The WATBlog Panel was initiated by a keynote by Bruno Goveas, Head Marketing & Product Management (India), Akamai the sponsors of the WATBlog Panel. He initiated the panel outlining in his keynote that Media explosion over Internet was the future of the next decade.
The panel started immediately with panelists Ashish Gupta - Helion Ventures, Sateesh Andra - DFJ, Surya Mantha - Web18, Suvir Sujan - Nexus India cap and Viraj Malik Percept Knorigin.
The panel discussed the following:
Successes, Barriers & Challenges of Digital Media in the last decade
Ashish stated that the very fact that the term Digital Media is now recognized and accepted and understood is in itself a big success for this space. Suvir on the other hand said that email, im and social networking had changed the way people did things in their lives i.e. changed their lives and hence these were the biggest successes of the last decade. On probing further with regards to successes like naukri and shaadi models Suvir said “To me, Naukri and Baazee are not Rapid Mass Adoptions” and hence cannot be termed as huge successes.
Surya Mantha, CEO web18, pointed out that internet infrastructure of the country has been the biggest challenge so far and hence some good investment in the same is the key barrier. While Vijay Malik felt the biggest success was the fact that traditional companies now were aware of digital media but the challenge still was that though there adoption levels of digital media among the advertisers in India was decent, it has still not become their necessity in the media plans.
Sateesh Andra felt that the investments made in dot com companies prior to the bust played a key role which was required to make Digital Media a gradual success.
To summarize this discussion most panelists felt that indeed email, IM and social networking were the biggest successes while investment in infrastructure remained the toughest challenge for the digital media space.
Ecommerce/Subscription Vs Advertising Models
Sateesh Andra felt that transaction based models needed campaigns based on tangible aspects i.e. a visible tangible benefit for the consumer for paying subscription. With regards to the advertising model he felt that its goin to take some time to see standardization in the way payments are made, ads are run etc.
On the point of subscriptions Surya of Web18 said that the consumer aint spending until you are saving or gaining money for him or he is getting sound sleep at night because of you. He felt that subscription models the world over have failed for content and hence the only way content whether programmed or user generated would earn revenue would be advertising. On the point of advertising he mentioned that we have killed our market size ourself by harping upon the measurability of the medium and focussing on performance driven ads. He said he wasn’t sure how colgate would drive more sales by a pay for performance ad online whereas it should be spending that money on branding.
Ashish mentioned that the qualification of a consumer online and the subsequent closure of deal offline was responsible for digital advertising having low investment in India. He felt that the value chain possible via the digital medium was not completed due to the lack of good ecommerce providers in India. Suvir added to Ashish’s point by stating that no credible brand had been build in the ecommerce space that gave on time, on demand delivery of products which were exactly the same look and feel as advertised online. This according to suvir was a big drawback of ecommerce in India.
The panelists also discussed how the pay for performance model was established as an outcome of the dot com bust due to the need to offer more and had now become a bane for the industry which was being given a really small piece of the large 7000 crore advertising pie.
In summary the panel linked ecommerce failure to the low investment in digital advertising i.e. the fact that the complete lead qualification to transaction value chain was not completed online led to the value of that lead being lower for the advertisers. Also the fact that pay for performance which started in the dot com bust period had affected the investments in branding on the online medium.
Emerging Technologies & Their Impact - 3G, IPTV and Wimax
Ashish Gupta initiated this conversation by making the point that technologies are always over hyped he felt that it was the applications built over these technologies which will have an impact rather than the technologies themselves.
On the point of emerging technologies Ashish Gupta pointed out that India is a growing economy and not a grown economy and hence businesses in India dont take technological risks as there is risk aversion to technology and only those technologies that have passed through other countries have been adopted. Suvir Sujan felt the 3G would have an impact but it would be revolutionary in nature. On the topic of IPTV he questioned what is the value addition by IPTV over DTH? He declared IPTV as dead-on-arrival.
Sateesh Andra felt that in India there will be some customization and localization of technology as well. He also felt that existing content/application providers would use these emerging technologies as wrappers to distribute their content hence the content would essentially be the same only the technology delivering it would be a wrapper.
Suvir and Viraj felt that on demand contentvia DVR would revolutionize the comsumption habits of users in the future.
