Mobile Entertainment

Within hours of touching down for the FICCI Frames entertainment expo in March, it was confirmed that the local industrial group Tata had paid $2.3 billion for UK car giants Jaguar and Land Rover.

For an Englishman who grew up a stone’s throw from the factories where those august motors were made, it was quite a shock. But how that one deal encapsulates the way the world is tilting from West to East.

The Jag deal overshadowed another landmark passed during the week – that India notched up its 260 millionth mobile user, thereby moving ahead of the US to become the world’s second largest mobile state behind China. With 75 per cent of the population still to be connected, these are dizzyingly exciting times for the Indian people, and especially its mobile sector. But let’s not get ahead of ourselves.

India’s sheer size and recent economic progress may make it a commercial powerhouse, but many millions of its people still live in grinding poverty, and even the emergent middle class earn modest incomes. This puts a limit on the domestic scope of the Indian mobile content business and explains why local specialists are so interested in overseas markets.

Take the Indian mobile games market, for example. It’s worth around $40 million a year, nearly half of the country’s entire electronic games business. Vibrant, but small. Little wonder that Indiagames chases deals with the likes of PopCap, while Jump Games signs a global three-year deal to publish Manchester United games.

This subject was debated during a lively conference session when a local delegate implored the panel to get behind the local creative community and develop an original Indian IP blockbuster. The consensus from the panel was ‘we’d love to, but it’s not the real world’. As was continually stated during FICCI Frames, Indian content means three things: Bollywood, cricket and religion. None of which travel that well.

Indeed, it’s estimated 40 per cent of all digital revenues come from Bollywood, and that six per cent come from ‘devotional’ works. It’s why the local content giant Hungama bought a share in religious content aggregator Astute Systems earlier this year.

Of course, it’s worth repeating that the rising incomes of the Indian population, and its sheer scale, can only push the mobile entertainment industry one way. This process will be accelerated by a relative lack of landline and broadband infrastructure that makes mobile the premier medium for digital entertainment and web connectivity.

This much is clear in two facts: that India has just 30 million broadband subscribers and that mobile gaming grosses three times as much as console gaming. “Mobile has already surpassed online thanks to better availability and a penetration of 18 per cent,” says Manoj Dawane, CEO of local content specialist Mauj.

It helps that, culturally, India is so ravenous for entertainment. The awesome power of Bollywood looms large across the whole nation and appears to unite rich and poor, educated and uneducated. There’s far less intellectual elitism than in the West about popular entertainment. According to local research, Bollywood underpinned the downloading of around eight million ringtones a day in 2007.

The desire among all sections of the population for mobile entertainment has led local content providers to experiment with flexible pricing and delivery. Both Google and Times Internet have built voice-based search and IVR systems for illiterate subscribers. Jump Games offers pay-per-play gaming for the equivalent of 10c a game, which delivers one million plays per title. Meanwhile, operator Tata has developed a browser for ultra-low end handsets.

Pankaj Sethi, president of VAS at Tata, says: “There’s just as much desire for content among lower income groups, so we feel strongly that we should cater for them. Because we’re a CDMA operator we have certain advantages with BREW that meant we could launch an Opera browser for sub-$50 handsets.”

Sethi is a passionate advocate of mobile content and is planning a series of ambitious launches in the mobile ad space later this year, such as a platform for injecting ads into the SMS that tells pre-pay users how much credit they have left. In a market with 250 million users – of which 90 per cent pay as they go – that’s good business.

Sethi is under no illusions that Tata is a content company, but he does recognise the importance of the operator within the Indian content sector. “It’s not our content, but we do take responsibility for marketing it well,” he says.

He needs to, as off-portal has never really taken off in India. Although Buongiorno has launched in India, the Western D2C giants are barely evident and locals like Hungama have stuck close to the carriers instead.

Its CEO Neeraj Roy says: “The cost of ad inventory relative to the unit price of content makes it too expensive for any D2C company to make an impact, or for us to try. The only companies that can are TV stations that already have brands and airtime.”

In fact, Star TV set up the first Indian short code in 2003, and moved from mere interactivity to delivering rich media content in 2006. Its 7827 shortcode provides a single destination across the 11 Star India TV channels. Star even launched a free on-device portal.

For the rest, on-portal is the only way. Tata, for example, has 80 content partner deals. But these CPs have the same carrier grumbles as their counterparts overseas, citing  billing systems that authorise downloads when there’s insufficient credit and punitive rev shares.

On a more general level, there remains a pernicious piracy problem in India. Vipul Pradhan, CEO of the anti-piracy body PPL, believes 80 per cent of ringtones are pirated, which is why, for all their popularity tones account for just 15 per cent of mobile music revenues against 75 per cent for the piracy-proof ringback space.

Piracy could be India’s toughest problem of all. But if the country’s tireless entrepreneurial spirit is applied to finding ways round it, trust the Indians to find a way to crack it.