Press Release

Consumer choices to shape monetization models in digital media

30 March 2015

Experts say consumers can expect to see a combination of subscription and advertising-based revenues as primary model.

The Indian market will have to develop its own unique model given the rapid pace at which the digital landscape is changing. Photo: Mint
Even as online video consumption continues to gain popularity in India, monetization models in the digital media sector will be shaped by consumer preferences and insights, including time spent by users, payment gateways and the nature of online content.
The Indian market will have to develop its own unique model given the rapid pace at which the digital landscape is changing.
According to the just-released report on the media and entertainment industry by industry lobby group Federation of Indian Chambers of Commerce and Industry (Ficci) and consulting firm KPMG, the digital advertising industry grew from Rs.3,010 crore in 2013 to Rs.4,350 crore in 2014, an increase of 44.5%. This has been driven by steady growth in ad spending across digital platforms.
“The bottomline is that Indians are willing to pay for content that they want to consume,” said Ajit Mohan, head, digital, Star India.
From a consumer’s point of view, the OTT (over the top)— these services work for the convergence of telecom and broadcast sector—space in India has been largely underserved. However, India will shape its own unique revenue model as the market grows, according to Mohan.
Star India recently launched its digital platform Hotstar in February and has crossed 10 million downloads since.?
The future of digital entertainment is in the hands of the viewer, who will be firmly in control, according to William Pfeiffer, chief executive officer, Dragongate, a Hong Kong-based entertainment company.
While the monthly active video consumption in India has been growing at a compounded annual growth rate of 43%, paid video consumption is expected to move at a much faster rate, at 57%, he said. “This equals a huge ad sales opportunity.” He added that new technology and virtual reality, along with a focus on regional languages will shape the future of digital consumption.
At the ongoing Ficci Frames media and entertainment conference in Mumbai, experts debated issues concerning bandwidth limitations, high data charges, the changing nature of online content, as well as pricing and payment issues.
They were of the view that while consumers can expect to see a combination of subscription and advertising-based revenues as a primary model, there could also be a focus on partnerships between telcos and content providers.
With 93% of Internet usage in India taking place on mobile devices, the need is to look for revenue models that would support Internet on the mobile, said Srinivasan Gopalan, director and chief executive officer, global voice and data business, Bharti Airtel Ltd. “The confluence of operators and content providers and an enabling ecosystem is needed for digital platforms to create successful revenue models,” he said.
Lastly, the Digital India initiative by the government could help propel the ecosystem further, said Kenny Ye, managing director, UCWeb India, a Chinese mobile Internet company with a presence in India.
“The campaign would enable the digital platform to reach wider audiences,” Ye said. “Internet through mobile technology will help connect people and the relationship between the service provider and consumers will be central to this economics.”Source: 
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