Sie sind auf Seite 1von 15

Business transformation in Indian

Entertainment Industry
After years of radical fluctuation, the media
and entertainment industry is finally becoming
more stable.

It’s no longer a question of ‘if’ digital transformation will happen; the question is how companies
will respond. Leveraging the opportunities presented by digital video, new players are entering
the market, capturing consumers’ imaginations—and their wallets. Across the content value
chain, aggressive commercial bets are being placed on new business models, acquisitions,
partnerships and services.

The window of opportunity for the leading players to secure their position is narrowing and
decisions need to be made rapidly. To compete in this new ecosystem, new digital-based
business strategies and associated capabilities are essential. Broadcasters, telcos and cable
companies that hesitate now may spend years trying to catch up.

Current market trends are fundamentally changing the media and entertainment industry,
among them:
1. The growth of traditional revenue streams is declining as new revenue models emerge.
2. Individual business models are being replaced by a complex ecosystem of industry
participants from new startups to superplatforms.
3. Digital brands are gaining prominence, powered by an ability to deliver an engaging multi-
channel customer experience.
These three key trends are a call to action for companies disrupted by the media and
entertainment industry’s digital transformation.
The speed and magnitude of disruptive change that digital video is generating is resulting in the
need for broadcasters, telcos and cable companies to evolve their business models rapidly and
at scale. In order to successfully compete in the new ecosystem, each should consider a
number of changes.

The speed and magnitude of the disruptive change of digital video is forcing companies to
evolve business models rapidly and at scale. To successfully compete in the new ecosystem,
each should consider a number of changes:
 Moving from a silo-based architecture and process landscape to a horizontal approach
supported by common services and infrastructure.
 Collecting data and leveraging analytics can empower organizations to build B2C
relationships across all digital channels.
 As IT becomes more pervasive acrosscore business processes than ever before there are
clear benefits of positioning IT to take charge of the digital journey.
 In a hybrid world where legacy video services coexist with IP-based video services,
companies must operate withbroadcast availability and broadband flexibility.
Digital transformation is happening andcompetition is increasing. Broadcasters, telcos and cable
companies need digital-based business strategies and associated capabilities. The time to start
is now. Standing on the sidelines is notan option.
With high-speed data connectivity finally becoming a reality in India, analysts are anticipating a
transformation of sorts for India’s digital media and entertainment startup sector.

Their top predictions: a spate of consolidations among video-streaming platforms; more

investments by international music apps here; and a pick-up in subscription-based and mobile
advertising revenues.

Cheap 4G handsets and falling data prices led to a surge in data consumption on mobile
devices last year, resulting in high user acquisitions for digital media and entertainment startups
including video-streaming platforms and music-streaming apps.

“(Over-the-top, or OTT) players like Amazon Prime Video, Netflix and Hotstar will only get
bigger,” said Jehil Thakkar, partner at Deloitte India.

But “with over a dozen players in the space, one can expect consolidation and a few players
exiting in 2018. Also, heavy investments by the big players in original programming and regional
content will take place as subscriptions grow.”
Analysts and entrepreneurs attribute the spurt in users across digital platforms to the entry of
Reliance Jio, which disrupted the telecom industry with cheaper access to high-speed data and
forced other telecom companies to follow suit with similar offers. Gaurav Gandhi, chief operating
officer of Viacom 18 Digital Ventures, during an interaction last year said Jio and other telcos
and the introduction of 4G data contributed to the surge in users, including for Viacom 18’s OTT
platform Voot.

“We have more than doubled our monthly active user base to more than 25 million users in the
past six months, with the top 40 cities contributing close to 70% of the viewership,” said Gandhi.
Also, more than 25% of digital media consumption came from regional language audiences, he



Video Streaming
Video industry is also observing shift towards digital formats. Traditionally, the highest video
consumption has been happening on TV; however with the faster growing internet penetration
and access to multimedia devices, more and more time is being spent on consuming digital
videos. The traditional form of TV viewership is giving way to the new segment of
consumers who are choosing to consume multimedia content on-demand. This has led to a
sharp increase in video traffic consumption. There were 31.9 million unique online video
viewers in India in March 2011 who watched 1.86 billion videos; this number of online video
viewers increased by 69% to 54 million in March 2013 who watched 3.7 billion videos 38. This
number of online video users is estimated to have crossed 200 million by the end of 2014.1 year
ago India’s dynamic media and entertainment sector is witnessing tremendous growth in visual
effects, music, gaming, digital advertising and radio segments.

