FICCI-KPMG-Report-13-FRAMES

“
With brand advertising gathering
momentum in digital, creating real
engagement with users is imperative.
Content is slated to play a larger role
in creating meaningful experiences.
Innovations like branded content offer a
great opportunity for brands to not just
reach, but also engage deeply with their
audience – and are in turn significant
monetization opportunities for the platform
provider.
“
- Nitin Mathur
Sr. Director and Head of Marketing
(India & South-east Asia), Yahoo!
Direct user payments for content
Over the past few years, user payments on digital
platforms in India have been largely limited to on deck
sales on mobile feature phones. However, this model has
its limitations. The high revenue share charged by mobile
operators makes it prohibitive for content owners. Further,
the on-deck model has its limitations in terms of the kind of
content that can be pushed through, and is typically limited
to content such as games, caller tunes, wall papers etc.
Finally, with the increasing proliferation of smartphones,
the on-deck user base is becoming small and less relevant.
Globally, there have been successful models of generating content payments on
digital platforms as outlined below:
Sector Leading Players Digital Sales
Penetration
Willingness to
Pay
Success factors
E-books
Newspapers/
Magazines
Source: KPMG in India analysis
Amazon Kindle,
iTunes, Barnes &
Noble
Financial Times,
Wall Street Journal,
New York Times
In India, these off-deck platforms are still relatively new
and immature. However as some of the structural issues
around content portability, micro payment platforms, IP,
MEDIUM HIGH • Creation of reading experience similar to
physical
• Integrated device and content ecosystem
• Aggressive pricing
LOW LOW • Higher willingness to pay for tablet
editions
• ‘Freemium’ model starting to work for
some players, particularly those with
differentiated content
Music iTunes, Amazon HIGH HIGH • Single songs at low price point
• Quick search and check out facility
• Micropayments
Video on Demand
NetFlix, Hulu,
Amazon Instant
Video
LOW HIGH • Large content library; low cost content
• Subscription model
• Aggressive pricing compared to Cable
penetration and ease of use get sorted out, the potential
for the industry to generate revenue is far greater than the
current ad spend in digital
© 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.