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The Future of Internet Content Consumption in India | Zinnov

This study is a comprehensive view of the future of Internet content consumption in India, focusing on key aspects like -

a) the current state of Indian mobile ecosystem
b) changing paradigm of content consumption
c) the disruption in content creation and curation
d) the role of ecosystem leverage and collaboration

To get more insights on the trends shaping the content consumption landscape in India, write to us at info@zinnov.com.

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The Future of Internet Content Consumption in India | Zinnov

  1. 1. THE FUTURE OF INTERNET CONTENT CONSUMPTION IN INDIA FRICTIONLESS CONSUMER EXPERIENCE FOR MOBILE-ONLY INDIA AND BHARAT
  2. 2. 01THE CURRENT STATE OF INDIAN MOBILE ECOSYSTEM PAGE 6 00EXECUTIVE SUMMARY PAGE 5 02CHANGING PARADIGM OF CONTENT CONSUMPTION PAGE 11 03THE DISRUPTION IN CONTENT CREATION AND CURATION PAGE 17 04THE ROLE OF ECOSYSTEM LEVERAGE AND COLLABORATION PAGE 24 05CONCLUSION PAGE 26
  3. 3. Use of mobile phones in India is no longer an urban phenomenon. India has almost 1Bn [1] active mobile users currently, of which 40%[2] are from rural India. Over the last decade, with the surge of mobile Internet users in India, there has been a consequent influx of global and local players in the Indian market. Also, consumers have started displaying unique online content preferences. This whitepaper on “The Future of Internet Content Consumption in India”, discusses the key enablers of this changing consumer behavior and the need for a frictionless experience. The whitepaper covers the current state of the Indian mobile ecosystem and the persona of Internet users across the nation. The whitepaper also elucidates the correlation between changing paradigms of content consumption and creation, as India rapidly evolves to become a mobile-only nation. It further analyzes the supply side of the ecosystem such as smartphone manufacturers, marketers and content publishers, and includes the key strategic initiatives by the companies to address the evolving preferences of the consumers with respect to online content. Special emphasis has been given to the emergence of innovation-first platforms and consumer-first platforms and their role in helping ecosystem entities monetize beyond current capabilities. PREFACE
  4. 4. To understand the evolving landscape of the mobile ecosystem in India, a combination of primary and secondary research was employed. This included one-on-one interactions with stakeholders across the mobile ecosystem and personal interactions with consumers across more than 10 cities in India. The personal interactions with users were targeted to understand the user behavior and preferences for online content when accessed through smartphones. Through this we were able to understand the consumer’s preference in terms of online content and were also able to assess the challenges and the current state of mobile ecosystem entities in India Primary Research Secondary Research To support the findings of primary research and obtain more insights on the qualitative and quantitative aspects of the mobile ecosystem in India, multiple secondary sources such as government-funded telecom reports, industry association reports, surveys, and news articles were leveraged. Individual data sources are mentioned as footnotes throughout the report, wherever applicable. The report will benefit the following ecosystem entities: RESEARCH METHODOLOGY 04 RESEARCH METHODOLOGY Marketers who heavily focus on mobile-first strategy for brand marketing and are facing challenges in brand recognition and discovery Original Content Publishers such as news publications, original videos and games developers, who find content discovery a major pain point Smartphone Manufacturers who want to understand the opportunity for tapping into the mobile Internet ecosystem Content Aggregators who want to understand the evolving consumers’ demands and the winning imperatives for the future Cities with population more than 3 Million were categorized as Tier 1, cities with a population between 100,000 and 3 Million were categorized as Tier 2, and cities with population less than 100,000 were categorized as Tier 3. INDUSTRY ECOSYSTEM ENTITIES PROFILES Marketers Smartphone Manufacturers Content Publishers Social Media Platforms E-commerce companies VP of Product, Head of Marketing, Head of Customer Experience, Head of Content Creation, VP- New Accounts SMARTPHONE CONSUMERS 510 smartphone users Mode- Personal Interactions and written survey Tier 1, Tier 2, Tier 3 cities Age Group 18-35
  5. 5. EXECUTIVE SUMMARY India is on its path to becoming a mobile-only nation: More than 97%[3] of total Internet users access it through their mobile phones in India and with Internet access gaining more prevalence across rural India, the country is rapidly evolving to become a mobile-only nation New and unique content preferences emerging from the next high growth area – rural India: Internet adoption in rural India has increased by a remarkable 35% in 2018 in comparison to single digit growth in the Urban India[4] . Most of these users access the Internet for the first time through mobile phones and therefore present unique preferences in terms of content variety, language, and format Consumer behavior is evolving across Urban and Rural India as they become more discerning with content preferences: Mobile Internet users across the country have started exhibiting clear content preferences with respect to online content Content platforms are leveraging the accelerated content demand of 3Vs – Variety, Vernacular, and Video-first content for growth: Indian platforms such as Glance and Dailyhunt are exemplifying