 Media
 Entertainment
 Focus Sector

By 2019, the combined market size of Indian media and entertainment industry will be USD 30
billion, according to the joint report titled ‘Indian Media and Entertainment Industry 2015’.

India’s dynamic media and entertainment sector is also witnessing tremendous growth in visual
effects, music, gaming, digital advertising and radio segments. The growth will be driven by the
content in more than 30 regional languages, digitisation and higher penetration of multimedia

The Indian media and entertainment industry will grow at the CAGR of 13.9% by 2019.India has
a booming print, television and digital media industries. The digital advertising segment alone
reported an explosive growth of 44.5% in 2014 with e-commerce websites contributing to the
maximum spending.



The government has liberalised FDI norms for various segments of Media and Entertainment
industry. 100% FDI is permitted under automatic route in teleports, Direct to Home (DTH),
Mobile TV, Cable networks and headend-in-the-sky broadcasting service (HITS).

For non-news and current affairs channels, 100% FDI is permitted via automatic route. Apart
from granting industry status to the film production for better access to financing, the
government has permitted 100% FDI under automatic route in the industry.


The broadcast industry in India already has around 800 satellite television channels, 242 FM
channels and 100 operational community radios. To strengthen the broadcasting ecosystem in
the country, the Ministry of Information and Broadcasting (I&B) has launched various phases of
digitisation across the country.
The cable TV service digitisation program began with Delhi, Mumbai, Kolkata and Chennai in
2012. The phase-IV of the program will be completed in December 2016 to achieve digitisation
of cable TV services across India. With digitisation, the consumers can take advantage of a
large number of TV channels, better picture quality, reliable connectivity and clear sound. The
consumers can also choose channels as per their budget and choice.

India had 168 million TV households in 2014, which makes it the third largest television market
in the world. The number of TV households will reach to 196 million by 2019 along with 175
million Cable & Satellite (C&S) subscriber base, indicating the 90% penetration in TV
households. The print media market is projected to reach USD 5.9 billion by 2019 with
Compound Annual Growth Rate (CAGR) of 8%.
Animation, Visual Effects (VFX) and Production segment is the newly emerging area in India
which offers opportunities in both domestic and foreign markets. Indian VFX industry is already
known for its top quality work and cost efficiency. Indian professionals did VFX for six out of ten
Oscar nominations in 2014. In the period of 2010- 2014, the industry had CAGR of 17%. It has
the market size of USD 670 million. The government of India has also acknowledged the
potential of the industry. It plans to establish the National Centre of Excellence in Animation,
Gaming and Visual Effects in Mumbai.

According to Registrar of Newspapers in India (RNI), the country had105,443 registered
publications in March 2015.The print industry is expected to grow rapidly in future as literacy
rates and disposable incomes growth in India. Print media growth will be driven by tier II and tier
III. The print media segment is projected to grow at CAGR of 8% till 2019.

In 2015, India produced 1827 digital feature films, according to the report by the Central Board
for Film Certification (CBFC). India maintained its position as a top film producer. The CAGR of
10% in film industry till 2019 will be driven by tier II and tier III cities of India. The digitisation has
helped film industry for the simultaneous release. It is also stimulating demand for foreign and
regional films. To promote India as a filming destination, the I&B ministry has set up Film
Facilitation Office (FFO). FFO will provide single window clearance and necessary assistance to




The government of India launched ‘Digital India’ with an aim to transform the country into a
digital empowered society and knowledge economy. With 27.5 million shipments in the second
quarter of 2016, India is the world’s fastest growing smartphone market, according to the data
by International Data Corporation (IDC).It is also the world’s second largest smartphone market
with 220 million unique smartphone users.

The high smartphone penetration will help Digital India and media segments to grow. The Digital
India campaign will strengthen the industries such as video streaming, online music services
and gaming in India by increasing the internet penetration. The World Bank and the
International Telecommunication Union’s data indicate that 26% of the population has access to
the internet in India with number of internet users likely to cross 500 million by end of 2016. The
launch of video streaming services such as Netflix, Hotstar and Voot shows the high growth
potential of digital entertainment services in India.

“The Make in India, Skill India and Digital India campaigns are clearly positive signals of the new
transformation including GST which is expected to be a game-changer for the sector,” Minister
of Information and Broadcasting M Venkaiah Naidu said at the 5thCII Big Picture Summit.

I&B Ministry is working on to transform India into a global hub of Media and Entertainment
industry by improving the ease of doing business in the sector. Other government initiatives
such as National Communication Policy will further compliment the growth of the sector.

