4G may make video content viable

Salil Kapoor couldn’t have timed his move better. Last week, the chief operating officer of Essel Group’s DTH platform Dish TV joined HOOQ as managing director of its India operations. Headquartered in Singapore, HOOQ is a video-on-demand service or what’s also known as an OTT platform. OTT, or over-the-top, content in broadcasting refers to delivery of audio, video and other media over the Internet.

What makes Kapoor’s move opportune is the launch of 4G technology in the country that is expected to alter the media and entertainment landscape in 2016, especially for platforms like HOOQ. This video-on-demand service and others of its ilk such as Spuul or soon-to-be launched Netflix will gain tremendously once 4G penetrates deeper and expands wider.

HOOQ is a venture between Singtel, Sony Pictures Television and Warner Bros, and claims to deliver over 30,000 hours of Hollywood and Bollywood content over the Internet.

To be sure, 4G, a mobile telecommunication technology, has been launched by a number of telecom companies including Idea, Airtel and Aircel. More recently, on 27 December, Reliance Jio Infocomm, the telecom service unit of Reliance Industries, launched 4G technology-based services initially only for its employees. But the services are expected to be rolled out for consumers in the next few months.

There are several ways in which 4G will affect the entertainment ecosystem as well as the life of a consumer.

Currently, the fixed broadband infrastructure in the country is a low 6% of television households. Besides, less than 10% of Internet users have speeds of more than 4 megabits per second, which limits the experience of premium video content. That is not all. The cost of broadband is still quite high for subscribers. However, with the arrival of 4G, this is expected to change.

What 4G will make possible is to give consumers more bandwidth, better connectivity and, hence, better streaming of heavy files, namely, video. In short, it will make video streaming flawless.

What is also likely to happen is that when a big telecom firm launches 4G at a competitive price, others will slash their rates too. The ultimate beneficiary will be the customer, who can then explore the Internet at lower prices and faster speeds.

That is not all. 4G will enable “pull” and not “push” in entertainment consumption, that is, consumers pulling content as opposed to content being pushed to the viewer. Since traditional television is linear, a broadcaster is constantly pushing out news, sports or soaps, resulting in appointment viewing.

However, increasingly consumers—men, women and children—are shying away from appointment viewing. They are pressed for time and wish to consume entertainment (or news) at their own convenience. Earlier family leisure time meant watching TV together. That is changing. Consumers now prefer individual screen time and not family screen time. Family screen time is a dying need.

From his experience at Hotstar, the OTT platform of broadcaster Star India, Ajit Mohan, executive vice-president and head of digital at the company, says that there is an appetite for long-form content on the mobile. The only roadblock has been the cost and quality of data. Mohan believes 4G will change that. Currently, people spend 35 minutes per day per user on Hotstar, which has seen 40 million downloads since February 2015. He expects this to explode if data costs come down.

Clearly, 4G will lead to better bandwidth and greater affordability. It will also lead to proliferation of multi-screens or better connected devices like smartphones, tablets and smart TVs. It will be the
low-priced smartphones that will trigger 4G growth and the ensuing explosion in video consumption. Reliance Jio has already announced the launch of its competitively priced handsets under the Lyf brand.

Besides, video consumption will also be driven by the consumers at the bottom of the pyramid. They are likely to bring in the volume if data costs drop dramatically.

Eventually, 4G will make video content a viable option. It will bring in the consumption.

The e-commerce businesses are likely to get a big boost as a result of 4G as this could make mobile the default transaction and content choice for consumers. “For a certain section of the society it already is and it will become more pervasive,” says Puneet Johar, chief executive of TO THE NEW Ventures that runs live video entertainment app #fame. The company operates several digital businesses in India and South-East Asia.

So do television broadcasters need to worry about 4G? Will mobile be the new TV?

The answer is both yes and no. Johar believes that ultimately television will be overtaken. Video consumption on the mobile will see exponential growth as 4G becomes pervasive and affordable. Over the next five years, mobile will take share from TV in terms of time spent on video consumption. Although in a market like India, outstripping television viewership could take a decade or more, mobile video will start putting a strain on the television revenues in the next three years, he says.

Currently, the average time spent on TV in India is approximately three hours per day. In the US, the figure is six-seven hours. So there is headroom for growth for both TV and mobile.

Kapoor, now spearheading video-on-demand platform HOOQ, firmly says that any new technology will affect the existing stakeholders. But the multi-demographic nature of our society may allow old and new technologies to coexist for a while.

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.