Mobile Wireless - Sms & GPRS
Ashish said that the monetization model for an sms based model was ads and ofcourse short codes while VAS still was something that was work in progress given the operator - content provider revenue share numbers. Sateesh gave the example of survey in which users were ok with letting go of mobile internet but were not ready to let go of voice and sms which stated the importance of voice and sms over internet for an average user.
Surya Mantha gave examples of two Web18 products on mobile: he spoke about the downloads for both moneycontrol on mobile java application and bookmyshow java application and said the difference between the two was the fact that moneycontrol app had more usage on the phone that bookmyshow. Suvir Sujan added that he felt that anything that made the user take the effort of downloading something isn’t a good model.
Viraj on the other hand felt that VAS in India was limited to the downloads of ringtones and wallpapers and he was still to see any other applications or content do wonders on vas.
The Slowdown and Its challenges
Most panelists felt that this was the best time to startup infact Viraj Malik of percept felt that the slowdown wont have much of an impact on ad revenues and growth will continue to happen. Ashish gupta gave a nice analogy as to why one should jump into entrepreneurship. He said ‘Do not become an entrepreneur because people asked you to or because your neighbor is one become one if you have a streak of lunacy! Call one of the VC’s on the panel if you do!’
Looking Ahead - The Next Big Thing
Viraj malik felt that a mixture of social networking and ecommerce and a mashup of such applications. He also stated that behaviour tracking via social networking and advertising on the same could be big as well. Suvir Sujan felt that DVR and on demand television would be huge as television already has a ready market. He also felt that with mobile subscriber numbers going through the roof interesting mobile applications and short form videos on mobile i.e. mobile tv could be big as well.
Sateesh Andra felt that voice recognition systems for indian languages could be big. He also stated that iphone like phone clones at a cheaper cost could revolutionize mobile surfing in India.
Both Surya mantha and Ashish gupta were non committal on what could be the next big thing! Ashish said that if he knew he would have already invested in such a business he also questioned whether it was even important to discuss the next big thing as it took away from other opportunities which might be as big or even bigger.
QnA Session At WATBlog Panel
Q1) Why VCs in India have moved away from investing in ideas and prototype;s and do not come forward until some startup is already making money?
The panel felt that there was investment happening in prototypes and early stage companies but they also agreed that it wasn’t enough and more investment was required.
Q2) Could a support and services ecosystem, similar to the one that exists around desktops, be built for mobile devices?
Viraj Malik’s answer was why would you want to complicate the mobile phone? Its a simple device that can be used by my mother as well and as long as one keeps the device simple it would work.
Q3) Other than cutting costs and utilizing resources to capacity, what othet startegies should a startup implement during slowdowns?
All panelists agreed that cutting costs was the best way. Infact Ashish gupta added that thats the way a startup should be run in anycase whether slowdown or no slowdown. Sateesh Andra pointed out that one should cut cost once and cut deep.
Q 4) What is your contribution towards the growth of digital media in India?
To this question the panelists outlined their investments and how they have helped grow the space and Surya spoke of the IAMAI and how it was working with IMRB to launch its own set of measurement metrics which would enable the internet to be measured the way TV is measured with TAM ratings. He said steps were being taken even though they are too little still the effort was there from the IAMAI.
Q 5) In order to mature, would the internet segment in India have to go through a phase of over-investment and then a burst, like it happened in the west? (this was the iPhone winning question)
The panelists unanimously felt that this was a great question. Ashish answered this saying that its highly likely that it is required but it may not be a big bubble and bust after that. It maybe a small peaks and lows which grows the space steadily. But as pointed earlier investments are required in this space for it to flourish.
5 Key Takeaways from the Panel
For me the 5 key take aways were:
1) The infrastructure being the key barrier
2) Online advertising and its link with bad ecommerce in India
3) The opportunity in on demand tv
4) Digital advertising wont slowdown
5) This is the best time to startup and be an entrepreneur
Well WATBlog would like to thanks the entire team at WAT i.e. Ruchi, Maneesh, Rahul, Shayon and Preshit whose contribution was key to get the event together. Would also like to thank iMBA and Asfaq for helping us spread the word on twitter. Hope all those who attended enjoyed themselves!
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