Netflix was founded in 1997 during the emergent days of Internet retailing, when online
competitors to traditional “brick-and-mortar” retail stores were gaining prominence. Rather than
attempt to attract customers to a retail location, Netflix offered home delivery of DVDs through
the mail. When its original website was launched in early 1998, most available movies for rent in
video stores used the VHS cassette format. In contrast, Netflix concentrated efforts on early-
technology adopters who had recently purchased DVD players. Its marketing strategy was to
develop crosspromotional programs with the manufacturers and sellers of DVD players,
providing a source of content for customers. Hastings elaborated on Netflix’s goals in its early
days: “We were targeting people who just bought DVD players. At the time our goal was just to
get our coupon in the box. We didn’t have too much competition. The market was underserved,
and stores didn’t carry a wide selection of DVDs at the time.”
Netflix’s website included a search engine that allowed its customers to easily sort through its
selections by title, actor, director, and genre. Using this search engine, customers built a list of
movies, called a queue, to be received from Netflix. Netflix sent movies to its subscribers based
on the order of titles on the list, with subscribers receiving a new movie from their queue upon
the return of a currently outstanding film.
Amidst prevalent piracy, low Internet connection speeds and availability of full-length movies
and television episodes at very low-costs (or free) on cable TV and several websites, Netflix
launched its video streaming service in India in January 2016. However, its 'subscription-only'
model's pricing was not adjusted to the Indian market but was maintained at the global
standards, which was very high compared to that of the existing competitors. With its strategies,
would Netflix be successful in such business environment? This case study can be used to
learn about market entry strategy of Netflix, its revenue model and pricing strategy vis-a-vis its
competitors in India. This case study enables a discussion on whether Netflix's market entry into
India would be successful in the long-run given the highly price-sensitive nature of the Indian
consumer and other infrastructural challenges in the country.

A quest for global domination

Some in the U.S. have doubted whether Netflix can maintain its market dominance
based on a seeming lack of innovation and erosion of its U.S. library in recent years.

But Netflix hasn’t grown complacent. With 49 million American subscribers – which
makes it available in 43 percent of U.S. households – the U.S. market has less
opportunity for growth. For this reason, Netflix has aggressively pivoted to stake claim
as the first global television network.

This doesn’t mean Netflix is the same everywhere. Right now its library varies
considerably because the norms of international television trade – built before internet
distribution – required that distributors license shows to individual countries or
regions. Netflix increasingly seeks global rights to the series it develops, which will make
future additions to its library available to subscribers around the world.

Here, too, Netflix isn’t simply distributing shows produced for U.S. audiences. It also
develops original series for subscribers in non-U.S. markets that are also available to
U.S. subscribers – for example, “Marseille,” a French political drama; or “Hibana,” a
Japanese drama about the country’s competitive comedy scene. As the number of
subscribers from other countries has grown, so, too, has Netflix’s library of original

No television distributor has ever been able to reach a truly global audience. Netflix’s
experiment as a global, subscriber-funded television portal may be the next chapter of
television history.

Different model, different strategy

For years, television was distributed by broadcast wave – a revolutionary technology
that sends a wireless signal over huge swaths of the country. But broadcasting
technology can send only one message at a time to everyone in its range.

Because video streaming services such as Netflix (what I call “portals”) deliver
programming “on demand” via the internet, viewers can choose what and when to watch
instead of watching “what’s on.” So where a traditional channel’s task is to develop a
schedule, the key task of a portal is cultivating a library of programs.

This leads to different business strategies that, in turn, lead to different programs.

Broadcast networks and cable channels make money by selling audiences to advertisers.
Netflix (and many other portals, including Amazon Video and SeeSo) are subscriber-
funded: Viewers pay a monthly fee for access to the library of content. Of course, HBO
has also long relied on subscribers, which explains the distinctiveness of many HBO
programs, despite its distribution by cable. (HBO launched the portal HBO Now in
2015 to better match its subscriber-funded revenue model with a technology that makes
its library of programs available on demand.)

To succeed, subscriber-funded services must offer enough programming that viewers

find the service worthy of their monthly fee. Each show doesn’t need a mass audience –
which is the measure of success for advertiser-funded television – but the service does
need to provide enough value that subscribers continue to pay.

Netflix’s nooks and crannies

Yet Netflix doesn’t try to offer content geared to a single audience with a specific
interest. Nor does it aim for a mass audience. So how does Netflix – with its 93 million
subscribers – pull it off?

