Reliance Jio in talks with multiple developers for content
So far, Reliance Industries has Hotstar and Roy Kapur Films on board for content on Reliance Jio, and bought 24.9% stake in Alt Balaji for Rs413 crore
Mumbai: Reliance Jio Infocomm Ltd, the telecom arm of Reliance Industries (RIL) is in talks with several web content developers to create content for Reliance Jio users, two people aware of the development said.
This will help Reliance Jio differentiate its product and potentially raise its earnings, they added.
“Some independent producers and writers have pitched scripts for web series and other formats to Reliance Jio,” said the first of the two people quoted above.
“This will be a good platform for content developers, who will get the fastest growing group of video consumers—Reliance Jio subscribers,” this person added.
So far, RIL has Hotstar and Roy Kapur films on board. RIL has also bought 24.9% stake in Alt Balaji, a wholly owned subsidiary of Balaji Telefilms, for Rs413 crore. Alt Balaji is a subscription-based video on demand platform.
“Reliance Jio’s strategy is similar to what telecom companies practise globally—generating content for users. Ten years back, most of the video consumption used to be on home broadband. Now, with 4th and 5th generation (telecom) technology, video consumption has shifted to mobile phones,” said a media analyst, on condition of anonymity.
Cumulatively, this could add about Rs100-150 to incremental average revenue per user (arpu) for Reliance Jio, two analysts tracking RIL for brokerage firms said requesting anonymity. At the end of second quarter for this fiscal, Reliance Jio reported an Arpu of Rs156.40 per month.
Reliance Jio did not reply to an email sent on Wednesday. However, in a press statement on 20 July, RIL had said that the investment in content production is in line with its commitment to invest and grow in telecom, digital and media businesses. Reliance Jio already has a free video-on-demand app in the form of Jio Cinema and a live TV streaming app Jio TV.
According to a 30 November CLSA report, Reliance Jio’s 139 million subscribers accounts for 12% of the subscriber market share in India. This has made it the country’s fourth largest operator after Bharti Airtel (24%), Vodafone (18%) and Idea Cellular (16%).
Reliance Jio has also garnered 9% revenue market share, making it the fourth largest Indian operator on revenue as well.
“The whole idea is to get an upward of Rs1,000-odd wallet share from a customer. Pricing cannot be the only differentiator. So, content creation is key,” said another media analyst requesting anonymity, as he is not allowed to talk to reporters.
As per advisory firm KPMG’s report Media for Masses published in January 2017, over 85% of mobile data used by Indians is spent watching online video.
Google’s YouTube is the country’s largest watched video on demand platform, followed by Star’s Hotstar and Voot TV by Viacom18, a joint venture between Viacom Inc and RIL-owned Network18.
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