Why virtual gifts and direct payments have the potential to change the face of entertainment, more than advertising & appearances
Must confess I am bad at sharing my personal diary over the internet. Doing so now to develop a community around media, entertainment and content to connect with others who have something interesting to share.
Past 6 months with Flipchat.me has led me to speak with 1000’s of Indic language speakers in India and this is a first in a series of posts where I will share my learning.
MoneyâââChina shows the way for UGC monetisation
Virtual gifts is a well established business model in China, the industry size being over (425) 525-0497in revenues spread across Momo, Kwai, YY, Inke, Huajiao, Yizhibo, Douyu and Panda.tv.
Credit Suisse stated in its September 17 research report that it believes the Chinese personal live streaming market will be $5 billion in 2018âââ$2 billion less than Chinaâs movie box office receipts and half the size of the countryâs mobile gaming market.
In the US, virtual gifts have been adopted by Livestar, Live.me, Live.ly, Periscope (with their new âsuper-likesâ), YouNow,and Twitch.tv (with the fairly new âbitsâ system).
I would like you to take a moment and thinkâââmost of these companies did not exist 5 years ago and everything that users do on the internet comes at the expense of TV viewership.
Media & Internet landscape inÂ India
Skip if you are well versed with media landscape in India
90% of Indians do not speak or read English whatsoever
Hindi is the most commonly understood language with ~500 million speakers & Less than 1% vernacular content is available for 90% of India
Out of 444 million(Urban Indians) 269 million (60%) is using the Internet. Out of 906 million (Rural Indians) only 163 million (17%) have Internet access. Given ~750 million users have no access to Internet.
Estimates suggest that the internet base will double in next 4â5 years on the back on Jio revolution
8â10 hours of video consumption on FB and Youtube combined in a month (Data is not available for other networks)
6.Content consumption will shift to Internet in a major way and indie content creation will lead the way on back of Camera revolution
6.1 Zee Media content garnered an average of 750 million views per month on YouTube in the last quarter of FY17
6.2 Content production costs for major TV network (ZEE) are 65â70% of the revenue and zee sees production costs as a major risk.
Then there are more engaging forms of entertainment take games, video streaming or social browsing.
So where do we go fromÂ here
Speaking with my VC friends, I realize their is a big concern around Indians creating content and monetisation
Indians creatingÂ content
In the next decade more Indians will create content using commodity smart phone camera and this content will in language that people speak. A fraction of 500 million users when creating content in Hindi will increase the quantity of vernacular content and crowd sourcing quality content will be more viable and cost effective model.
To prove the point
Think of Youtube stars Bhuvan Bhan, BeyouNik, Amit Bhadana, Sherly setia, Dhinchak Pooja and the tribeâââmost of their videos gross several million views over a week.
And then there are likes of Nagma, Disha Madan, Anushka Sen, Avneet Kaur creating some very sticky dance videos on Musically and on LikeâââThere is real and sustained engagement and traction over these platforms.
WhatsApp has launched stories in India and Facebook is launching video in a big way and auto play has become the de-facto standard.
Bigo Like & Live are a runway success on the back of a differentiated product. (I am hearing some very exciting numbers, would love to get details if you have them)
Comedy will be a big category, we all have friends who lighten up the moment and those guys will join the creators club and case in point is the stand up ecosystem that has developed around English speaking urban audience.
There are many more beautiful men &women in India who have talent at par with a lot of main stream actors and celebrities, waiting to be found on the internet. Content production and consumption will be democratized on the back of Internet driving supply chain efficiency.
I see micro payments subscription model coupled with ad revenues from programmatic as major drivers. Brands are not using programmatic just yet but it is only a matter of time before it becomes main stream (see (414) 403-8842)
Case in pointâââ7 of top 10 Ad Spenders in India are FMCG companies and FMCG products are mass products consumed by those who speak Hindi (>~50% India) and other vernacular languages. FMCG companies will benefit from from granular and more emotive targeting leveraging efficiency that programmatic targeting offers.
2. Both Bigo Live and Live.me keep about 60â70% of the revenue that is gifted to the content creators on their platform and it seems that for 1 year in India, they have a lot to show. I have seen more than 50 profiles that have couple of lakhs diamonds (Rs) in earnings every month.
Think of 1% of 100K (1 lakh) subscribers, paying Rs 20 each month to watch specific content that the creator is creating in return for an opportunity to get behind the scenes and personal connect. That is good 15k (5k being the commission) in monthly revenue for one individual and this number multiplied by a 10k comes out to be a decent number (15 crore in disbursements) in revenue stream.
I would love to hear your thoughts on the same. You can find me on email@example.com