the union of the 3Vs with original and aggregated video content in regional languages along with a variety of offerings such as news and games as well. India is catching up on the trend of ‘Intersection of Content and Commerce’: Platforms such as Instagram and Glance enable marketers to sell their products on their platforms, allowing a new business model, based on a content-commerce intersection to take shape. Innovation will be a key differentiator in bringing disruption and acquiring new and unique users: Innovation in content creation, business, and delivery model are becoming imperative for both global and Indian players to sustain and grow in the dynamic Indian mobile space. Glance is one such platform that is built on the foundation of innovation. Mobile ecosystem entities in India are collaborating with curated content platforms to address key pain points: : Partnership with content platforms is expected to help ecosystem entities such as smartphone makers, marketers, and content publishers to address some of the prominent challenges of content discovery, distribution, and monetization. With the smartphone user base set to cross the 800 Mn mark by 2022[5] , India is expected to soon transform to become a mobile-only nation. In the last decade, consumer behavior and preferences towards mobile usage have evolved drastically and this trend will continue till mobile phones and the Internet become ubiquitous. ‘Frictionless Content Experience’ is defined as the emerging consumer preferences with respect to the availability of online content that is relevant and easy to access, and is available in a mobile-first, beautiful, seamless, and preferably in a video-based format. This is the most significant shift in consumer behavior that has been observed among mobile users across urban and rural India, when engaging with online content in the last one decade. 05 EXECUTIVE SUMMARY Source: Consumer Survey, Primary Interactions and Zinnov Research Analysis • 430 Million 4G users in 2018[6] • 68% preferred video based content over text based mobile content • >70% selected Tamil and Kannada as their preferred language • 30% preferred recommended content over search based • >65% encountered high frequency of fake news across social media platforms • 76% of the survey respondents chose mobile phones for accessing online content over desktop and other platforms High speed and affordable internet Mobile First Content Vernacular, Video and Variety Personalisation and Moderation 3V Evolving Consumer Demands in the Indian Mobile Ecosystem
  6. 6. 01THE CURRENT STATE OF INDIAN MOBILE ECOSYSTEM
  7. 7. 07 THE CURRENT STATE OF INDIAN MOBILE ECOSYSTEM During the course of this research and personal interactions with mobile users, the key ecosystem entities as perceived by the consumers, were identified and have been represented in the image below. The scope of this whitepaper is limited to Content and Gaming Platforms, Marketers, and Smartphone Manufacturers and their role in the ecosystem is elucidated across different sections of the report. Content and Gaming Platforms Telecom Providers Mobile Consumer in India E-commerce Platforms THE MOBILE ECOSYSTEM IN INDIA Smartphone Manufacturers Service Platforms Marketers
  8. 8. Mobile-first refers to the preference of using mobile phones over other devices for accessing the internet. Smartphone adoption in India stood at approximately 39% as of 2018[6] , making it the second-largest smartphone user base globally. This is attracting global behemoths to invest and capitalize on the foundation of scale in the country. Each entity of the mobile ecosystem has been actively contributing to this transition by introducing mobile-first and more recently mobile-only experiences to increase user engagement. For instance, OTT platforms such as Netflix, are introducing ‘mobile-only’ weekly plans in India, owing to the increasing traffic from smartphones on the platforms. Smartphone manufacturers have also made it easier for consumers to purchase a smartphone with a substantial fall in the average cost of smartphones from 2010 to 2019, resulting in a growth that led to a smartphone user base of over 500Mn[7] in India (as of 2018). Similarly, the following image showcases some other factors from the mobile ecosystem’s perspective that are propelling the transition of India from a mobile-first to a mobile-only economy. EVOLUTION OF INDIA FROM MOBILE-FIRST TO A MOBILE-ONLY ECONOMY Mobile Ecosystem Entities are Enabling the Mobile-Only Shift in India 08 THE CURRENT STATE OF INDIAN MOBILE ECOSYSTEM 1.1 Active Government Involvement Increasing affordability of internet Smartphones becoming affordable Adoption of mobile-only business models Increasing focus on Mobile-led digital Marketing Emergence of Cash-less economy 30+ govt. funded mobile apps launched since 2015 200+ Mn to 900+ Mn 4G subscribers from 2017-2022 500+ Mn to 800+ Mn Mobile Internet Users form 2018- 2022 Entry level smartphone: ₹12000 in 2010 to ₹3000 in 2018 530+ Mn to 860+ Mn Smartphone Users from 2018- 2022 Customizing business models for the Indian mobile content consumers Netflix and Zee5 have recently launched ‘mobile-only’ plans only for India. 47% to 67% increase in share of mobile advertising of total digital advertising budget, 2018-2021 INR 5,102 crore to INR 16,718 crores increase in advertising spending on mobile, 2018-2021 15+ in-house mobile wallets introduced since 2016 Mobile based transaction value increased- INR 9.8 Tn to INR 18 Tn from 2016-2018 Launch and Promotion of Digital India Initiative Source: Zinnov Research Analysis Advent of on-demand economy On –demand platforms such as Uber, Urbanclap and Zomato are witnessing increase in mobile-traffic Launch of Progressive Web App (mobile version of website) by Ola and UC.
