India, Smartphones and The Burgeoning Era of Mobile Content
India has emerged as a Global Leader in percentage of web traffic from Mobile
As of today, more than 450 Million Indians have an internet enabled phone. India added more than 300 Million internet users only in the last 5 years. A whopping ~80% of the web traffic comes from mobile. This is much more than USA (~38%) and UK (~35%) combined.
Indians have leapfrogged many stages of the internet journey. Many Indians have never used a desktop to access the internet.
I still remember the sound of the dial up modem back in 2000s which promptly connected me to Yahoo messenger and the yellow smiling mascot lit up my day. Most new mobile-internet users have never heard of Yahoo. The basics of UI/UX design (Add to Cart, Checkout, hamburger menu etc.) don't come intuitively to them. Anyway, that's a story for another day.
How did we come to 80% mobile internet penetration in just 5 years?
Mobile internet adoption has grown more than 50% year-on-year since 2011. Many factors have contributed to the steep increase –
- Rapid decrease in cost of feature phones and smart devices (entry of Chinese manufacturers in India : Xiaomi, Vovo, Oppo etc.)
- Sharp decline in cost of high speed internet (entry of Reliance Jio and price wars with incumbents)
- The 'Indian aspirational mindset’ and rapid adoption of feature phones and smart devices
- Attractive mobile purchase schemes (installment, big-billion day sales, e-commerce price wars for market share etc.)
- Continued investment in Digital initiatives by the government of India (JanDhan, Digital India, Startup India, Aadhar, EKYC, UPI, Bhim etc.)
But what does an Average Indian do with mobile internet?
An average Indian spends ~100 minutes a day on internet on his mobile. The most amount of time (~ 45 minutes) is spent on Entertainment (portals related to watching/streaming videos, listening to songs, image galleries).
It's an Era of Mobile Content
The strong demand for Online Entertainment is an indicator of a space waiting to heat up. Calculating the market opportunity on the back of an envelop -
Conservatively: Assume Rs 120 OR $2/month/user spend on Entertainment and 500 Million mobile internet Indians by 2022.
Assuming a 30% market share for the market leader (practically, it will be more than this as this is a winner-takes-it all space), this translates to an opportunity of 3.5 Billion dollars annually for a single player.
Recent entry of Netflix, Hotstar, Jio TV, Netflix, Amazon Prime Video, AltBalaji and VOOT confirms the presence of a race that has begun. Gone are the days of scripted long form dramas served in traditional settings. India is going to be a green field for mobile content served to existing and growing ‘mobile-internet entertainment-heavy’ population that I would like to call em-Gen. Currently, Facebook and YouTube account for 47 percent and 42 percent of overall videos watched online, respectively. The remaining 11 percent belong to the other Over the Top (OTT) service providers.
7 predictions for the Mobile Content space dominated by em-Gen
1. Content made for mobile and sharable through social networks will reign. Mobile first, everything else later
2. Vernacular will gain popularity, short-form content (<20 min episodes) will tip long-form and Comedy will be the most popular genre.
3. Homegrown channels (AIB, TVF, MissMalini etc.) will capture mind and market share( AIB has 2.6 Mn subscribers on youtube, TVF has 2.7 Mn subscribers on youtube and 3 Mn App downloads)
4. Given the cricket frenzy in India, OTT content providers who stream live sports will be more popular
Hotstar has had a head-start over other OTTs for this single biggest reason. It features in top 10 Apps downloaded in India and has fully leveraged first mover advantage from Cricket World Cup 2015.
5. It will be difficult for Netflix to capture market share beyond the metros unless
it introduces local content, reduces subscription fee (current ~Rs 500/ month) and optimizes for mobile. Amazon prime video (current ~Rs 50/month) has moved quickly in this direction. It has local content and is much cheaper than market leader Hotstar (current ~Rs 190/month).
6. As the battle for mobile content intensifies, early movers in the the Mobile Content industry will have a formidable competitive advantage
This includes Content Providers (Creators, Aggregators and Publishers), Technology enablers (App developers, OEMs, Payment Gateways, Analytics, Content Management Platforms) and M-commerce, Ad exchanges/ Networks.
7. The biggest challenge to the industry will be Content theft and Piracy
Many people watch pirated content (which is shared offline through platforms like ShareIt; 3rd most downloaded App in India 2017). We will see all stakeholders working tightly together with Central and State governments to introduce stricter anti-piracy laws and punishment (virtually in-existent in India today).
To sum it up, Mobile content is booming.
Someone will win the battle. Will it be Hotstar, Netflix or Amazon Prime Video?
Or with ALTBalaji, will it be another golden decade for Ekta Kapoor?
References : Mary Meeker Internet Trends 2017 report; https://money.cnn.com/2017/09/26/technology/india-mobile-congress-market-numbers/index.html; https://www.bgr.in/news/10-emerging-trends-from-indias-online-video-consumption-boo; https://www.thenewsminute.com/article/indian-films-gross-2-billion-piracy-makes-35-more-48603; https://www.e-intelligence.in/blog/latest-interactive-infographic-the-state-of-digital-in-india/
Director of Product and Design @ FalconX | Fintech | Crypto | Gen AI | FRM
7 年I think VR is the next big wave we should brace for. Hardware penetration of VR devices is growing and Interactive content incorporation VR has huge waiting user base in India.
India @ ABC Impact (Temasek Trust) - focused on Financial Services, Health, Agri, Climate and Education.
7 年With growing ease of content creation, user generated content is rising significantly and could potentially give way to content licensing opportunities.
LegalWiz.in | Hire4Higher Consulting
7 年Nice read! It will be interesting to see how digital commerce will cope up with the trend being so much mobile heavy. As for most products, mobile traffic prove to be more challenging to manage in terms of conversions and ROI, future of Indian digital commerce seems much heavily demanding of better UIUX, best practices around building mobile friendly technologies, and engaging content for on-the-go generation.
Building Cleartrip
7 年Very well articulated Juhi. I think with Internet content devices like Firestick / Chromecast etc. big screen viewing will balance mobile content. Majority of content is still watched on TV, and cheap internet + devices may just be another trend to watch out for.