Mumbai: Television broadcaster Star India Pvt. Ltd plans to convert its website Indya.com into a digital distribution platform beaming all kinds of content, including that from rival broadcasters, and generating revenue largely through subscriptions.
Star India says it is in talks with Zee Entertainment Enterprises Ltd (ZEEL) and Multi Screen Media Pvt. Ltd (MSM) on the commercial terms of bringing their content onto Indya.com, which will be styled on the lines of Hulu.com, one of the largest digital distribution platforms in the US.
Consumers would be able to access the content on any device, whether it’s a smart TV or a smart phone, from the platform, which could be a potential game-changer in the way television is consumed in this country.
Hulu, which shows movies, episodes of TV series and music videos, is a joint venture of News Corp., NBC Universal and the Walt Disney Co. On one platform it provides content from various networks such as NBC, Fox, ABC, Nickelodeon, deriving its revenue from subscriptions and advertising.
Star India’s chief operating officer Sanjay Gupta
Digital experts say Star had earmarked Rs 40-45 crore for the digital project, but is likely to spend a lot more because a bigger investment is required for both front-end and back-end operations. The broadcaster had been expected to launch the platform in October-November, but the plans have been pushed to the first quarter of 2012.
Star is working with various technology partners—July Systems, Autonomy Interwoven and the video platform Ooyala, among others—for this project. It is expected to use AdTech’s ad-serving technology. Agencies that are helping with the design and campaign include OgilvyOne, G2 Interactive, and Law and Kenneth (Digital).
Star India’s chief operating officer Sanjay Gupta said the broadcaster had big plans in the digital space for India. The first part of the plan has already been executed with episodes of television shows, or mobi-sodes, being created for mobile phones, and the launch of applications for the iPad and iPhone. The move made it the first general entertainment channel to enter the iTunes app store.
“What we are doing is building a digital ecosystem, through which consumers can access content on their preferred device,” Gupta said. “Bandwidth continues to be a problem in the country, which is why we are collaborating with a lot of third-party companies (technology partners) so that we are able to deliver faster videos and a good interface.”
“We want the technology to be perfect before we go ahead with the launch,” Gupta said, adding the plan was to bring some top television networks onto the platform. “The more the numbers, the better it is,” he said, because the idea was to position the site as a one-stop destination for content.
Gupta cautioned that much of the project was a work-in-progress; it may start in a small way and be built up along the way.
He said it was premature to comment on whether Star would monetize all the content on the site and what revenue-sharing model it would adopt with its partners. The business model would be largely subscription-based, although advertising could contribute a part of its revenue.
He added that the current distribution contract with Zee did not cover this venture. “We are in fresh discussions with Zee on this matter,” Gupta said. He did not comment on how much money would be invested in the venture.
Danish Khan, vice-president of marketing at MSM, remained unavailable for comment. An MSM spokesperson said the company was not in a position to comment. A ZEEL spokesperson did not respond to Mint’s email and phone queries.
Prasanth Mohanachandran, founder of digital company AgencyDigi, said Star will have a sizeable first-mover advantage once the project gets off the ground.
“Competing networks could very well think of starting a similar venture themselves,” he said. “But it would take them a window of one-and-a-half years in order to put it together. If they choose not to come on board the Star platform, they lose the money-making opportunity, and plus it’s a year or more of waiting.”
Mohanachandran added that there isn’t much Indian online video content currently, let alone paid-for content.
“The audio-visual format bridges the barrier of literacy. Indian producers would have avenues to put in content and generate money from that content,” he said.
Mohanachandran says it’s a misconception that people will not pay for online content. “People using iPhones are already used to paying for content. Even in tier-two cities, there are SIM cards with pre-loaded content,” he said
Mahesh Murthy, chief executive and founder of digital marketing firm Pinstorm Technologies Pvt. Ltd, said any general entertainment channel would want to expand its base and reach out to the people migrating online.
“They want to follow the YouTube success story. But the thing that’s worked for YouTube is that it’s quite democratic in the content that it puts out. For instance, it does not give precedence to a soap versus a Kolaveri and that’s led to its popularity. There’s every form of video content available.” The reference is to Why this Kolaveri Di, the Tamil music video that’s been watched by millions since its YouTube debut last month.
L.K. Gupta, chief marketing officer at LG Electronics India, said digital expansion is a logical move for media companies.
“As of now, only YouTube is structured and geared to provide huge video content, but it is everything for everyone. A focused approach guarantees quality video content,” he said.
India has less than 200,000 smart TV sets, but over 10 million smart mobile handsets, Gupta said. “Add to this premium-end tablets and there is an audience,” he said, “but is doubtful whether users would be willing to pay for content given a profusion of free videos.”
Abdul Khan, senior vice-president at Tata Teleservices Ltd, shares Gupta’s doubts about the revenue model.
“It’s a networked world and eventually everything’s moving to an open-source model,” Khan said. “Star is ahead of the curve but I have doubts on the business model. There haven’t been too many successful subscription models online.”