  9. 9. THE 4G BOOM AND THE ANTICIPATED 5G DISRUPTION 09 THE CURRENT STATE OF INDIAN MOBILE ECOSYSTEM 1.2 3. Fuelling transition to become Mobile Only India With 5G, browsing and downloading speed are expected to be as high as 10GBPS and mobile content consumption can be foreseen to increase manifold, particularly across rural India. Video content will be the category that will be most impacted, followed by games and e-commerce. 5G continues to be the strategic pivot for telecom and OEMs in India, with wide-scale rollouts expected by early 2021. The proliferation of 5G based connected devices, mobile apps, and remote operation is expected to be a key driver for India to transition into becoming a Mobile-Only nation in the next decade. Potential to leverage mobile Internet across urban and rural populations across sectors such as Smart Agriculture, Smart Cities, Smart Manufacturing, Smart Healthcare, and Smart Education 3 ways in which 5G will impact the mobile ecosystem in India 1. Digital India 2. Surge in content consumption through mobiles According to the Department of Telecom (DoT), the price of mobile internet plans has dropped by 93%[8] between 2014 and 2017, consequently resulting in a 25X surge in data usage in the same period. India currently has the lowest-priced data plans globally and this trend is expected to continue to boost the stupendous growth of mobile Internet users in the country. It was in the year 2016 when India saw a rise in the global mobile Internet consumption with the introduction of Jio. Reliance made an early stride in the Indian mobile ecosystem by leveraging the price sensitivity and the potential of user scale. Over the next 2 years, Jio was able to record a user base of 280 Mn[9] as of 2018, making it the number 1 telecom provider in the country. With this breakthrough, 4G in India was able to reach the masses, enabling customers to explore the mobile Internet space. The next wave of innovation is expected to initiate in the middle of 2020 with the launch of 5G in India. The potential of scale, benefits, and India’s readiness for 5G proliferation is still largely theoretical, however, its impact on the mobile ecosystem in the country is much anticipated. While India continues to be among the top markets for content platforms and mobile apps globally, the introduction of 5G is expected to open new avenues in terms of innovation, production, and consumption of online content. 4G User Base in India is Expected to Reach 900 Million By 2022 1 87 238 432 600 710 800 890 2015 2016 2017 2018 4G User Base in India (Million) 2019(p) 2020(p) 2021(p) 2022(p) CAGR (2018-2022) 20% 1Msubscribers milestone in 2015 annual increase from 2016 to 2017 170% of users from rural India in 2018 30% increase in data usage from 2016-2018 25X Source: Zinnov Research Analysis
  10. 10. 10 CHANGING PARADIGM OF CONTENT CONSUMPTION THE PERSONA OF INTERNET USERS 1.3 Internet usage behaviour in India is undergoing a profound transformation with an increasing number of people opting for mobile phones as a preferred device. The consumer survey conducted for 500+ smartphone users across India also revealed that more than 76% of respondents prefer mobile phones for accessing online content over desktop and other devices. The last 5 years have brought about a paradigm change in the persona of Internet users, surfacing unique preferences with respect to internet usage and accessing content online. Purchasing a smartphone has now evolved from being a luxury to more of a necessity with increasing momentum across Tier 3 cities. Moreover, the availability of free content in the form of videos, news, games, and social media is attracting several smartphone users from Tier 2 and Tier 3 cities as well. The following visual summarizes the key findings from the consumer survey, highlighting the evolved persona of internet users in India. Unique preferences are surfacing with the changing persona of Internet users Source: Consumer Survey, Primary Interactions and Zinnov Research Analysis Survey Question Intent Key Insight Facts from Survey Preferred platform for online content consumption Mobile is a preferred platform even in Tier 3 cities, which is evidence of the fact that it is no longer a luxury Tier 1 - 65% Tier 2 - 81% Tier 3 - 80% 80% of the smartphones users check their phone as soon as they wake up Checking phones on waking up Tier 1 - 90% Tier 2 - 81% Tier 3 - 78% Tier 1 - 78% Tier 2 - 75% Tier 3 - 62% Low app retention in Tier 1 and Tier 2 cities. High chances of disabling, if app experience is not relevant Disabling a complicated app Vs willingness to understand it Late night (10 PM onwards) is the most preferred time of the day for video based consumption, particularly among the age group of <25 and 25-35 years Preferred time of the day, for video based content consumption <25 years 25-35 years >35 years 49% 40% 11% 43% 4% 53% 29% 46% 25% Late Night (10PM onwards) Evening (5-10 PM) Rest of the day Shopping through social media platforms is gaining traction across lower income groups, particularly across Tier 2 and Tier 3 cities Preference of shopping through social media platforms 5 to 10 LPA >10 LPA 31% 29% 38% 1 to 5 LPA 40% Working Professionals Students
  11. 11. 02CHANGING PARADIGM OF CONTENT CONSUMPTION
  12. 12. APPROACHING THE MOBILE FIRST UBIQUITY 2.1 12 CHANGING PARADIGM OF CONTENT CONSUMPTION A Day in the Life of A Smartphone User Source: Consumer Survey, Primary Interactions and Zinnov Research Analysis The increasing preference for mobile-first experience is taking a concrete shape as content consumption transforms from TV to videos on-demand through OTT, from newspapers to consolidated news apps, from Play Stations to mobile games, and from offline stores to e-commerce mobile apps. Particularly in rural India, more than 1/3rd of the total population accesses the internet for the first time through their mobile phones, introducing new preferences for mobile-first online content. In urban India, smartphones have already become an integral part of the users’ life with an app available to meet even the most basic needs today. According to the consumer survey, more than 80% of the respondents check their phones as soon as they wake up, either to check updates on social media, to skim through their emails or to analyze their sleep patterns through their smartphone-based sleep tracker apps. Based on the consumer survey responses and analysis, the following image represents a day in a smartphone user’s life. Late Night Uses OTT apps for movies and TV shows 6AM - 9AM >85% of them check emails and social media updates >70% of users check news regularly during the morning hours 9AM - 12PM Engage with music content and food ordering apps 12PM - 4PM Quantity: 01 Coffee Quantity: 00 Pan Cake ORDER OUR RESTAURANT 7PM - 10PM Food and Grocery ordering Educational apps are accessed 4PM - 7PM Users ‘binge watch’ content during commute