Netflix has adopted what I call a “conglomerated niche” strategy: It develops programs
for a handful of – maybe a dozen – different audience interests. These include
complicated serial dramas (“House of Cards”), action series (“Daredevil”), horror series
(“Hemlock Grove”) and exclusive films starring a popular actor (Adam Sandler).

This is possible only because internet distribution allows Netflix to serve those different
audiences simultaneously and separately. Most Netflix subscribers might not even
realize how many programs Netflix offers, since its subscribers usually aren’t exposed to
programs that they probably won’t be interested in.

Netflix can also do this because internet distribution enables it to gather extensive
data about its subscribers’ behavior, which it then uses to cultivate its library and
provide users with likely desired content. Netflix is notoriously tight-lipped about what
data it collects, but its ability to gather viewing data from a global audience has enabled
the service to recognize micro-genres and then patterns of viewer interest.

If you were to ask different Netflix subscribers about the service’s brand, you’d likely get
different responses. There is no one Netflix; rather, think of it as an expansive library
with many small nooks and rooms. Most subscribers never wander floor to floor.
Instead, they stay in the corner that matches their tastes.

Some other portals, such as Amazon Video, follow a similar strategy. But television and
film streaming are a small part of the company’s overall enterprise. Hulu is both similar
and different. Since Hulu is a joint venture of the companies that own Disney, NBC and
Fox, its library is mostly filled with shows owned by these companies.

How Netflix Has Changed the Entertainment Industry

Before Netflix was a big deal, Hollywood and the entertainment industry had to deal
with unauthorized copies of movies and T.V. shows floating around and being sold and
distributed to consumers. More commonly known as ‘bootlegs,’ movies could frequently
be found being sold first in VHS tape then DVD format for less than the price of a movie
ticket. Of course, the entertainment industry lost profit due to the distribution of
bootlegs, but it was basically par for the course.

In big cities like New York, you can still find people selling bootleg DVDs on the subway
and in the streets, but most consumers have moved beyond that. The future of the
entertainment business is now almost totally in the hands of streaming video companies
like Netflix and Hulu, according to a recent article by MBA@Syracuse, the online MBA
program from Syracuse University. The good news for the entertainment industry is that
they’re getting their rightful cut of the action now.

How Netflix Became Influential

For a time, Netflix was a big draw for movie buffs who just wanted to control the movies
that came on their televisions. Everyone knows that cable television stations such as
HBO and Showtime show a pretty impressive line-up of movies, particularly on the
This is the time in which they premiere new movies specials. Those who watch a lot of
movies kind of got tired of watching the same dozen or so movie a month, so Netflix
gave them access to a library of something like 50,000 new, classic, and foreign films.
For a small monthly subscription fee, Netflix was a huge win for film aficionados. Their
offering of available entertainment options was inexhaustible, as films were frequently
added and taken away. Years into its existence, Netflix made a change that altered the
landscape of home entertainment. Instead of just offering movies, entire television
series were added. Enter what’s known as ‘binge-watching.’

Why Binge Watching Is Crucial

Every time you watch four, five, six, or even an entire season’s worth of episodes in a
television series, you are officially binge watching. Netflix now gives viewers the chance
to catch up on T.V. series in the course of a couple of days.
Before Netflix, you had to get the DVD set of a television series, which always didn’t
become available at the end of a season. In short, Netflix was huge in creating a big cult-
like following for television shows like ‘The Walking Dead.’ Even the creators of
‘Breaking Bad’ admit that the shows would not have been as big a hit if it weren’t for
In fact, the series creators let it spill that the show probably wouldn’t have lasted the
same amount of time on the air if new fans hadn’t binge-watched old episodes, caught
up, and helped to increase viewership season after season.

Consumers Are Now Opting V.O.D. Instead of Cable

Another change that has happened with the entertainment industry is that fewer people
are watching or subscribing to cable. For a much lower price, they can not only watch
Hulu, Netflix, or Sling TV, but they can also customize their viewing experiences.
In short, Netflix made it so that entertainment companies had no choice but to license
their films and T.V. shows to them too. No longer are cable companies getting new
movies months ahead of streaming video and video on demand services, so they don’t
have as big an advantage.
More viewers are tuning in to different T.V. shows and movies than they would
otherwise have watched with a cable subscription service. This is because they don’t
have to tune in to a particular channel at a certain time to watch the newest episode.
Instead, television series have adapted to the demands of consumers.

What Are Viewers Willing to Pay For?

