A rapid device evolution is knocking at our doors and consumers are willingly welcoming the age of Internet and mobile downloads. The fact that the media and entertainment industry is going digital is an inevitable change and with film and television content being dished out to consumers through innovative formats, downloaded content is gaining tremendous popularity.
The entertainment industry has undergone tremendous changes from what it was between 30 and 40 years ago. Technological revolution resulted in new streams of revenue and the main concept was to aggregate a lot of people towards a particular content. Over the years, the home video market grew exponentially.
In Hollywood, the home video business pegged at $20 billion is now almost twice the size of the theatrical business that is about $9.5 billion. In India, with the advent of 2.5G technology and broadband connections, consumers are lapping up the benefits of technology aimed as potential media vehicles. Entertainment is now available at your fingertips.
So how exactly does the entertainment industry benefit from the business of downloads? As Neeraj Roy, managing director and chief executive officer, Hungama Mobile puts it, ?It is a seven-letter word called revenue. Firstly, placing content on the Internet surmounts to an eternal shelf life of the media property. Mobiles offer a variant since a lot of the content accessed through handsets are for ?snacking? and personalisation. Secondly, downloads help in marketing content and creating a consumer connect.?
He explains that the power of the digital medium lends affinity to cinema or television content and creates a greater inclination towards box office, ticket sales. The mobile market recorded a high growth rate in 2007, where there were close to 80 million subscribers.
The average revenue per user (ARPU) has fallen dramatically and with a global business of $29 billion, mobile downloads are catching the pulse of the audiences who are eager to personalise film content and this phenomenon is growing four-fold every quarter. The domestic market is equally busy as far as mobile or Internet is concerned.
Properties that are available for download via Internet, mobile phones, IPTV and DTH are broadly classified into four categories of music, imagery, videos and games.
Wallpapers, tones, themes animations, graphics, logos and even games based on films are made readily available for consumers at prices ranging anywhere between Rs 3 and Rs 99. However, ringtones and music are the two most important film-related content that are widely downloaded by consumers across all age groups.
In 2006-07, about 6,00,000 to 8,00,000 ringtones were downloaded daily in India contributing to a revenue of about Rs 180 crore in that fiscal year. The size of this market is growing by more than 50% annually and is expected to cross Rs 270 crore by March 2008. The mobile music industry is estimated to reach nearly Rs 600 crore this year and is growing at more than 25% annually.
Manoj Dawane, chief executive officer, People Infocom (MAUJ) feels, ?Mobile visibility allows a film to create a recall factor and build on the popularity quotient. It is a means of touching audiences on-the-go. Considering that the mobile phones today have phenomenal penetration rates, it becomes a perfect channel to reach across the length and breadth of geographies.?
Meanwhile, as far as the Internet is concerned, India has the fourth largest market in the world. There is a rapid growth in the global Internet traffic and downloads contribute a great deal to the stickiness of netizens. A three-million broadband connection base in the country available at a speed of 256 kbps sometimes restricts the kind of downloads that are made?97% of Internet downloads are either free or illegal. A major chunk of the revenues are lost due to piracy.
Siddharth Roy Kapoor, executive vice-president, marketing distribution and syndication, UTV Motion Pictures feels, ?With new innovations in technology, film content can be consumed through Internet, mobile, IPTV and DTH downloads that act as another revenue stream. Downloaded film and television content have a huge demand overseas, however, the size of legitimate download is really negligible because of rampant piracy.?
Production houses benefit a great deal from the business of downloads as they are crucial in tapping the overseas market where the demand for Indian film and television content is huge. Films like Dhoom 2, Don, Salaam-e-Ishq, Heyy Baby, Dus Kahaniyaan, Spiderman 3, Bewoulf and the Rajnikanth starrer Sivaji benefited from downloaded revenues. Character and theme-based games built around the concept of these films were hugely popular among audiences.
Says Rajjat Barjatya of Rajshri Productions, ?Internet downloads and streaming provide an additional and complimentary distribution platform for films. The power of the Internet lies in the fact that producers can reach out to the overseas consumers resulting in an additional revenue stream.? He adds, ?The revenue break up of the music industry has changed because of downloads. In 2006, non-physical formats of music sales were recorded higher than physical formats like cassettes and CDs and even though ringtones and caller tunes contribute to the bulk of revenues generated through downloads, the figures add up to a small percentage of a film?s revenues. However, we are optimistic that this medium has ample potential.?
A revolution of sorts is on the anvil then. According to Navin Shah, chief executive officer, P9 says, ?Mobile and Internet downloads are an aggressive marketing tool. It is quite effective and a viral tool as one can download content for themselves as well as for friends. It allows a film to engage in high-buzz marketing by word of mouth. In Hollywood, downloading is a serious revenue avenue and this trend is slowly emerging as an effective marketing tool in India as well. Downloads are mainly aimed at the age group of 15-24 years which constitutes about 60% of the movie goers in India.?
Industry experts believe that even with a substantial broadband and mobile penetration and a significant point of customer acquisition due to the drop in the handset costs, downloads are still a far cry from discovering their true potential. Value-added services account for as little as 8-9% of the revenues for mobile carriers.
Internet and mobiles have limited reach in India. It is a price sensitive market and is fairly undermined. The download business is expected to have about 700 million consumers by 2011 and most content providers feel that not even one-third of the market has been tapped. Transcoding content and porting it to compatible devices is a complex task and for the digital business to flourish enabling smart phones with adequate memory storage
is essential.
Both Roy and Dawane are optimistic that with increased audience participation, we will continue to see new trends in the next five years. Due to the introduction of 3G licences that will be rolled out later this year, in a movie crazy nation such as ours, a holy matrimony between technology and the entertainment industry will certainly pave the way for a bright future for the download business.