  13. 13. Right from ordering food through Swiggy and Zomato to getting a cab at the doorstep through Ola and Uber, consumers are showing a heavy inclination towards using on-demand services. The advent of the on-demand economy in India is also evident from the increasing demand for household and personal grooming services through apps such as UrbanClap and Pick My Laundry. A more recent introduction to the group is the express grocery delivery through apps such as Big Basket and Amazon Prime Now. However, it is the ‘Video-on-demand’ which has witnessed the most accelerated growth in the country. On-demand content for entertainment is inclusive of music and video content platforms driven by subscription-based and advertisement-based business models. While there are a handful of music streaming OTT (Over the top) Service Providers in India, such as Gaana, Amazon Music, and Spotify, the market is currently dominated by video-driven platforms such as Hotstar, Zee5, and Netflix among others. Inspired by quality content and popular web series from the west, the demand for premium content has seen a steep increase in India, which opened doors for International platforms such as Netflix and PrimeVideo, particularly in the urban sectors. However, the overall growth of the market is being attributed to Indian platforms such as Hotstar and Zee5, which are capturing the regional language quotient in the country and have together acquired more than 350Mn subscribers as of 2018. Moreover, the preferred device to consume this content is largely mobile phones, particularly in rural areas, where the share of first-time Internet users is rapidly increasing. Entry of Multiple Companies in the Last Decade is Boosting the On-Demand Economy in India THE ADVENT OF ON-DEMAND ECONOMY 2.2 13 CHANGING PARADIGM OF CONTENT CONSUMPTION Source: Zinnov Research Analysis Travel & Hospitality Food Delivery Healthcare Professional Services E-Commerce Entertainment 2012-132010-11 2014-15 2016-17 2018-19
  14. 14. With multiple platform options available for the users to choose from, the competition is becoming extremely fierce. Retaining online content consumers is particularly becoming challenging. However, the writing is on the wall - consumers today are showing preference for more regional, diverse, and video-based content. SHIFTING CONSUMER DEMAND TOWARDS VERNACULAR,VIDEO-FIRST AND VARIETY FOCUSSED PLATFORMS 2.3 14 CHANGING PARADIGM OF CONTENT CONSUMPTION VIDEO-FIRST VERNACULAR VARIETY The exponential growth of online streaming platforms in India is a testament to the emerging demand for video-heavy mobile content. This shift in online content preference became more pronounced in 2018, with the accelerated growth of user-generated content platforms such as TikTok and curated platforms such as Glance. Such platforms constitute of short-form video content (<2 minutes) and leverage the binge-watching phenomenon. This has just begun gaining traction across India, particularly in Tier 2 and Tier 3 cities. With over 22 languages being spoken across the country, especially by the masses, preference for content in regional languages has increased substantially over the last 5 years. The total English-speaking population in India is roughly 10-12%, which is evidence of the fact that a dominant share of India population is more comfortable consuming content in their regional languages. From end user’s perspective, Youtube, Hotstar, and Zee5 have been the most preferred online streaming platforms for video based regional content followed by text-driven platforms such as Inshorts and Dailyhunt. As per the survey, language preference for mobile content was dominated by vernacular languages like Hindi, Punjabi, Telugu, Tamil, Kannada, and Marathi the survey had a sample bias toward southern, central and north India. Another evolving consumer preference is the availability of variety, which refers to the genre of content that the users can choose from while consuming online content. Music, Entertainment, Lifestyle, Games, Travel, and Sports for instance, are the most preferred content categories in the current scenario. In terms of online content variety, the survey respondents were asked to choose from among 14 content variety options. As per the responses, 7-8 categories including lifestyle, sports, entertainment, gaming etc. were preferred by more than 2/3rd of the respondents, which suggests that consumers seek options of having all the options on a single platform and don’t feel restricted Source: Consumer Survey, Primary Interactions and Zinnov Research Analysis The Emerging Online Content Preferences of 3vs- Video, Vernacular and Variety prefer video based content over text based 68% prefer watching videos of <2 minutes of duration 55% prefer regional languages over Hindi and English 70% opt for platforms which have more variety available >70% 68% 68% 76% Tier 1 Tier 2 Tier 3 61% 74% 93% Tier 1 Tier 2 Tier 3 78% 67% 54% Tier 1 Tier 2 Tier 3 61% 53% 34% Tier 1 Tier 2 Tier 3
