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A Feud In The Making!

2018 will go down as the year in which data access and consumption see rapid growth, and digital media gains ground in tier 2 & 3 cities and rural areas. This will set off a structural shift as lines between various players across the value chain are blurring with technology, media, and telecom convergence starting to become a reality.

This convergence is giving rise to media ecosystems that are trying to build presence across the entire value chain, whether it is building a relationship with the end consumer, controlling the pipe that delivers content, or taking charge of the content itself. The broadcast industry now has to embrace business models that are likely to help them stay relevant in this age of ecosystems. Traditional ways of generating revenue is no longer optimum. A recent KPMG report, Media Ecosystems, The Walls Fall Down presents a thorough study on this.

A handful of traditional media companies have started to build out direct-to-consumer platforms. Their focus is shifting toward subscription-based models, especially around digital media, which lends itself to better monetization opportunities over the long run. Moving forward, it would be prudent to develop Augmented Reality and Virtual Reality technologies, that may have wider implications in animation, VFX, and gaming segments, the segments seeing maximum growth. The focus on local IPs across the media industry is an important aspect of growth.

Telecom operators are aggregating content across traditional television and video apps, and forming alliances with media companies across the value chain. They are seeing their roles morph into that of complete consumption ecosystem providers. RJio is a case in point. In 2017-18, the telco increased its stake in Vaicom18, acquired a 5 percent stake in Eros Limited, invested in Saavn Media, made an agreement with Whistling Woods International to develop a lab dedicated to virtual and augmented reality content, and very recently acquired controlling stakes in DEN Networks and Hathway Cable & Datacom.

As business models converge, with TV broadcasters focusing on OTT subscription revenues and telcos creating differentiation through content offerings, there seems to be a feud brewing ahead!

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