So, there’s the standard video on demand series that you can use to search for television
series, as well as movies that you want to see. There are also video on-demand programs
and apps that can be difficult to find and setup, and not all of them are 100% legal, but
they do make entertainment free for viewers.
Many entertainment industry experts consider these programs like a new age version of
bootleg videos, but on steroids. For every person that will still pay to stream a rental
video or signup so that they can stream T.V. shows online, there’s one who will also go to
great measures not to pay a dime.
These kinds of viewers have always existed, but they never really spoke out about how
they were going about nefariously watching T.V. and movies for free. Now, there are
entire forums dedicated to ‘jailbreaking’ Amazon Firesticks so they can be outfitted with
free movie apps. It seems that viewers are only going to pay for what they put a value on.

Netflix Exclusive Series and Movies

Traditional movie studios and television producers also have more competition, thanks
to Netflix. Series such as ‘The Santa Clarita Diet,’ starring Drew Barrymore is an
example of what Netflix is willing to invest in. Not only are these movies and series only
available on Netflix, but they give viewers yet another reason to maintain their
subscription fees.
The first projects put out by Netflix were met with negative criticism, but now, with
‘Stranger Things’ gearing up for a Golden Globes nomination, the video streaming
service is starting to be taken seriously in the entertainment industry. With more
exclusive content, consumers are going to have to decide if they’d rather watch live T.V.
streaming apps that also give them access to videos on demand, staying with Netflix, or
investing with both.

One Netflix Account – More Options

When you get cable, you pretty much only have one place that you can watch it – at
home. Sure, there are apps that also enable you to watch certain channels on your
mobile phone, but these apps don’t allow you to flip the channel like you do on your T.V.
Netflix makes it possible for you to sign-in wherever you want to watch T.V. You can
also have multiple users on one account at the same time, so your boyfriend can watch
Netflix while he’s on his laptop in the living room while your great-aunt enjoys a
different movie in the guest room before bed. Netflix is giving viewers more options and
fewer limitations for pennies on the dollar.
People are still watching copious amounts of television; they’re just getting smarter
about it. DVRs are now used to record shows that come on at inconvenient times, so
viewers don’t have to try and build their schedules around television show broadcast
times. Even those who are on a budget can keep up with their favorite television series
during their first run, by using subscription-based video services to catch up and binge
Netflix is even helping to create a new generation of stars on its own, with some of them
having no previous television or film credits. Nowadays, if you want to watch television,
you can actually do it from a tablet rather than a standard television set. Turn it on when
you want, pause it when you need to take a break, and come back to pick up where you
left off – on your terms.

SWOT Analysis Of Netflix

You probably have a Netflix account. Almost everyone does. Seriously. Their consumer
base is over 100 million people all over the world. And that’s not surprising when you
consider the power of their brand recognition plus the content they offer.

They’ve paved the way for subscription streamed content. Now, similar companies with
matching buying power are creating their own apps and monthly subscriptions for
exclusive content. They’re Netflix’s competition and ready to battle them in the ring.

In this SWOT analysis of Netflix, I’ll be addressing what they do so well customers
break their F5 button to see what’s been recently added. But I’ll also dive into what
makes those same consumers cringe away from the screen. I discuss the competition
and how Netflix is expanding into new areas for their content.
1. Strengths: A Leader In Subscription Streaming Services
Netflix is the leading online streaming site. Although others have risen up, Netflix is well
known throughout the world for it’s selection and relatively cheap monthly price.
Because of the popularity, the consumer base is massive — over 100 million users
massive and viewable in over 180 countries.

With such high numbers, Netflix has an easy time bargaining for content from many
countries. The massive exposure is promising for companies. Netflix often picks up
television series that have been cancelled and left to rot. They create “sequels” or new
seasons years after the original show ended. Like with Gilmore Girls, which had a
Netflix special spinoff.

Netflix originally streamed older shows like Friends, but within the last few years, has
started creating their own original content. Many of which have become rousing
successes including Orange Is The New Black and Stranger Things. Not only were these
shows developed with interesting premises, you’re able to binge-watch the series, rather
than forced to wait each week for a new episode like with traditional television shows.

They’re also branching out more into foreign shows. Netflix created a second season for
a Japanese reality show called Terrace House that’s been a hit with international
viewers. They’ve gone on to renew the series several times, allowing people who may
never travel to these countries to catch a glimpse. And surprisingly, people are loving it.
Plus, no commercials!

