Impact of 3G on Business Model of Media Houses In India

NITIN GOEL, NETWORK18

WHAT IS 3G?

3G stands for third generation of wireless communication technology. It refers to the pending improvements in the wireless data & Voice Communication through any of the variety of proposed standards.The Immediate goal is to raise transmission speed from 9.5K to 2MBPS

BENEFITS OF 3G?

USER BENEFITS •Improved Infrastructure on the mobile platform I.e. faster transmission speed • Users will be able to access multimedia content on their mobiles anytime anywhere! • Live streaming of Channels • Streaming of Videos • Streaming of Music • Access big E-Mails • Video Conferencing on Mobile • Location Navigation • On Demand content • Uploading of content • Access bank Accounts • Conduct E-Commerce Transactions

MEDIA HOUSE BENEFITS • Additional Distribution channel • Mobile Subscribers: 300 million • GPRS USERS: 30 Million • Additional revenue stream • Strategic Differentiator

OPERATOR BENEFITS • Additional feature on Mobile for users • Beyond basic telephony services • Probable Differentiator • Additional Revenue Stream • Way to overcome declining ARPU

CURRENT MODEL OF MEDIA HOUSES?

CORE AREAS
Traditional focus area of media companies 1 CONTENT GENERATION 2 Traditionally Communication Dept. MARKETING

Traditionally Free to Air Or through C&S 3 DISTRIBUTION 4 CURRENT BUSINESS MODEL

Traditionally B2B Sales ADVERTISING SALES

•Generation of content by the editors/programmers • Reaching attractive TG with this content through Broadcast • Generating revenue by Selling content and/or Advertising •Generating revenue through subscription The challenge for the traditional media is the emergence of new technologies, that have the potential of offering services as per the needs of the specific customer. Be it DTH, IPTV, Internet & 3G all have the capability of offering services on users’ demand. Hence question arises how long the Broadcast medium sustainable & since when the Old Advertising Sales model sustainable? Have a look(do we get some clues, here??)

WHAT MEDIA HOUSES NEED TO DO?

DEVELOP THE CONTENT DELIVERY PROCESS INTO THE KEY STRATEGIC DIFFERENTIATOR

• In future it will be difficult to build sustainable competitive advantage just based on superior content • Digitization will offer many new opportunities for customer interaction • This means, differentiation will come not only from the content but also the way its delivered. • Beyond Functional benefits to Process & Relationship benefits

FUNCTIONAL BENEFITS

• product/service attribute • Value for Money •Quality

• Ease of Access • Broad Product Selection • Simplified decision making • Convenient Transactions PROCESS BENEFITS RELATIONSHIP BENEFITS • Service • Emotional Relevance • Loyalty rewards • Relevant mutual information exchange • Word of Mouth

EMERGENCE OF MOBILE AS A CONTENT DELIVERY PLATFORM?

Boston Analytics

•Vas industry expected to grow to 11K crores BY 2010 • VAS industry is growing fastest, & Mobile internet as a medium is growing fastest under the same. • Eg. MOM(markets on mobile) application was introduced 10 months back for GPRS users. Currently 500000 downloads with traffic one fifth of Moneycontrol website. • Eg. Vuclip on mobile in India has a viewer ship of around million minutes in a month(industry figures) INFERENCE: These above examples gives the confidence about the potential of 3G in India

CURRENT 3G SCENARIO IN THE DEVELOPED WORLD?

PENETRATION PROGRESS •First Commercial launch of 3G by NTT Docomo in Japan on Oct 1 2001 •Half the mobile users in Japan have migrated to 3G •Half the mobile users in Korea have migrated to 3G •3G services introduced in March 2003 in Europe starting with Italy & UK • one third users migrated in Italy, 20% migrated in UK
SOURCE: WIKIPEDIA

CONSUMER INSIGHT BCG conducted a study on the changing media habits of the Mobile TV users in the German & UK Markets. The insight that developed was that 5% of the users have stopped watching television altogether, while 15% have reduced their TV Viewer ship by 20%. Does this mean that Mobile will be a substitute for TV in the long run?

POSSIBLE BUSINESS MODEL ON 3G FOR MEDIA HOUSES?

SUBSCRIPTION • Media with real time content • Business Channels • News Channels • Sports Channels • M-news paper • Real time Gaming • Multimedia games

BENEFITS BOTH OPERATORS & MEDIA

ON DEMAND SERVICES • Movies • Music • Reality Shows • Serials • Bollywood content • Sports content • News content
•Eg: Udayan’s view on Market is highly demanded product on IVRS

ADVERTISING: TRADITIONAL Advertising revenue for the traditional media will also get a boost. Traditional media, always had been a mass media. Now, through this the ads will be able to be served more intelligently In future based on Handsets, location on pay per view model for advertisers on free content. CONTENT SELLING • Creation of Mobisodes • highly watched content • best of everything I.e. bollywood, celebs, cricket highlights, music, fashion shows, etc….

ADVERTISING: WEB Advertising revenue for the Web will also get a boost. People will be able to access web sites on the mobile platform. Mobile Platform, will give additional targeting filters to the advertiser, in the form of location targeting, Handset targeting leading to more efficient campaigns.

BENEFITS ONLY MEDIA HOUSE

THANK YOU

Source:The UCLS Internet Report, Surveying the digital Future

• Digital Media has started impacting the Viewer ship on TV in US, on readership of Newspaper,Magazines.(US Data) • Growth of Digital Advertising has been highest at 69% compared to 18% for TV & 16% for print(India)* • Marketers looking at higher efficiency Campaigns (ROI calculation on Digital Space is precise compared to any other medium)

* FICCI & PWC the entertainment & media Industry. Sustaining Growth Report 2008