A thought-provoking comment from Ajit Balakrishnan, Chairman and CEO of Rediff at the NDTV New Media Congress, yesterday – “underpinning the whole convergence argument is that the TCP/IP protocol needs to become common over TV. When all three channels, Internet, Mobile and TV, offer TCP/IP, it will allow a return loop, and you’ll realise that people can talk back. The moment you enter this phase, you enter a free world. At the same time, the pipe people (telcos) will want to become media companies – AOL (NYSE: TWX) tried it. In India, mobile companies have that ambition as well. It’s a great challenge for business models.”
Rajesh Sawhney, President of Reliance Entertainment mentioned that content is lagging behind in funding in India: there is development on the access device front – we have devices from $10 to $1000, but telcos who are investing in infrastructure, are investing in 3G, not 4G. The content and infrastructure problems should have been sorted out two years ago, but lack of investment there is holding us back. He also felt that an opportunity was wasted because public telcos did not open the last mile, and did not have aggresive broadband plans – 10 million lines were wasted. However, Sawhney doesn’t harbour a pessimistic view of broadband – if not in 2009, then in 2010. (Ed: The word “Hope” comes to mind) He did emphasise the need to leapfrog to 4G, and that like in the case of TV, Hindi and regional languages are key to the spread of the Internet.
It was Sawhneys comment on tackling piracy – of firstly reducing the time between Theater and DVD release of movies, and more specifically, of creating a social stigma around piracy, that elicited a response from Balakrishnan, who mentioned how the initial US constitution initially provided copyright only for 11 years, and was later pushed up to 75 years because of lobbying by Disney (NYSE: DIS) executives. (Ed: There’s been talk of it being pushed up to 95 years in India). Balakrishnan advocated a more social approach to monetizing content – ask someone to pay for it if they like it, or take it free with advertisements. He made some very interesting points around video content as well – “Like all things disruptive, something that is nearly as good is good enough.” Resolution levels of video contnet may be poor online (and not HD), but you have an enormous number of people consuming it. as an example, initial studies predicted that US corporates wouldn’t adopt cell phones because the quality of reception wasn’t good enough, while in the Scandinavian countries, they had no choice but to adopt wireless. “Laggard adopters will die a natural death.”
Kevin Bertram, CEO of Distributive Networks felt that business models keep changing at a great pace – they sold polyphonic ringtones a few years ago at $2.99, and not iTunes offers full tracks for $0.99. It forces smaller companies to be nimble. He did feel that operators in India are quicker to pick up changing trends. During his presentation, Bertram presented a case study of the work they did for the Obama campaign – they used text alerts for breaking news, campaign updates, and calls to action – supporters were informed about which channel and at what time a speech would be broadcast, and this helped create greater connects. An ad during the Superbowl got text responses in “six figures”. The campaign also offered content downloads, ringtones and wallpapers, and used twitter and some text responses to the campaign on blogs.
“It’s a mad space to be in”, said Pankaj Sethi, President VAS & Enterprise Market Planning for Tata Teleservices, “We hold the distribution route to the customer, but our partnerships, our adversaries, our companies and our roles are evolving very fast. We need to look at off-portal content and embrace social media.” For the operators, while networks and media are converging, lots is diverging as well, particularly in terms of content choices and the micro-segmentation of interests.
The panel was moderated by Sanjay Trehan, CEO of NDTV Convergence.