Since short video apps are driven by content available on them, acquiring influencers ensures stickiness on the platforms
NEW DELHI :
In their quest to retain users on their platforms, Indian short-video service providers have started throwing big money at influencers to get exclusive rights to the content. According to an industry executive, a company has even designated a multi-million dollar fund just to acquire influencers.
Influencers are a critical pillar of the growth strategy for short video platforms, which are trying to scale up rapidly to fill the void created following the ban on TikTok. The presence of an influencer who can draw big crowds is critical to adding new users, besides improving user retention.
For mature platforms, such as Instagram and Twitter, the relationship between platform and influencer is different. Influencers need a platform more than the platform needing them. On the other hand, growing platforms have to spend money to drive influencers towards them.
According to Gautam Madhavan, founder and chief executive, Mad Influence, an influencer marketing firm, platforms are spending between ₹6 lakh and ₹75 lakh for a six-month exclusive contract. Since short video platforms are driven by the kind of content available on them, acquiring influencers ensures stickiness on the platforms. Influencers also bring their followers with them, increasing the overall daily and monthly active user base for a platform.
Madhavan said the value of an influencer is driven by their face value, not just their follower count. That means an influencer who has presence across myriad platforms, such as Instagram and YouTube, will be more valuable than the ones on TikTok. TV celebrities and singers cost even more. “All the dealing and contracts are for 4-6 months," he said. “The strategy for all platforms is the same. They will try and help influencers grow on the platform, which increases the future stickiness for these influencers," he added. Comedy, tech and fashion are among the most relevant influencers, while gaming and travel influencers are in low demand.
Backed by big groups and investors, MX Taka Tak and ShareChat are considered to be the big spenders, while smaller ones like Chingari are trying to acquire creators.
“We are committed to ensuring our influencer partners make money. We work closely with them to enable this," said Karan Bedi, chief executive officer, MX Player. Bedi, however, did not disclose how much money Taka Tak is spending on creators. A ShareChat official also confirmed that the company is aggressively acquiring creators right now. Chingari didn’t comment for this story.
To be sure, while one can spend to acquire influencers and scale up the platform quickly in the short run, this strategy cannot guarantee success. Experts said while TikTok did gain from acquiring influencers, its user experience and the artificial intelligence (AI) algorithms played a critical role in its success.
“There has been a ridiculous amount of action in this particular segment in the last three months. Paying creators and getting them on board is good stuff, but it needs to be seen if it still remains sustainable three years from now. Different companies in this space are differently capitalised. One company has an internal fund, another might be using their revenues to do it," said Anurag Ramadasan, head of investments at 3one4 Capital, which has invested in short-video platform Mitron.
“I think the strategy will further evolve, wherein paying creators will just have to be a small part of what you are doing," Ramadasan added.