  15. 15. The frequency of inappropriate content, incidents of hate speech, and violence on social media platforms has been increasing at an alarming rate in India. Moreover, the circulation of fake news across such platforms, particularly WhatsApp is yet another issue which is becoming a concern for the modern-day mobile users in India. Platforms such as TikTok and Instagram were recently been brought into light for failing content moderation policies and the government had to intervene to enforce more stringent content rules and policies, so that consumers can engage with the app safely. To address these challenges, online content platforms have started leveraging technology, particularly Artificial Intelligence (AI), to identify inappropriate content and immediately flag it to be removed from the platform. TikTok, after its recent ban is said to use AI aggressively for its content moderation. Local platforms like Glance, heavily rely on AI for both content creation and curation. An emerging, yet crucial consumer preference for online content is personalization. During personal interactions with consumers as a part of the survey, more than 30% of the respondents revealed that they prefer recommended content over the option of searching for content. E-commerce platforms have been early initiators of a personalized app experience for users, where they get recommendations based on their past shopping experiences. Content platforms are also now catching up this trend. YouTube and Netflix for example, shows recommendation of new content based on user’s past preferences and platform experience. Even local platforms have now started using advanced data analytics coupled with AI to offer a personalized platform experience to the users. 15 CHANGING PARADIGM OF CONTENT CONSUMPTION PREFERENCE FOR ONLINE CONTENT MODERATION AND PERSONALIZATION ON THE RISE 2.4 Mobile Users Demanding Moderated and Personalized Content Platform Experience Source: Consumer Survey, Primary Interactions and Zinnov Research Analysis 60% prefer professionally generated content over user generated content 36% preferred recommended content over searching for content on online platforms 65% have encountered high frequency of fake news when using social media platforms
  16. 16. 16 CHANGING PARADIGM OF CONTENT CONSUMPTION THE EMERGING DEMAND OF FRICTIONLESS CONTENT EXPERIENCE 2.5 Source: Zinnov Research Analysis As mobile phones gain prevalence, customer delight is becoming the most crucial aspect of long-term engagement with a mobile app. Especially in India, customer delight becomes even more vital as smartphone users have almost 50 apps on an average and only 40-50% of these are used regularly [10]. This usage pattern, which is representative of consumer internet experience on mobile, is limited by friction that limits seamless content consumption on mobile. This friction exists across multiple dimensions: Platforms which can deliver Frictionless Content Experience are more likely to attract a disproportionate number of users and retain them in the long run. Entering the Era of Frictionless Content Experience in India Our survey reveals that consumers are looking for content that is relevant to them, is in their local language, is preferably in video instead of text, is short-form, does not require searching or browsing, and is easily accessible. We call this Frictionless Content Experience. Access Opening the right app or website receiving information seamlessly without any extra effort vs Discovery receiving recommended and curated content Having to browse or search vs Relevance content personalized based on consumer’s interests Generic content vs Language English, which is spoken by only 10-12% of the population local languagevs Format Reading text which requires higher level of cognitive effort watching a videovs Duration short snackable easy to consume information Long format content vs
  17. 17. 03THE DISRUPTION IN CONTENT CREATION AND CURATION
  18. 18. The Current State of Quality Vs Scale of Top Content Platforms in India 18 THE DISRUPTION IN CONTENT CREATION AND CURATION THE ROAD TO ACHIEVING QUALITY AND SCALE PARITY 3.1 f(Daily Active User Estimates) f(ContentModerationLaws,ProfessionallyVs. UserGeneratedContent) Quality Scale Scale First- User Generated Content Quality First- Premium Content Sweet Spot Quality @ Scale Source: Zinnov Research Analysis In a country like India, where all content strategies pivot around scale, consumers are increasingly questioning the quality of content and its moderation. The growth of diverse content platforms on a global level has given rise to the need for striking a balance between the availability of quality content and the scale of users who are consuming it. Companies such as TikTok, Facebook, YouTube, and Instagram have grown because of their Scale-First approach by riding on the massive volume of free content that was provided by their users. But content consumers today, are very discerning. The propagation of fake news on user-generated content platforms is a key concern for the increasing number of consumers. This is leading to greater adoption of platforms that deliver a moderated content experience. Consequently, the shift in consumer preferences has been leveraged by leading OTTs such as Netflix, Prime Video, and Hotstar, who are targeting consumers with their Quality First approach. The way Indian consumers access the internet has transformed at the core. While a decade ago, there was broadband and a PC, today there’s 4G on mobile handsets. It was after 2015 that the internet traffic from mobile started dominating over PC traffic; 4 years later now, mobile internet traffic is ruling the roost in India. Apart from the mobile users propelling the mobile-first to mobile-only transition, the supply side has also been contributing significantly. There has been an overwhelming inflow of mobile apps for e-commerce, gaming, online streaming, and education, and India has become one of the largest consumer-bases that access this content on mobile. This section discusses the key initiatives by the supply side in the ecosystem that enable Frictionless Content Experience, the challenges that are faced by these companies, and the impending disruptive forces that will affect the companies of today and tomorrow. To maximize for both scale and quality, quality-first platforms such as Netflix and Zee5 are aggressively spending on acquiring new users and scaling their subscriber base, while on the other hand, scale-first platforms such as YouTube are investing in original content through premium subscriptions. Local platforms like Glance initiated their journey with a ‘Quality at Scale’ approach wherein they are set up to deliver quality content at scale. The following framework showcases the analysis of the top 15 content platforms in India across different categories. While quality was analyzed based on moderation laws, family-safe content, moderation statistics, and dominance of professionally generated content, the scale was derived as a function of the platform users.
