Consumption story (based on unique multi modal growth) continues the upward trajectory with higher user engagement.
Coming year will be pivotal for the industry as it seeks to stay the course to increase returns for all stakeholders in a potentially uncertain environment.
Boston Consulting Group (BCG) and Confederation of Indian Industry (CII) today released a report, ‘The trillion (and growing) touchpoint story – recognizing the monetization conundrum’. The report seeks to build on last year’s publication and highlights that India’s unique multi modal growth continues to play out.
Sudhanshu Vats, Chairman, CII National Committee on Media & Entertainment and Group CEO and Managing Director, Viacom18 Media Pvt. Ltd., India said, “India is one of the unique markets, where nearly all forms of media consumption are growing. However, true disruption is being seen in digital video, which has grown at a staggering 46% CAGR over the past two years”. This pattern of growth suggests that the trillion touchpoints will only increase in the future.
According to the report, the average Indian’s digital video consumption has grown 2x in the past two years, on the back of surging smartphone adoption and ubiquitous low-cost high-speed mobile internet, coupled with industry’s initiatives. The industry has invested significantly into making the experience a customer centric one – right from relevant content in the form of micro genres all the way up to different formats while ensuring easy availability. “The Indian consumer is becoming increasingly engaged with the stories being told. This is evident, given we are witnessing a rise in both, the number of sessions as well as the time spent per session. Content creation is increasingly leveraging the science of data to complement the art of storytelling”, explains Kanchan Samtani, Managing Director & Partner, Boston Consulting Group India.
This investment and experience is being recognized by consumers as well, who are increasingly subscribing to these digital applications. “The fundamental drivers of value for consumers are inherently different, ranging from an expansive breadth of content to just easier access”, observed Karishma Bhalla, Managing Director & Partner, Boston Consulting Group India. She added, “The SVOD base is truly democratized, having moved beyond the traditional 3M’s (metro, male & millennials). The digital age of a consumer plays a far more pronounced role in SVOD adoption once the initial trials are induced”. The report further goes on to suggest that spend on media is expected to follow the “lipstick effect”, with the spends remaining constant or even increasing in challenged environments.
The report also sheds light on perspectives of leading advertisers, who continue to believe in digital as a medium given its inherent advantages. Mandeep Kohli, Partner, Boston Consulting Group India elaborates, “While there are some all-pervasive advantages like sharper targeting etc., digital has a unique proposition for industries like FMCG, Auto & BFSI which require a deeper understanding of consumer intent and behavior at specific moments. This kind of psychometric targeting approach is made possible by the tracking of consumers online and offline activities ensuring a higher return on marketing investment for the advertisers”. The report also highlights some of the questions on effectiveness and efficacy, which the industry should look to address quickly.
Mr. Vats highlighted the call for action “There is a tremendous opportunity for our industry to reimagine itself yet again and reinforce our leadership position. We must look to translate the trillion touchpoints into a more sustainable and value accretive proposition for all stakeholders. We hope that this report helps create a dialogue on the imperatives for the same.”
Executive Summary
India continues its unique multi-modal growth pattern with video as the growth driver over the last 2-3 years. While TV has grown organically, digital video consumption has almost doubled in the past two years. All indicators suggest that this growth will continue and the trillion touchpoints will only increase in the near
future. The demand side story is led by India’s favorable demographics, surge in smartphone adoption coupled with ubiquitous low cost mobile internet. On the supply side, the exponential growth of players investing heavily into driving a truly customer centric experience (relevant content, affordable pricing, easy payment options, customized formats, among others) has not only driven the growth but set the benchmark for a truly enriching experience.
This experience is visible in the form of the ever increasing engagement levels both in terms of # sessions and time per session. The high levels of engagement are starting to address the issue of monetization which traditionally has been the proverbial elephant in the room. Consumers are increasingly looking to move beyond trials but the funnel flow is still small compared to the large scale investments being made by players to both acquire and retain consumers. Our consumer research suggests that the path being taken is the right one as users proclaim high stickiness and tendency to pay with the spend on media expected to follow the “lipstick effect” even in challenged environments. Advertisers also fundamentally continue to believe in the medium but with an uncertain economic environment looming up ahead, they do want to the industry to quickly fix some of the inherent issues like transparent measurement of ROMI (return on marketing investment).
The coming year will be a pivotal one for the industry, as it looks balance the imperative of growth and helping translate the trillion (and growing) touchpoints into a more sustainable & value accretive proposition for all the stakeholders. This is not an easy task and will require deep introspection and high levels of innovation. Success however will again re-iterate the industry’s position as a leader willing to always disrupt itself, showing the path towards a more sustainable future even in uncertain times.