Authors: A. Gupta, Y. Bhargav, Md Javed, N.H.Shah, P.N.Harshita, S.Kaushik
As the frenzy of data-analytics catches up, and an ever-increasing number of business domains come under its shadow, a sector which promises to benefit by leveraging the insights from data analytics is the growing online media and entertainment industry in India. According to Indian Brand Equity Foundation (IBEF), India’s media and entertainment sector are on a promising growth trajectory with CAGR 18.55% and a current market estimation of around $22.75 Billion, the industry is speculated to reach a growth size of $37.5 Billion. In the same report by IBEF, insights from the data showed a confluence of growth in the entertainment industry with the growing internet outreach, as the expected growth in the number of internet users to grow to 511.89 million from the current 331.77 million users, which would in turn lead to to a boom in the demand for digital content from a wide variety of Indian audience.
The ecosystem of digital entertainment is expected to transform into a beast of its own. Corroborating the idea are two interesting trends. Firstly, indicated by the report on Digital Advertising by Dentsu Aegis Network, with the growth of more than 20% CAGR delivered over the last 5 years digital marketing revenues already hitting the 8000-crore mark are expected to grow close to 19000 crores by in the next 4 years. Secondly, is the rapid increase in the level of internet penetration levels in the nation which according to the most recent Statistic estimates are expected to rise to 511.89 million from the current 370 million by 2022. As per the Indian consensus data, 46% of the population lies in the age group of 15-44 years. This age group is a major customer base for digital established digital entertainment players in other developed markets as indicated by customer profile released by Netflix. The unique demographic advantage propelled through extensive internet penetration and compounding marketing spends provide a huge opportunity for digital entertainment players across the globe. The article wishes to explore how Big Data would play a role in allowing the market participants in exploring the opportunity as well as allow them to differentiate themselves in a market with ever-increasing competition.
The importance of Big Data finds its underpinnings in the role knowing what customers want and who are the most valuable consumers’ plays in the creation and delivery of digital content. Big data helps make sense of the information gathered by analyzing a netizens digital footprint from what they like, whom they like, what they want to see and what catches their attention and identify the patterns in their behavior. The suggestions that pop-up on your Netflix home screen is a product of this elaborate process of mapping your likes and dislikes. Because of the use of this analytics, entertainment content providers have been able to do away with the system of shooting a pilot episode and gauging the audience response in the form of TRPs as they now have the power to not only check what a customer likes but also at what time he/she usually likes to relax by watching a movie or a series. Netflix, Amazon Prime, Balaji Alt, etc have also been able to venture out into local and international content generation by researching what appeals to its customer base. Netflix has been a relatively late entrant into the Indian market content generation scene with the popular- Sacred Games and other shows.
Gone are the days when customers were segmented based on age, gender, location etc, with the availability of huge content these surface level qualities are a thing of past and everyone is unique in himself. So, leveraging the Big Data tools to provide the content as per their whims and needs can speed up the acquisition process. Customers are the building blocks of the organization hence retaining them is also very important in case you want to excel and stay in the business. Understanding what the customer needs is the first step of retention. With the advent of smartphones, accessibility to internet and increasing income levels the task of retaining is becoming more and more complex. Hence, the information regarding the person’s interests, likes, social media sentiment is important in tailoring the content according to the necessities. Once this is available all that needs to be done is to keep track of the vital heuristics previously decided and run the algorithms to map the content with the parameters.
Another major challenge faced by the content distributors is the scheduling of the programs so as to obtain the maximum benefit. To address this challenge of scheduling these programs there are a few key concerns that need to be allayed, some of which include – knowing about the kind of devices being used to view the content, the location and the internet bandwidth at that specific location. Though this information is very huge with the robustness and scalability of the big data it can be analyzed and used to our advantage easily. This also ensures that there is an efficient use of resources by allocating them dynamically.
A trend observed in the success stories of video streaming companies is their use of Big Data to understand what, how and when should they advertise to their customers. By the sensing the customers’ online habits, the companies get to know what are the preferences of the existing or potential customers, where do they spend most of their time when online etc. This information helps them to create personalized advertisements for individuals, i.e. they recommend the content which a person is interested in by advertising it on the customer’s most visited online platform. This type of targeting is done by algorithms which require a constant stream of data to churn out recommendations of content for its users. This data is collected both from the data streams of the customers who view online content and by assessing their preferences when these customers surf the internet. This targeting helps the consumers to get a better selection of the content and incentivizes them to stay with the platform. This ad targeting using the algorithms helps Netflix save nearly $1billion1 per year by targeting the right content to the right people.
The understanding of consumer has become very easy for the advertisers with the help of big data. It is a huge opportunity for the video streamers to be the leader in the video streaming segment with an increase in the internet user to 530 million by 2018.
The local content expenditure for video streamers is expected to increase and may go up to $300 million of Netflix alone. All the video streamers have come with a different strategy like Amazon partnering with Vodafone to increase the customer base and tapping the huge Indian market and Netflix using open connect for faster streaming and network congestion offset techniques to occupy a dominant position in the market.
Finally speaking, with the forecasted growth in the industry, increased capital investment and a rapidly evolving technological advancements, big-data analytics promises to impact the way the whole sector operates with its potential transformational impact in optimizing the scheduling of content, increasing customer acquisition, and retention, streamlining the focus of advertisements, providing deeper insights about content monetization and the new content development. Big-data is playing a huge role in determining what type of content a viewer is inclined towards and this is being leveraged by over-the-top providers (OTT) such as Netflix, Amazon Prime etc. who have been using analytics to gauge these inclinations of the audience by testing different genres and scheduling their content based on the viewing patterns of these customers. Since these viewers have been generating digital footprints when they consume this content, the OTT providers have been using this data for aligning the content to individual needs through customized advertisements which have helped in retaining the existing customers and also in attracting new ones. Based on the above observations and inferences, we firmly feel that the media and entertainment industry should read the writing on the wall and make sure that they step up their efforts to leapfrog into the foreseeable future that Big Data promises.
References:
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6. IANS. (2017, October 16). India to have 530 mn smartphone users by 2018: Study. Retrieved from https://www.business-standard.com/article/technology/india-to-have-530-mn-smartphone-users-by-2018-study-117101600191_1.html
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