  19. 19. Quality content (curated) Mass content (non-curated) Size of circle denotes relative scale of video content on the platform f( Vernacular Content Options | Vernacular Options for accessing the platform) f(Varietyofcontentavailable) Variety Vernacular L L M M H H Video, Vernacular, and Variety: The 3V Mantra of Winning Indian Mobile Consumers THRIVING ON THE 3V MANTRA- VERNACULAR,VIDEO,AND VARIETY 3.2 19 THE DISRUPTION IN CONTENT CREATION AND CURATION Source: Zinnov Research Analysis The following framework showcases the relative positioning of leading content platforms and their current focus on the 3Vs. Investments in regional start-ups and producing content in regional languages have also surged in India. Indian OTT players have collectively set up a budget of INR 3300 Cr[10] to produce content in Hindi and other regional languages. Moreover, these platforms are attempting to increase the variety of content across their libraries, by adding games and news across their platforms. Zee5 and Hotstar for example also have an option of viewing news in regional languages, while Facebook and Glance have options of gaming for users. Another emerging, yet crucial preference from consumers is the availability of diverse and regional content, preferably in a video-heavy format. As a part of the survey, when consumers were asked about their preferences of mobile content, three common themes emerged - Video, Vernacular, and Variety (3Vs). While non-curated platforms like Facebook and YouTube have been able to leverage the power of user-generated content (UGC) to have a variety of video content at scale, curated OTT platforms like Hotstar and Zee5 have been focusing more on creating vernacular video content, albeit at a relatively lower scale. Also, there’s a lack in the variety of content as compared to Facebook and YouTube. Local players like Glance are looking to bridge this gap by maximizing towards the 3Vs through curated video content.
  20. 20. Quoting Mary Meeker 2019 edition of Internet Trends Report- “Shoppability is increasingly becoming integrated into apps and services of every kind, offline retail is becoming digitised, and ecommerce is reaching new communities and demographics, all through the mobile ecosystem”. The dominant business models in the mobile app ecosystem in India are transaction, advertisements, and subscription. However, there is an upcoming trend of platforms testing waters with combining one or more of the above together, the most common being the intersection of content with commerce. Instagram for example, is one of the most popular content platforms in India. Brands across the country consider the platform as a top priority for digital and Influencer marketing. The platform recently launched the ‘Shop’ widget in India after tasting success in global markets. Local players such as Zee5 and Glance have also introduced the feature of ‘Shop the Look’ on their platforms, following the trend. The following figure shows the current state of popular platforms in the mobile ecosystem and how near they are to actualize the trend as a viable business model. India Catching up with the Trend of Content-Commerce Intersection ADDRESSING THE KEY ASKS OF THE MODERN CONSUMER- PERSONALIZATION AND CUSTOMIZATION 3.3 CHANGING BUSINESS MODELS-CONTENT FOR COMMERCE AND COMMERCE THROUGH CONTENT 3.4 20 THE DISRUPTION IN CONTENT CREATION AND CURATION Source: Zinnov Research Analysis With increasing awareness and global exposure, consumers have started showcasing the propensity to engage with applications that are personalized for them and recommend content based on their preferences. Global giants such as YouTube and Facebook were early to capitalize on personalization and are heavily reliant on using technologies such as Artificial Intelligence and Machine Learning (AI/ML) to give their users content recommendations based on their past experiences and search history. Apart from personalization, global and Indian content platforms are also changing their user acquisition strategy, pivoting around the aspect of customization. For instance, Netflix recently announced the INR 199 monthly plan[11] , only for mobile users in India. Zee5 is also testing mobile-only plans which will be almost 30% cheaper than regular packs. Zee5 offers language specific monthly packs on its platforms. Owing to the mushrooming growth of smartphone among Indian students, Youtube launched an India specific monthly plan for students, charging INR 79 instead of the standard INR129 [12]. As demand for online content from rural India is expected to increase significantly in the next few years, customization will gain more importance. Consequentially, price wars will compel more content platforms to revise subscription plans and offerings based on evolving consumer experiences, both from urban and rural India. Content Platforms Driving Commerce with Content Commerce Platforms
  21. 21. 21 THE DISRUPTION IN CONTENT CREATION AND CURATION INNOVATION IS THE KEY DIFFERENTIATOR FOR THE CONTENT PLATFORMS OF TODAY AND TOMORROW 3.5 Innovation and Consumer First- The Fast Scaling Content Platforms in India Source: Zinnov Research Analysis *Platforms launched in this era were predominantly desktop first. Instagram is an exception Zee5 DAUs include projected value DailyActiveUsers (Million) 5 10 15 20 25 30 # of Months Year of Launch Wave 3 Innovation First Platforms Wave 2 The 4G Boom- Mobile First Platforms Wave 1 First Entrants- Desktop First Platforms* 12 24 36 48 60 YouTube and Facebook were launched in India at a time when traffic from mobile phones for accessing the Internet was less than 10%. However, the influence of the Western market, rising urban population, and the introduction of 4G in India were able to provide the impetus for these platforms to grow exponentially post 2012. Since then, the macro and micro factors governing the mobile ecosystem in India have changed drastically. The key enabler of this growth today is innovation. In 2018, the soaring intensity of competition and the inability to keep pace with the evolving customer preferences, compelled multiple mobile app-based start-ups to shut down. Holachef, Ofo, and Tapzo among others are some of the examples. Innovation is currently being touted as the only differentiator in this consumer-driven market where the shift in preferences is rapid and the demand is largely fragmented. Innovation around business models, consumer experiences, and marketing can help companies stay in the race. Over the last 2 years, India witnessed the entry and growth of multiple innovation-first platforms such as Glance, TikTok, and Helo among others. The following chart represents how content platforms in India have evolved in the last decade to become innovation-first platforms.
