MUMBAI: India's broadcasters have invested heavily in digital platforms as more and more consumers go online, but their attempts at monetisation are being hindered by high data costs.
It's the "elephant in the room", according to Keertan Adyanthaya, managing director, NGC Network India and Fox International Channels.
He outlined a scenario to Exchange4Media, where consumers might buy three hours of content – about 1GB – for Rs 10, but downloading that volume of digital data could cost Rs 500.
Broadcasters, he said, were struggling to deal with this imbalance. "Until this cost of data consumption comes down to more affordable levels, there is no digital video play in the country," he stated.
That may be true to an extent of mobile devices but there is clearly an appetite for online video, with comScore reporting video viewing on PCs doubling in the three years to March 2014 and brands rushing to YouTube to take advantage of this development.
Some businesses have tackled the mobile cost issue. In mid-2013, for example, telco Bharti Airtel offered its customers the opportunity to view thousands of videos for a price of just one rupee per clip.
But that approach does not address the fundamental issue of monetisation for broadcasters and Uday Sodhi, evp & head/digital business at television network MSM, expected this would start to change in the year ahead.
"While 2014 has been a year of consumption for mobile content, 2015 will be that of advertising for the platform," he said.
Branded content is another area that broadcasters are successfully exploring for their digital platforms. MTV has worked with automaker Tata for several years, and Disney India has gone down the branded content route in the past year.
While problems remain with regards to pricing and mobile infrastructure, these will become less significant as 4G is introduced and more people take advantage of the proliferation of cheap smartphones to go online.
And organisations such as MUFT Internet are looking at enabling chai stalls and public areas with free wifi access.
Data sourced from Exchange4Media, comScore; additional content by Warc staff