There is this young man who works for the apartment block I live in as its security guard. Like most security guards in Mumbai, he has a uniform and lives mostly in the small cabin housing the water pump, using the toilet built for the help who work in the 32 flats in the building. It is not as bad as many might think; it is much more than what people like this young man get in Mumbai with its sprawling slums and forgotten poverty. Most late evenings when I return home from work, he is seated on his plastic chair, holding fort, listening to old Hindi songs on All India Radio’s local channel via his mobile. Like many users that comprise the supposed 850 million mobile phone users in India, this man buys talk time at Rs 50, a onetime charge per week – he uses it to call the building manager, the water tank which delivers water to the building when the Municipal water fails and to call back home in Nepal once a week. He gets Rs 30 as reimbursement from the building management. I asked him if he uses value added services (VAS) like music downloads, ringtones, or videos. He explained that at one time he would do it, but now does not because it drains the Rs 50 within 3 days instead of the week that it is supposed to last.
Most of the Indian mobile phone user falls into this category of people who are users of the service but cannot afford more than the basic voice call service. Sure there are students and a large body of population that is on prepaid and can afford VAS, am sure the ratio between this population and the one like my security guard is overwhelmingly in favour of those who do not use VAS because they don’t want to spend precious rupees on entertainment.
These are the people who despite their limitation buy soap, shampoo, oil, and aspire to buy clothes from a proper shop. This is the population that is catered to by the kirana corner shops in all urban and rural India. These are the very same people who are targeted by outreach programs run by global MNCs like Unilever, P&G, Airtel, Reliance and so many more. It is a huge and potentially the fastest growing market in the world.
I wonder why this market is not targeted by the broadcasters in India. It is a very identifiable media that goes beyond the TV screen and extends itself by making the media free to use or in media parlance – ad funded. Am sure the millions mobile phone users would be happy to consume this content, like they do on TV, without needing to pay any money or very little money (market intelligence says that most cable operators charge around Rs 50 – Rs 100 for unlimited channels, this leakage is one of the reasons that broadcasters continuously look at owning distribution, and to my knowledge they – the broadcasters are losing the game.) Am sure that every advertising brand catering to this mass would get wet dreams on the possibilities that exist here. The big question is, why is no one doing this yet?
The answer lies in the non-existent ecosystem: TelCos see no value in ad funded VAS – they cannot make money selling the services at exorbitant revenue shares and prices. The media buyers have no way to measure effectiveness of their ads on this free model and so it remains a largely ignored area while they keep selling really expensive TV and print campaigns. The advertisers do not want to experiment beyond the safe cookie cutter plans which have been recycled for the last 15 years. And finally the old excuse that high end phones are simply not there in enough markets numbers. My counter is that even if 5% of the existing mobile phone users are using phones capable of supporting some form of entertainment, the numbers are larger than the audiences of most TV channels in the country.
Lets tackle the last issue first, lack of phones capable of playing entertainment defined as music and videos: we must be kidding ourselves, any self respecting cell phone owner, however low end his phone is has the ability to play music on this phone, and a sizable (my guesstimate is 70%) have a way to watch video! These phones are not manufactured by the big names but by the numerous brands that have come up in the last few years. If one works closely with all these cell phone handset brands, it would be easy to pre burn apps that are easily accessible, just give them a part of the revenue ( a small part nevertheless) for the platform they provide for the service. The second issue is that of lack of connectivity to the internet which is easily addressable by focusing on voice driven entertainment. The same user will progress naturally to the next level of getting GPRS services active if the Telcos reduce or do away with the access charges by subsiding it with the ad revenue that they would earn. Which brings us to the cost of content – an initiative can be only by a large broadcaster or a content owner who has the depth to wait for a couple of years to get the mass audience required making business sense. What I am proposing cannot be done by a startup that is normally pushed against the wall to prove business models and bring in revenue from month 6 into the business.
My suggestion is that a broadcaster should look at the latent potential of the huge audience, work with the media buying fraternity to build business cases and business models across voice and video on mobile phones, coordinating with TelCos and manufacturers to build a strong ecosystem that’s self sustaining in 18 – 24 months of operations.
The market in India is no doubt maturing at a blistering pace; the new frontiers are Africa and South America which are slowly becoming hotspots for mobile operators and television broadcasters. Over the next 5 years I expect that by allowing consumers to access their entertainment on their mobiles without making them pay for it will earn more money than business models that truncate the consumer base, simply because your consumer who is likely to buy essentials for his day to day life has very little money for entertainment. If you don’t give it to him, he will find a way to get it without paying for it.
Having said all of the above, there is a large market even then for a paid service that is ad free for people like me, who do not mind spending for content that they want and can choose.
Both models are sound. If you still want to hit me with a brick please comment here on the blog or follow me on twitter @spuriousmallu
No comments:
Post a Comment