  22. 22. During the research for this whitepaper, more than 20 content platforms, both global and local were studied extensively. In India, where global behemoths like Facebook and YouTube continue to be the dominant forces, the growth of local players has been compelling. Glance by InMobi is one such platform which has been registering phenomenal growth since its official launch in 2018, fueled by innovation and a deep understanding of Indian consumers. The following chart illustrates how the growth of global platforms such as Facebook and YouTube began to stagnate, while Glance recorded a 5X growth and acquired 30Mn active users in the last year. The Extraordinary Growth of Innovation-first Platforms 22 THE DISRUPTION IN CONTENT CREATION AND CURATION Global Content Players Indian Content Players IndexedDAUs 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Q3’18 Q4’18 Q1’19 Q2’19 ShareChat Glance Inshorts Dailyhunt Facebook Instagram Youtube TikTok Daily Active Users (DAU) growth - as a multiple of Q3'18 DAUs Growth 5.0X 3.1X 2.7X 2.5X 2.0X 1.4X 1.2X 1.1X Source: Zinnov Research Analysis
  23. 23. 23 THE DISRUPTION IN CONTENT CREATION AND CURATION Glance is an example of a platform delivering Frictionless Content Experience. Referred as Screen Zero by the parent company - InMobi Group, Glance delivers AI-driven personalized content to users on their smartphone lock screens. The following figure represents how Glance enables this experience. Glance’s strategy and tactics, tailor-made for a mobile-only world, hold a few vital lessons for other ecosystem players that are looking to enhance the consumer experience for attracting and retaining users. A UNIQUE COMBINATION OF INNOVATION-FIRST AND CUSTOMER-FIRST APPROACH: CASE IN POINT- GLANCE Glance Enables Frictionless Content Experience Source: Zinnov Research Analysis Seamless Content Discovery- Recommended content-based platform Availability of Vernacular Content-5+ regional language options Ease of Access of Content- Smartphone’s Lock screen Offering Relevant Content-Highly curated and personalized platform Engaging content format-High focus on video-based content Snackable video content-Videos of <2 minute duration Glance’s strategy to partner with smartphone manufacturers enables massive reach and access to existing and next set of internet users across both urban and rural India. The platform’s approach of snackable video content (less than 2 minutes duration) - helps keep its users engaged. In a world of fake news, Glance’s approach of personalized and curated content will help it differentiate itself further. Finally, Glance is pushing the innovation frontier by bringing content and commerce together through its ‘Shop The Look’ feature. Presence on the lock screen as a native feature of the phone enables easy access and discovery of information for consumers without any extra effort. It has built a large and engaged user base on the back of this innovative distribution strategy by focusing on video, vernacular and variety for content. 1 2 3 4 5 6
  24. 24. 04THE ROLE OF ECOSYSTEM LEVERAGE AND COLLABORATION
  25. 25. There are clear signs of increasing collaboration between these ecosystem entities. For example, original content creators having their Youtube channels have started partnering with brands to have their products natively integrated into the content. Marketers have realized the value of branded content and partnering with influencers on platforms like Instagram to create original content created where their brands are featured. Another prime example is how smartphone manufacturers have partnered with Glance to have it integrated as a native feature of the phone. This platform can also be leveraged by both content creators and marketers for reaching out to consumers and in turn will mutually help each other to grow and evolve. 25 THE ROLE OF ECOSYSTEM LEVERAGE AND COLLABORATION The key pain points for select mobile ecosystem entities in India Source: Zinnov Research Analysis OEMS MARKETERS CONTENT PUBLISHERS Industry Stakeholders Viewpoint As mobile internet is becoming prevalent in India, how can we capitalize on this growth remains a key ‘unanswered’ question VP, Product | India’s leading smartphone OEM Everyday we write brilliant pieces of content and everyday we see them going unnoticed among thousands of content pieces online. Getting visibility is increasingly becoming a challenge Sr. Editor | India’s leading new age content publisher Our new products often get lost in the most competitive sector of India, FMCG. Though digital marketing is gaining traction, but to what extent can we reach the masses? Head of Marketing | India’s leading FMCG Brand Ecosystem Entities-Key Pain points Fixed business model-scope to generate revenue ends with product purchase Need of upselling products to existing customers Unable to capitalize on the mobile internet boom in India Low brand discovery Reducing attention span,crowded media space and ad blindness Limited content distribution Decreasing retention of readers on mobile app As a market having the second