#Frames2013: ‘For digital to excel, freemium has to make way for pay’

14 Mar,2013

By A Correspondent

 

The past two years have seen the digital ecosystem in India take off in a big way. Whether for the medium of mobile or web, the fast-paced growth sweeping this medium is making other developing economies around the world sit up and take notice.

 

The session on ‘Digital content consumption: developing a robust paid ecosystem’ on day 2 at FICCI Frames saw panelists discuss the advantages, opportunities and challenges facing the medium. The panelists comprised, Neeraj Roy of Hungama Digital Media, Devraj Sanyal of Universal Music, Manish Agarwal of Reliance Entertainment – Digital, Sidhartha Roy of Hungama Digital and Boaz Ben Yaacov of Catch Media Inc.

 

 

Neeraj Roy

Neeraj Roy, CEO, Hungama Digital Media Enterprise started off by presenting a positive picture of the medium. He said, “India is today the third largest internet market in the world and is likely to be the second largest market with 600 million internet users in the next 3-4 years. The industry is adding about 5-6 million users every month and most of this is largely from the mobile device, especially smartphones that saw about 60 million new users this year. India will also be one of the rare nations that will transition from 2G to 4G this year. In India there was a single ecosystem that was created around the mobile which had got to do with micro-transactions. Unfortunately there are a lot of regulatory hurdles that are impeding the rapid growth of the sector. We are now at the cusp of moving away from voice to data consumption. What the industry needs to do is contemplate ways to develop an ecosystem that will bring in robust growth and provide an impetus for the industry to move forward swiftly.”

 

Devraj Sanyal, MD, Universal Music said that it was exciting to see three ecosystems in digital co-existing well with each other. “It rarely can be seen in other parts of the world. For me, the death of voice is the beginning of a much bigger phenomenon – data. The entire future will ride on data. In a country as diverse as India there are two kinds of consumers – the first being pay consumers who are very few in number and the other kind of consumers being those who will pay for nothing and want everything free. As a content creator, I want to see a lot of this ecosystem thriving on the pay model. For me, having 1 million paid viewers is much more valuable than having 500 million viewers who are fence-sitters/pirates. The future will be pay along with value-added services.”

 

Manish Agarwal

Manish Agarwal, CEO, Reliance Digital said, “There’s no doubt on the huge impact that mobile will have on our lives. It is a device of the future and will be accessed for a host of things including content, gaming, etc. The market is very appealing and has just about taken off. I travel a lot around the world and have often heard things like if there are 20 million mobile users in Japan and if that economy is where it is today on that medium, imagine what potential the Indian market has which has more than 600 million mobile users and counting. While there is no doubt on the loyalty on behalf of the customer, we have to see how the medium will benefit the business across the formats that they will operate in.”

 

According to Boaz Yaacov, CTO & Co-founder of Catch Media Inc, “The question we need to ask ourselves is whether we are still living in a world where a customer pays a dollar for a song when there are others who get it from Bit-torrent or even a youtube for free. If we are to sustain the technology or content we need to find practical solutions. We all know how the business of credit cards started about three decades ago and how they charged micropayments to give convenience and access to our money. Today one such player – Visa, is worth about $ 250 billion but the point is that we consumers do not know of these payments.” Adding further Boaz said, “What we are trying to do is build technologies to give people very convenient and mobile way to access their content. If we are able to deliver content to consumers where they are and at their convenience they won’t mind paying for it.”

 

The panel went on to discuss the challenges confronting the medium and also how ‘pay’ would be a preferred model in the future compared to the model of ‘freemium’ that is currently what the players are taking a preference to.

 

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