The biggest complaints among users who watch (or used to watch) television were far
too many commercials. Many felt they were paying to watch commercials with television
shows mixed in. Customers jumped on Netflix for their ad-free content and although
Netflix has discussed putting ads in, the viewers have unanimously voiced their
complaint against it.

2. Weaknesses: More Original Content Isn’t Always Best

Even though they’re branching into more original content, the cost of these shows and
movies is incredibly high. In 2017, Netflix invested $2.5 billion just to sure the rights for
these original shows.
They’ve also decided on some… interesting movies that users weren’t thrilled with. This
included the 3 movie deal with Adam Sandler — great for Sandler, but it left a terrible
impression on users. The ratings page the movies on Netflix are skewered by dozens of 1
star (bad) reviews on the site.

And speaking of reviews, users have also complained about that system because of how
new shows are recommended. Initially, you could offer a star rating to shows. But now
all you can do is give it a thumbs up or a thumbs down.
Often, the site uses a “match” system to select your next show, but it’s not accurate. A
show you despise can still manage to be a “92% match.” How? People don’t really know,
and no one really cares to find out. They just want it gone.
Also, shows disappear. Netflix doesn’t own the rights to their shows. When the rights
expire, the shows disappears. They can eventually re-appear, but who knows when?
What we do know is that it’s not uncommon for seasons to just disappear without
On a side note, Netflix has gotten flack for their lack of environmental initiative.
Competition, like Amazon, have openly discussed their plans to be environmentally-
friendly. They’re using renewable energy for their services, but Netflix hasn’t matched
the initiative.
Netflix is also inching their prices up. Initially, a monthly subscription cost less than $10
a month. But they’ve risen the prices twice within a couple years Although the hike has
been a dollar or so each, much of the consumer base loved Netflix for their affordability.
Seeing the prices rise makes them wonder if this is just the beginning.

3. Opportunities: Branching Into New Lands

Even though Netflix is available in many locations, China isn’t one of them. Netflix has
been having difficulties with licensing. Now they’re trying a different method of joint-
venture to use Chinese media to stream content.
Netflix is also partnering with other companies around the world, like Europe. They’re
working with the BBC to not only comply with European laws, but to also gain
knowledge about this customer base. It’s a double win for the company.
As technology advances, Netflix can take advantage. We’re watching shows in higher
quality on different formats like smartphones and tablets. Netflix is viewable on these
devices, and can offer shows in the quality people desire.

4. Threats: Everyone Wants In On This

The competition is fierce.

Facebook, the social media ogre, has started to create their own original content. But
there’s also Amazon, Hulu, HBO, and YouTube to worry about. These platforms offer
their own unique program for a price. Although the offerings aren’t as expansive as
Netflix, the brands have the power to grow. And what they have, Netflix never will.
Like Game of Thrones owned by HBO. Or the exclusive shows by YouTube creatives on
YouTube Red.
Netflix also did a deal with Disney to show their animated films. But that has essentially
fell through as it seems Disney is considering their own streaming services instead.
Monthly subscriptions appear to be the the future for television and content creation,
and everyone wants a piece of the sweet pie Netflix is trying to hoard
More and more media consumption is happening on digital media, and people are more
time on digital media as compared to traditional media. This increase can be credited to
the improvement in mobile devices technology and internet connectivity, which has
provided the viewers with the option of accessing digital media content on the go.

Audio and video have emerged as the leading online traffic generators and are expected
to increase their share of the pie with increasing internet penetration and service
adoption. Marketers are shifting budget spends in tune with the shift of viewer
preference towards digital media from traditional media.

India has the largest young population in the world which is driving the digital media
consumption in India. Internet traffic in India is being driven by mobile internet users.
The major reason for this will be the availability cost efficient smartphones in India,
improving 3G and 4G internet coverage and fast reducing data prices.

This has given rise to the demand for on-demand digital entertainment services like
audio and video streaming. However, monetization models for these services are still
evolving. Ecosystem players are struggling to identify the correct models that can be
scaled and are experimenting with various levers like price points, value offerings and
mixed model approaches to arrive at the most feasible option. Leading digital media
players have adopted hybrid models where they provide a lot of content free of cost but
charge for their premium content.

Video industry in India is also seeing the shift towards digital content. Younger
demographics are guiding the video consumption in India. With improved network
speeds, demand for HD and UHD video content is expected to rise along with standard
definition video streaming online. Like digital music players, digital video players are
also adopting both subscription and ad monetization models and offering personalized
offerings to maximize adoption. Going forward, digital audio and video on-demand
services will see a lot of activity. As this space heats up, getting business model right will
be critical for success.