Rajiv Vaidya, CEO of Spuul tells Vinita Bhatia a paradigm shift is underway in the Indian TV industry as viewers gradually move away from linear TV to online …
Rajiv Vaidya, CEO of Spuul tells Vinita Bhatia a paradigm shift is underway in the Indian TV industry as viewers gradually move away from linear TV to online video streaming. He explains why he over time video on demand would take a much larger share of the entertainment and information market slice.
Is the Indian audience slowing shifting from linear TV to on-demand viewing?
In the US there is already talk of cord cutting; a euphemism for cable TV. The single most reason for that is mobility where people want entertainment anytime, anywhere. That explains the popularity of video on demand (VOD) in the US, where viewers have started watching it on à la carte basis.
In India, most households are one TV-homes dominated by one person in the family, where everyone watches what that person wants. Suddenly that person has a smartphone, which is a multifunctional device and is also the new TV. It gives credence to the fact that 90% of our viewing happens on the mobile phone.
So I think there is a paradigm shift from watching TV as and when programs were slotted to when one wanted. I don’t know when it is going to happen. But definitely over time VOD would take a much larger share of the entertainment and information slice.
Besides viewer sentiments, what will be the other drivers for this shift?
One of the reasons driving this shift will be mobility. Right now 3G acts like 2G. But going forward, the infrastructure will be there; there is no question about it.
Majority of Indians still use feature phones rather than smartphones. Add to that, telecom operators are been slow on the uptake when it comes to making investment-intensive network infrastructure upgrade needed for content-rich services to propel this shift. Will this not affect the evolution?
I agree that these challenges exist and I admit that this evolution will happen eventually. It depends on the rate of smartphone penetration and the speed at which the infrastructure is scaled up. But give another few years and definitely, smartphone penetration will definitely that of exceed feature phones.
How have you ensured that your site is optimised to deal with these data challenges?
Since we are a Singapore-based company, we invested heavily in technology. In fact, we started movie downloads two years before YouTube started advertising it. This is because we realised that people would not be able to watch the entire movie.
So we had progressive download that means you are downloading as you are watching and streaming. We also had timely downloads where each and every film could be condensed, rendered into 70 to 80MB size.
We also built in intuitive adaptive technology so our system knew where you are and what kind of network you are on. For instance, if you are on 3G we lower the streaming rate on your digital device but you will not be able to make out the difference.
All these helped enhance the user experience, so while ads are there on the content it does not interfere overall. Our focus very clearly is subscription. But as I see it very clearly, over a period of time, the ad support and subscription ratio could vary.
How do you go about creating content for the Indian consumers?
We use rigorous data analytics that examines our user habits – what are they watching, when are they watching, what time are they watching, how long are they watching. All this information is used to developed algorithms to understand viewership habits.
We therefore do not have 5000 movies sitting in our catalogue just to get bragging rights. We know very clearly what our consumers want. We monitor them clearly, we buy content accordingly. That is crux of our content acquisition strategy.
Can you explain your revenue model?
We have a premium module. So if we have around 1000 movies, our viewers can watch 600 of these for free, which are slightly older movies. Another 350 movies are for premium viewers and the balance are for pay-for-view users for they are very new movies and the content has to be behind the pay wall.
So if I am a paying subscriber and a premium user, I can watch all 950 movies ad free. But if I am not paying subscriber, then I can 600 movies with ad support.
We have deliberately kept good consumer experience in that we have not kept any ads or banners on our website or app. We have very few ads and we do not have a pre-roll on the movies, because it takes away from the viewing and also keeping the low bandwidth issues in India. As the infrastructure improves, we will throw ads accordingly.
Spuul had plans to create exclusive content. How do you propose to go about doing this?
We are very open to creating content and the nature of the content will be determined by what our customers will want. Currently, TV channels commission production houses to create content, which can run into several episodes for a specific cost per episode, while years ago the production companies had to fit in the stories within 13 episodes.
In the OTT space, everyone is trying to figure out what is the kind of content that users will like and then it might settle down into a pattern. Or then again, it might not – nothing is unclear. Some user might want to binge watch 8 episodes at a go, while another might want to watch no more than 20 minutes at a time. Everyone is making web content, let’s see what works and what does not.
We have evaluated a lot of content, met a lot of producers, deliberated on what to create – we are now considering where, when and how much to invest. Content is the function of capital; if you spend more money, you get more content. What is important is whether at the end of the day, is the consumer happy. And that is what we are concentrating on – on giving the consumer a good experience. That is why giving him the content he wants, backed by the right technology.
What are the plans for Spuul going forward?
Things are looking good for us. We are probably the only OTT player in India right now that is cash positive. We are making money, growing 10% – 15% every month. There is a huge market out there and we welcome Netflix. They are going to help expand the market by getting the media to talk about the OTT space and making people aware of it, so that they shift to on-demand watching.