In 2016, the fault lines in media and entertainment will get exaggerated like never before. It's not a full-blown earthquake yet but the ground is shaking and weaker business models may well collapse in the face of fiercely enormous scale and long-term breakevens. Mature companies with revenue momentum will survive, even grow, but the world as we know it, have known it for 20 years now, will mutate into something quite unrecognisable.
In many ways, this decade is similar to the early 90s, when satellite TV first arrived in India. At the time no one could have predicted we'd end up with 600 channels, across languages, in multiple genres and 150 million paying cable and sat homes. It was impossible to imagine today then, and today, it's impossible to imagine what exactly the implication of wireless and wired internet connectivity will be in 20 years. The incredible speed at which mobile telephony grew surprised even the most die-hard optimist and nothing suggests that the same won't happen again.
Forget individual TVs and players, think connected devices. Forget channels, think apps. Forget linear TV, think on demand. Forget physical storage, think cloud.
The recent Apple TV launch event actually summed it up pretty well. Think of a giant iPhone in your living room. Forget individual TVs and players, think connected devices. Forget channels, think apps. Forget linear TV, think on demand. Forget immobility and broadcast schedules, think anytime, anywhere. Forget weekly or even daily appointment viewing, think binge. Forget physical storage, think cloud.
In 2016, amongst multiple strategic thrusts by a variety of players -- in connectivity, mobility, devices, content, services and payment gateways - Reliance Jio will be the Big Boy who jumps into the crowded pool with a giant splash. The time has now come for that BC-AD moment that will become the stuff of legends in future!
Between all the telcos, ISPs, global giants & governmental push, 4G and wifi will dramatically improve consumer experience. The fierce battle between net neutrality and Facebook's Free Basics notwithstanding, connectivity will spread like a forest fire. But the killer is the fibre to a 100 million homes in two years that Jio plans to achieve. That's the real game changer. What the first cable revolution missed, will happen now. Virtually limitless capacity via fibre optic cable to create incredible connectivity and the ability to distribute, arguably, infinite content.
All of this will be patchy at first, there will be teething problems -- but it will happen. A content and services differentiation will quickly aggregate significant numbers of premium paying customers, the early adopters ripe for change. They will set up and experience the giant iPhone in their living rooms connected to devices in their hands, in their cars, on trains, on planes, in coffee shops and on the beach.
The killer is the fibre to a 100 million homes in two years that Jio plans to achieve. That's the real game changer.
At a price. Always at a price. No free lunches in the universe. Somebody has got to pay. A business model that can loss-fund to acquire customers at discounted prices, get them hooked and then charge them later is one way to go, and interestingly, the entire ecosystem seems to be thinking on those lines. The giant volume market in India can generate some pretty impressive value. Simple maths -- an "eat all you can" multi-service at Rs 500 per month to 1 crore customers gives Rs 6000 crore per year, at Rs 1000 per month, it's Rs 12,000 crore and so on. Suddenly it ceases to be a battle for a share of an industry segment -- it becomes a battle for a giant share of your entire wallet.
Advertisers will also find new ways to jump on to the bandwagon. Subscription services are all very well, but products and services need to sell their wares to customers and the "skip ad" feature is a real bummer. From getting integrated into content to subsidising connectivity to partnering with services, advertising will remain a solid revenue stream for the foreseeable future.
A bundled service -- telcom, internet, TV, VOD, original entertainment, gaming, social media -- with a fair degree of e-commerce, multiple assistance services, banking and non-intrusive advertising thrown in, at a relatively throwaway price, makes for an incredible proposition. And incredibly happy days for consumers
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