shankar claimed that Star India captures 30% share of TV and digital video advertising each. It also takes 40% of the local TV affiliate or subscription revenue. He also revealed that the company is looking to maximise its ad revenue by building a cross screen advertising engine.
“Today, Star captures 30% of all TV advertising and almost 30% of all digital video advertising as well. It also takes 40% of all TV affiliate revenue. Our goal is to improve these shares further with a cross screen advertising engine,” Shankar told the delegates during the investor’s day summit on 11th April.
Talking about the Star India business, Shankar stated that for every four hours of content consumed in India on TV as much as 1 hour consumer on Star network channels. He also said that Star has 65% share of sports viewership in India.
“In the last two decades, Star has developed a capacity to develop market leading entertainment and sports content in eight languages. For every four hours of TV watched in India, 1 hour is on Star. Star broadcasts 250 days of live sports every year and has a 65% share of sports viewership in India,” he said.
Hotstar, he noted, has just broken the 300 million monthly active users mark. He further added that Hotstar is one of the largest video platforms of the world.
“We achieved this by staying ahead of the curve. When everyone was dismissive that India is a data dark market we anticipated the impending shifts and built Hotstar. We kept mobile and particularly Android at the centre of our strategy and created an app that was high-quality and feature rich but at the same time was light and nimble,” Shankar said highlighting Hotstar’s strategy during the launch phase.
He also stated that Star had put all its content on Hotstar almost simultaneously with its linear airing. Given the large Indian population, Hotstar was built for scale and focussed on creating a scale advertising platform too rather than focussing only on nascent subscription market.
“Today, Hotstar comprises 40% of all long-form digital content consumed in India. Star has always focussed on creating IP. Today that rich library is serving us very well. Hotstar is home to 100,000 hours of drama, movies, sports and news content on a single platform,” he averred.
He also highlighted the company’s strategy to localise sports by launching regional sports channels in Bengali, Kannada, Hindi, Tamil, and Telugu. Cricket, he noted, has always been an obsession in India but for decades its reach was limited because it was served largely in English.
“We took cricket deeper and made it more accessible in Indian languages. The success of our strategy is reflected in the improved performance of IPL last season. The IPL in one year on Star has seen 50% growth in revenue and 30% growth in viewership. Localisation and creativity have also led us to develop a uniquely Indian sport like Kabaddi which has already become the number 2 sport in India,” he noted.
Talking about the engagement strategy of Hotstar, Shankar said that the video streaming platform is the most advanced in engagement initiatives than any other service in India. “These include gamification of content, a social experience around video and even allowing in-app transactions now. As a result, an active viewer spends 2.7 times more time on video as compared to a passive viewer.”
He also feels that the Indian digital video market has reached enough scale to build a subscription model. This paved the way for the launch of Hotstar VIP service which offers all content at Rs 365 a year.
“We believe that now that the Indian market is ready for a subscription push and that is why we are using Hotstar’s strength as a massive AVoD platform to establish compelling SVoD service for the top-end of our consumers. This is driven by premium content and easy transaction experience,” Shankar stated.
He started his presentation by giving a snapshot of the Indian economy. He noted that the India’s GDP is growing at 8% CAGR and the trend is projected to continue. The country is expected to be third largest economy. The economic growth will be driven by favourable demographics with 600 million youth population at the centre of it.
The youth, he stated, are open to modern consumption including digital media consumption. Meanwhile, there has been a growth in consumption power with the number of households earning $8000 a year growing at 10% annually.
“This segment will constitute almost half of the population by 2028. If you look at the spending power parity, the discretionary spending power capacity is going to be extremely attractive and the media industry will be the key beneficiary. India has the largest number of rapidly growing middle class,” he stated.
Shankar then turned to the digital media market stating that there is every indication that mobile is set to be the primary screen for the largest segment of the Indian population.
“For those who are affluent are opting for mobile as their personal screen and the not so affluent are having their first screen experience on mobile phones. The trend will continue to get stronger. India is set to have more internet users than the entire population in the G7 countries put together. By 2023, India will have over a billion video screens,” he asserted.
He also mentioned that the crash in data prices has been a major contributor to the growth in digital video consumption. Data consumption, he noted, has shot up 12 times on account of video streaming.
“An average Indian spends 2.5 hours on video every day. In the next five years, this is set to double to 5 hours a day. Smartphones are going to drive that surge. That is why India has emerged as a thriving market for advertising as well as consumer payments,” he said.
Shankar also pointed out that the ad spends on TV and digital together is projected to grow at 21% to $14 billion in the next five years. The video subscription market is expected to be $12 billion in next five years thanks to the hunger for content. All this has made India a magnet for all global media and content companies, he noted.
“Our business Star India has played a key role in shaping this market so far. Driven by our strength in content and our uniquely successful digital delivery platform Hotstar, we have a pole position in this incredible market,” he added.