Home & Office

IT firms increase focus on Indian media

Market opportunities driven by digital evolution has technology vendors raring to offer products and services targeted at India's media and entertainment companies.
Written by Swati Prasad, Contributor

news analysis Disruptive technologies are fast changing the dynamics of India's media and entertainment industry, making it a high-growth vertical for IT companies.

The media and entertainment (M&E) industry is one of the fastest-growing industries in the country. However, as the digital space shrouds the media environment, existing marketing agenda and capabilities of M&E companies need to be retooled.

This poses a huge opportunity for the IT industry and companies including IBM, Cisco Systems, HCL Technologies and Oracle, are cashing in by unveiling new offerings for the Indian media sector.

With the emergence of new technologies ranging from interactive television, blogs, Internet Protocol television (IPTV), social networking sites, e-polls and mobile TV, media houses are compelled to look beyond one-way communication.

"Most of the M&E companies are working toward providing consumers with an interactive experience instead of one-way communication," Chandan Mendiratta, vice president of service provider and system engineering at Cisco India and SAARC, said in an e-mail interview.

M&E companies are also looking to enhance operational efficiencies.

"In India, media houses are increasingly adopting IT to improve efficiencies and streamline operations in the light of their expansion plans," Surya Bhardwaj, Oracle's vice president of India applications, said in an e-mail. Amar Ujala, the country's fourth largest daily newspaper group, recently implemented Oracle ERP applications to speed up deployments of its new print locations.

Platform-neutral content rules
Convergence is also driving the need for better content.

"The same news article can be read on the computer, the mobile phone and in the newspaper so media companies can't afford to go wrong with the content," Madhusudan Gupta, senior research analyst at Gartner, told ZDNet Asia in a phone interview.

In India, wired Internet household penetration has increased to 7.1 percent and readers have started moving online, forcing the publishing industry to change rapidly.

"Worldwide, the Internet has replaced newspaper as the most preferred media in terms of gathering news and background information. And India is no different," Karan Puri, HCL's senior vice president and global vertical head of telecom, media and entertainment, said in an email.

According to Puri, print media today faces a whole host of challenges such as creating platform-neutral content to tackle convergence issues, real-time mapping of reading habits and preferences to enable the delivery of personalized information, lack of standardization across devices and channels, and the massive amount of newspaper archives that needs to be digitalized.

"Major newspaper organizations in India have evolved from being print-centric to having a more diversified portfolio, including Web, mobile, television and radio," Puri said.

But, Gupta believes that print media still has a future in India. "The market dynamics in India are very different from those in the developed world," Gupta said. "With a low newspaper and Internet penetration, newspapers won't go away in haste."

According to a recent report by KPMG, only 23 or 24 percent of the country's population reads a newspaper. It predicts the local print media will grow at 9 percent to generate annual revenues of some US$7.7 billion by 2013.

"But, with newer technologies, even if print does not die, its business model will have to go through a major transition," Kanwaldeep S. Kalsi, IBM's India and South Asia general manager of media and entertainment, said in an e-mail.

Rising power of Web 2.0
M&E companies also need to leverage Web 2.0 capabilities to embed third-party social networks, blogs, RSS feeds, instant messaging and other Web services directly into their business processes.

In particular, there is significant potential in social networking. Gartner's Gupta said: "Social networks help M&E companies develop communities of consumers that are a readymade base for advertisers."

These sites operate under an autonomous business model, in which members serve dual roles--as suppliers and consumers of content. In such autonomous business models, revenue is typically generated through advertisements.

There are also opportunities for subscription-based revenue when membership and content levels are sufficiently high. Puri explained: "Web 2.0 communities can also be used for new product feedback, shortening the product development time and targeting valuable marketing resources."

He added that these social networks are able to drive traffic to the media company's Web site, as well as hold discussions and give suggestions through Internet polls, comments and blogs. "Social networking sites and blogs are great means of brand building," Puri said.

Several IT companies including Oracle, IBM and HCL, have developed tools for Web 2.0. HCL's Content 2.0, for instance, is a network-publishing platform, while Oracle Social CRM applications encompass Web 2.0 features.

Digital TV boom
With new technologies such as IPTV, direct-to-home (DTH), interactive television and digitalization, the broadcast environment is also increasingly challenging. Some 70 million Indian homes have cable and satellite (C&S) TV, while 13 million homes have DTH. IPTV is still new to India and its penetration almost negligible.

"Digital distribution platforms such as DTH are transforming the industry," Kalsi said, noting that DTH players have introduced digital video recorders that free consumers from having to watch television based on broadcaster-ordained timetables. "This is ushering in a new phase of TV viewing," he said.

In July 2008, the Telecom Regulatory Authority of India (TRAI) set a five-year timeframe for cable TV operators to upgrade their current analogue network to digital transmission mode, in order to compete with new distribution platforms such as IPTV and Headend in the Sky.IT vendors such as HCL and Oracle, have again emerged with products touted to enable operators to convert to digital transmission.

Another growth area is mobile TV, which is still at a nascent stage but poised to grow big with the advent of 3G. This, too, will unleash several opportunities for the M&E industry.

According to the TRAI, 38 million people in India use Internet services via their mobile phones. When 3G is available, this figure is expected to rise further. The Internet and Mobile Association of India estimated that value-added mobile services will drive revenues for the telecom industry to US$2 billion by June-2009 and US$3.4 billion by June-2010.

Swati Prasad is a freelance IT writer based in India.

Editorial standards