FICCI Frames 2008: Waiting for the real media convergence to begin

Digital has been the toast in recent years. FICCI Frames 2008, too, has planned several discussions and seminars around this growing medium.

The advertising industry is experiencing a paradigm shift with digital platforms enabling companies to reach the critical mass. This had resulted in consumers shifting from passive mediums to spending more time on digitally interactive mediums. According to the FICCI-PricewaterhouseCoopers’ report on Indian Entertainment and Media Industry 2008, Internet and mobile are two keys enablers for the same and the medium is estimated at Rs 4.2 billion in 2008, growing at 32 per cent CAGR. The report also states that the medium is expected to touch Rs 11 billion in 2012.

The story in 2007

Continuing with the trend of the previous years, the emergence of media conglomerates further intensified in 2007 with several media groups expanding beyond their traditional domains to leverage on the synergies of advertising, thus aiming to have a presence across all segments of the Indian entertainment and media (E&M) industry.

The year also saw a continuation in the trend towards increased convergence between the E&M industry and the telecom industry. The most notable of these trends were witnessed in the mobile music segment. Other digital initiatives included newspaper industry going online with e-papers and mobile with m-papers. Digital cinema continued to make significant progress in the filmed industry, which also saw a rise in online and mobile ticketing sales. Also, most television broadcasters today have foraying into online and mobile portals.

The FICCI-PWC report also notes that globally, the migration to digital formats is accelerating and this trend is likely to emerge in India too. It further states that distribution of entertainment and media content over digital and mobile platforms—online digital streaming, digital movie/TV downloads, video-on-demand, music downloaded from the Internet, music downloaded to wireless phones, online advertising, online video games, wireless video games, and online gaming is like to rise significantly in the next five years.

Newer advertising opportunities and problems created

Speaking about some of the newer advertising opportunities thrown open by the digital wave and its leveraging by advertisers in the year, Neville Taraporewalla, CEO and Online Media Director (Asia-Pacific), Publicitas Digital, observed that “with around 50 per cent of India’s population under the age of 35, I believe that the explosion of the digital media is here to stay”. He believes that marketers are realising that there is clearly a ‘shared’ shift in some demographics of the audience to the web.

“Advertiser’s are chasing the audience and online publishers seem to be compromising by following extremely poor standardisation of the ad units on their websites. It’s ‘incest’ out there in the online world on some sites and that saddens me tremendously because advertisers seem to miss the one big point, that by merely advertising within clusters of other online advertisements not only reduces their Share of Voice (SOV) on those pages, but also reduces their ROI from day one by not leveraging the power of this new medium in other forms which provides great branding and engagement options,” he explained.

Sharing an online gaming company’s view on the year gone by, Rohit Sharma, COO, Zapak Digital Entertainment, observed, “In 2007, almost 30 per cent of our revenues came from these two innovations and we believe they will grow to 50 per cent next year. Therefore, a lot of brands used these innovations to either create a game around their brand or place a brand inside the game. We believe this to be the most effective and comprehensive way of integrating brand communication with online content. This also resulted in a large number of non-Internet advertisers to start using the online media, especially FMCGs.”

Animation is another sector that is slated to get a lot of attention at FICCI Frames 2008. Arguably, one of the fastest growing amongst the Indian digital space, animation has made a definite mark in the past couple of years with noticeable quality content being generated from the Indian market. Noting the newer opportunities thrown open by the digital wave, Pankaj Kedia, Regional Manager, Systems - China, India & South East Asia, Autodesk Media and Entertainment, pointed out, “It is offering additional distribution avenues for advertising and is also making an impact in the production of ads. There has been increased usage of visual effects and animation in today’s leading ads. The purpose of an advertisement is usually to capture the viewers’ attention, create recall and covey the right message. Digital technology today is providing new ways and tools to the content creator to create visuals, which help achieve the objective more effectively and efficiently.”

Media convergences

Talking about convergence in the gaming sector, Kedia said, “I do believe that there is a huge convergence between mobile and online space from a gaming point of view. Similar kind of gaming content will be delivered over different devices like PCs, mobile phones, and television, requiring some customisation. Therefore, media convergence will be big in the digital era.”

Noting that the meaning of convergence had changed in 2008, Taraporewalla said, “I have heard of ‘Convergence’ since 2000, but I don’t think that any level of convergence is really happening on the ground, at least in India. Yes, the 3-4 screens formula all rolled into one is good for a conference presentation, but the ground realities in India are different. In fact, convergence is a heavily used word, which originally referred to the ever increasing closeness of telecommunications, broadcasting and IT industries. There are regulatory imperatives about how the structures would perform, etc. In developed countries, even though they are closely operating in most countries, there is no firm regulation in place even though there have been certainly effective discussions on the same.”

Challenges

“The industry will need a vast talent pool of creative professionals to meet the growing demand of digital technology. It is imperative for the Government and universities to take the onus of fostering education in the field of digital technology. This could be either through tie-ups with educational institutions or even through a structured approach to training freshers who join the company,” Kedia pointed out.

Agreeing with him, Zapak Digital’s Sharma also observed that, “As clichéd as it may sound, broadband penetration and PC penetration are still the biggest challenges for the growth of this medium. The other challenge is that most of the existing players have not invested in the right content. We have managed to achieve 4 million users because of our strong focus on getting world-class content for the consumers. I believe that the whole gaming eco-system in the country has to work towards providing high quality world class content.”

Taraporewalla lists four major challenges facing the digital industry in the country. “We need much higher PC penetration than the current 4 -5 million that we have. Price of the chip did come down, but we need to get the price of the computer to the price of an average GPRS mobile phone. Secondly, broadband penetration has to increase dramatically to accelerate the growth. Some public-private partnerships have seen that grow, but certainly not as expected. Another point is the need for education on the positive benefits of the new medium. These need to be taken up by industry bodies to ensure the positive effects of the new medium. Finally, it’s talent. In India we have limited talent, which is restricting the fast growth of this medium. No professional courses for digital media are easily available nor are their certified by the universities or the Government. How many young graduates know what careers there are that they can opt for in the New Media space other than a choice for his much dreamed MBA?” he asked.

The way forward

Talking about the future of the animation industry, Kedia said, “Digital technology has seen significant growth in countries like India and China, and provides ways to reach out to new audiences and has also improved the distribution returns. The animation space has witnessed massive growth and is now becoming mainstream in filmed entertainment and television broadcast. The Indian animation industry, which is at the centrestage of the global animation boom, is expected to reach $869 million by 2010, representing a CAGR of 25 per cent over 2006-10.”

“We are in the midst of a revolution in the digital cinema, HD and animation space and events like FICCI Frames will further strengthen this change and progress,” he added.

“There are many moving parts in convergence, but they will fall in place in the Indian market. I would expect them to operate separately for a while before they all reach a threshold for the actual Media Convergence to take place. It is good to have these parts for it to be finally put together as the market matures,” Taraporewalla further said.

The varied discussions covering the broad medium, with its numerous sessions and speakers are sure to raise many more points and answer few of them too.