MUMBAI: Mobile video on demand (MVOD) could see a boom in the country in a couple of years. What is heartening for the MVOD business is the fact that with just 19 per cent penetration of mobile, close to 70 per cent of video consumption happens on it. The numbers will most definitely see an upward trend, when the remaining 81 per cent of the country, which resides is tier II and III cities, are reached through mobile.

One of the players operating in the VOD space since 2008 is Vuclip, which was launched with the insight that mobile video will be the access point for engagement and entertainment.

The platform, which operates in India, the Middle East, South East Asia and Africa understood the issues of the region before launching. Vuclip knew it had challenges to overcome in a country like India. The platform on the technology front had to deal with two main challenges: multiple bandwidths and multiple screen sizes.

“In a country like India there is no stabilized bandwidth. The consumer here has grown up on television, experiencing great television reception and expecting the same to now be transmitted to mobile,” says Vuclip vice president & global head of advertising sales Meera Chopra.

In order to address the issue, Vuclip came up with dynamic adaptive bitrate streaming module, which enabled translation of video depending on the quality of bandwidth and the screen size at that particular time. “We give un-buffered experience, because we show the content not just depending on the bandwidth, but the screen size as well,” informs Chopra.

Citing that m.vuclip as a product has over the years grown organically, without any marketing around it, Chopra says, “Consumers came to Vuclip because they got a great experience and could collate video content from anywhere on the web.”

On Vuclip, content discovery happens in two ways: firstly through content search on m.vuclip.com, which gives video content from across the web and secondly through its own copyrighted content. “We work with 200 plus content distributors. This includes the likes of Yash Raj Films, Balaji, Sony, Rajshri and Colors among others,” she says.

In India, data is premium and understanding this, Vuclip introduced the download feature to enhance consumer experience.

Price points

Understanding subscribers’ needs and behaviour is key for any company and Vuclip claims to have understood its subscribers well. “People in this business today are struggling to make money out of content subscription, but close to seven million of our subscribers globally are pay,” Chopra informs.

Pointing out that the success of a MVOD platform depends on the way the product is priced, she adds, “One should know how to price the product. If the app can give value for money, consumers will have the app.”   

A VOD platform needs to have several price points to work in an emerging market. In India, for example, the recharge value of prepaid phones is anywhere between Rs 50 - 85. “One needs to work in this bandwidth. If someone is recharging their mobile for Rs 75, they will not subscribe to content worth Rs 50. The pricing of content could start from as low as Rs 5 and go up to Rs 35. For a postpaid customer, it could be a little more,” suggests Chopra.

Chopra is of the opinion that super premium content needs to be paid for. “You cannot have everything free. Subscription revenue is the key. Look at Hulu or Netflix, a majority of their revenue comes from subscription. Advertising revenue will never scale up to subscription revenue,” she says.

Increased competition

India has recently seen the mushrooming of VOD platforms from content creators like Star India, Sony and Colors. “While it didn’t work in the US, India is a different story. Look at e-commerce, there are hundreds of them operating in the country today. In the same way, there can be hundreds of VOD players as well. There is enough and more for everybody. The consumer is ready to experiment and he is price and quality conscious. If you are able to meet these two matrixes, the consumers are ready to pay,” she points out.

Chopra believes that while more players and competition opens up the market, it also tells a trend, which everyone wants to capitalise on. “There will be a lot of people entering the market, but the market will see a lot of consolidation as well,” she opines.

In India, according to Chopra, growth will come from tier II and III cities. “While there will be more players entering the market, the larger challenge will be to retain the consumers on the platform.”

Advertiser benefit from VOD

From an efficiency point of view, VOD is cheaper than TV. “The advertisers are going very intelligently on the platform. Pre-roll and banners are passé. Brands today want to marry their offering with the content, which is something VOD can easily provide,” says Chopra.  

Vuclip for example, created an adventure segment as part of a marketing campaign for a non-cola brand. “We had a lot of adventurous content available on the platform and so we created a section. This became a mini TV channel for the brand, which cannot be done on TV and even if it is done, the price point will be high,” she informs.

The VOD platform did a similar programming capsule for Imperial Blue, wherein the product owned the cricket content available on the platform.

“We now plan to create a Yash Raj movie festival on Vuclip and I feel that any brand, which associates with the content should advertise and own the content,” she says.  

Vuclip currently has an association with close to 150 brands, which includes the likes of Airtel, Tata, Pepsi and Idea among others. “A lot of these advertisers are repeat advertisers. Majority of the business on Vuclip is sustained,” informs Chopra.

A new area that will open up with the expansion of the MVOD market is that brands will start creating content for mobile, which will be different from a TVC. “Advertisers know that the audiences on the two platforms are different,” Chopra says.

Regionalisation of content is another area to explore that has immense potential. According to Vuclip’s Global Video Insights (GVI) survey, though movies and TV shows account for around 80 per cent of the international content consumed on the Vuclip platform, 78 per cent of Vuclip viewers in India have shown preference to watching content in their native language. “Personalisation and localisation is the way forward for Vuclip,” she says.

As of today, mobile advertising constitute not more than seven - eight per cent of the advertisers’ total ad budget and of this, VOD would constitute 15 - 20 per cent. “Looking at the way video is growing, this can go as high as 40 per cent. But brands will not spend on regular campaigns. It will be a play of how well the platform can use the content it has,” informs Chopra.  

Chopra feels that while VOD is growing, advertisers need to grow their advertising pie and not divide the same sum of money to different mediums. “Currently we are fighting for the same money. Advertisers will need to grow their advertising budget, which can then be distributed across all platforms. Only when this happens, will all players be able to co-exist and grow,” concludes Chopra.