The Future of Media - Vanita Kohli-Khandekar at the IndiaSocial Summit 2012

Vanita Kohli-Khandekar

The Future of Media By Vanita Kohli-Khandekar


More media

The battle for scale

The ghettoisation of media consumption

What the future is about


More media


More mass media

More mass media that consumers pay for

What is more media….


Where we stand

India - $16 billion media and entertainment industry

China - $86 billion media and entertainment industry

1.2 billion people

9000 cinema screens 142 million TV homes 110 million copies of

newspapers sold daily 873 million mobile

phones 55 million PCs

1.3 billion people

9230 cinema screens 414 million TV homes 136 million copies of

newspapers sold daily 1 billion mobile

phones 100 million PCs

Vanita Kohli-Khandekar 6

We are one of the most voluminous media markets in the world

And yet one of the most under-penetrated ones.

Except perhaps for newspapers and cinema screens, we are nowhere close to China.

And investors know that. That is why a bulk of the investment in media – more than $6 billion so far – has been happening in media infrastructure. That is where all the money is going.

The shape of the market


Where the money is going

Supply side Demand side

Post production studios (Pixion, Prime, Real, Reliance)

Production studios Outsourcing (Bharti,

NDTV, Reliance) More news bureaus,

print companies

Multiplexes Digital cinema screens DTH Digital cable Mobile phones Internet connections PCs Smart phones Tablets


TV Print Films Radio Internet0

100

200

300

400

500

600

700

800

333

232

320

122

11

710

345

80

177

100

20002010

Figuresinmillion

Media consumers are up…


TV Print Films Radio Internet0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

10,0007,000

2,600100 100

33,000

18,000

14,000

1,000 1,400

20002010

FiguresinRs crore

Revenue is up…


There is a strong positive correlation between investment into infrastructure and growth.

So all the money flowing in means more television viewers, more cinema goers, more newspaper readers and more mobile and internet users. That means more films, TV shows, radio programmes and variety because higher the penetration the greater is the ability of the industry to monetise content.

To my mind if we keep expanding that base, the biggest challenge the M&E business faces can be met with some degree of success. And that brings us to the second prediction

What this means


The battle for scale…continues


Tim

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1000

2000

3000

4000

5000

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Revenue (Rs crore)

India’s top media companies


The largest mobile company in India, Bharti Airtel is almost $12 billion in top line

The Brazilian TV market is less than half of India in volumes and twice as profitable

The US film industry makes five times the money India does at the box office, with half the films.

For perspective


Even if cable TV/DTH penetration goes from 110 mn to 142 million you would have added only a billion dollars to industry top line

If TV penetration increases by 10 per cent of total HHs, you add another $82 million dollars to industry top line

If screen count goes up by 2,000, you add a few hundred crores to top line.

For perspective


Why can’t we grow?

Consumers Advertisers

Pricing power limited by extreme fragmentation

Regulation/taxes

Pricing power limited by extreme fragmentation


Large and unhappy

Op Margins (%)

Channels

Homes (mn)

0 100 200 300 400 500 600 700

20002010


Just look at TV

It is roughly 50 per cent of the M&E industry in India but ad rates and prices have have actually fallen in ten years.

The fact is that without pricing power monetising growth, even if penetration happens is a problem.

This is true across media segments.

So the battle for scale will continue, till some level of consolidation happens and pricing power is restored to the market.

India’s unhappy TV industry


The ghettoisation of media consumption


More media, but still we limit our choices

More specialised consumption

More about me, myself, my tastes

Where is serendipity?


Five years back when you read a newspaper or magazine or watched TV you were willy-nilly exposed to stuff that bored you, interested you mildly or gripped you though you never thought it would. You would end up reading about things that you might not have thought interested you.

Now there is more democratisation of media, more formats, devices and content, but we choose to limit our choices. Eg a Twitter feed

What that means


Because we don’t allow serendipity in our media consumption habits, we ghettoise ourselves to an area or a point of view. We don’t notice other points of views or subjects or pieces of knowledge.

As a parallel eg - there is a huge body of research that shows that consuming information on new media devices chips away at our ability to read, absorb and reflect on information. We browse, power read and the best of readers can’t take in text for more than a few minutes.

What is ghettoisation


This has created the paradox of the distracted viewer/listeners/surfer

The more distracted we are the more the advertiser and media owners seek to get a large mass of us together, because that is the only way we make any economic sense.

What is ghettoisation


An online reader of a newspaper in the US commands less than 14 times the ad rates that a print one does.

If you see Frasier on TV while your friend sees it online at the same time, you are the consumer advertisers will pay to reach.

The distracted consumer


So the market still attaches a premium to our ability to concentrate, absorb and take in what it has to offer.

One has to wonder if it does that to serendipity as well.

Note - newspapers still have the best rates and are the most profitable media segment to be in, India.

What a lot of the new media technologies offer is the ability to cut yourself up into small slivers of interests. While that is very nice , there is the whole issue of how to make a business out of this.

Because a multi-tasking consumer, not willing to pay for all the media he is using, is of little use to the advertiser as well.

Is there a premium on serendipity


Even as we scale up and increase penetration there are sub-textual changes that both advertisers and media owners will have to tackle.

This then is the thought I will leave you with

And so …….


Thank you

The Future of Media - Vanita Kohli-Khandekar at the IndiaSocial Summit 2012

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