largest mobile subscriber base globally and on course towards becoming a mobile-only nation, the mobile ecosystem in India provides significant scope for collaboration between different players. During the course of this study we interacted with multiple ecosystem entities, however, significant scope of collaboration emerged prominently for the following ctageories: Content creators - With evolving consumer content preferences, they hold the key to creating the right content that attracts and engages users. At the same time, they also need the right channels to ensure that their content gets the desired visibility and reach. Marketers - With consumers being mobile-first, marketers have increasingly started leveraging mobile as a channel to gain the desired visibility and awareness from their brands. As the ecosystem continues to evolve rapidly, they are always on the lookout for more innovative means for reaching out and engaging with consumers. Smartphone Manufacturers - Traditionally smartphone manufacturers have primarily been on the hardware side in mobile ecosystem and have not actively leveraged the rest of the ecosystem. But there have been recent trends wherein they have started to expand their offerings beyond just the hardware and that creates interesting opportunities for other players. We did a further deep dive with the stakeholders from the above categories and the following challenges emerged:
  26. 26. 05CONCLUSION
  27. 27. 27 CONCLUSION Internet users have a paradox of choice. The volume and variety of content available online is massive, and yet consumers do not get relevant content easily. At the same time, availability and affordability are driving an increase in the number of internet users in India and the number of minutes spent online. The life of Indian citizens, as is the case elsewhere, is increasingly going online - be it shopping, binge-watching video content, playing mobile games, ordering food, booking a cab, or transacting through mobile payment apps. The mobile-only evolution of India is also reflected in changing consumer preferences when it comes to content. There is a latent demand for Frictionless Content Experience which content platforms need to fulfill. But it is not only content platforms that need to adapt to these changes in consumer preferences. Telecom players, smartphone manufacturers, service providers and marketers need to change the way they approach the mobile-only Indian consumer. How will the next 5 years look like for the mobile ecosystem in India? Innovation in discovery and delivery of personalized content Majority of first-time internet users in India will come from Tier 2 and Tier 3 cities. They will be less tech-savvy as compared to the current set of users, so innovation will hold the key in driving content discovery at scale. Personalization of content will be critical as these users prefer good quality recommended content that matches their interests. Video, Vernacular and Variety of content for attracting and retaining users With declining cost of internet access, introduction of 5G, and changing consumer preferences, consumption of video content will continue to grow at a rapid pace. Platforms will go beyond English and invest in creating vernacular content across a spectrum of genres to tap into the diversity of languages and user interests, especially in Tier 2 and 3 cities. Content and commerce will converge to create a dominant monetization mode With content driving reach and consumer engagement, marketers will increasingly ride this wave of content consumption to reach consumers and influence purchase. Content platforms will evolve into transaction platforms by creating user experiences that enable product discovery and seamless purchases of the same.
  28. 28. 28 CONCLUSION REFERENCES 1. https://main.trai.gov.in/sites/default/files/PR_No.22of2019_0.pdf 2. s://cms.iamai.in/Content/ResearchPapers/2b08cce4-e571-4cfe-9f8b-86435a12ed17.pdf 3. https://cms.iamai.in/Content/ResearchPapers/2b08cce4-e571-4cfe-9f8b-86435a12ed17.pdf 4. https://cms.iamai.in/Content/ResearchPapers/2b08cce4-e571-4cfe-9f8b-86435a12ed17.pdf 5. https://www.assocham.org/newsdetail.php?id=7099 6. https://www.statista.com/statistics/467163/forecast-of-smartphone-users-in-india/ 7. https://www.assocham.org/newsdetail.php?id=7099 8. https://twitter.com/DoT_India/status/979344903795826693/photo/1 Department of Telecom Twitted this, and all the articles used… Hencee I gave the link to the twitter handle 9. https://main.trai.gov.in/sites/default/files/PR_No.22of2019_0.pdf 10. https://cms.iamai.in/Content/ResearchPapers/2b08cce4-e571-4cfe-9f8b-86435a12ed17.pdf 11. https://inc42.com/datalab/indias-growing-regional-language-user-base-driving-up- investments-in-ott-streaming-space/ 12. https://techarc.net/techinsight-india-app-engagement-is-on-the-rise/ 13. https://www2.deloitte.com/content/dam/Deloitte/in/Documents/technology-media -telecommunications/in-tmt-predictions-2018-noexp.pdf 14. https://www.netflix.com 15. https://www.youtube.com

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