Innovation in Digital Entertainment: Trends & Opportunities

On April 29th we had a very engaging session by Mrs Megha Tata, Managing Director, South Asia for Discovery. In a very engaging style, she spoke about the evolving trends in the entertainment industry and then responded patiently to various questions.

About Mrs Megha Tata

Mrs Megha Tata joined Warner Bros. Discovery (Earlier called Discovery, Inc.) as Managing Director of South Asia on 1st April 2019. Megha has held leadership roles at organizations such as BTVI, HBO, Turner International and Star TV, in an illustrious career spanning over 3 decades. An industry veteran, she leads multiple national as well as international industry forums and is a member of the National Media and Entertainment Committee of FICCI. She is a Director on board of the Indian Broadcasting Foundation and is also the second woman ever to become the President of the India Chapter of the International Advertising Association. Megha has been instrumental in launching several marquee projects for Discovery in India, including the local launch of streaming service discovery+, now India’s largest aggregated real-life infotainment OTT service. Under her leadership, the network has forayed into original Indian content, launching a slew of exciting originals, including the critically acclaimed 'Into the Wild with Bear Grylls’ episodes with Rajnikanth and Akshay Kumar. Megha has been bestowed with multiple industry accolades during her career. She is recognized as one of the top 50 influential women in media, marketing and advertising. Megha enjoys engaging with young minds through guest lectures at leading educational institutions and is passionately involved as a Volunteer with the Isha Foundation - a non-profit organization started by Sadhguru.

The impact of the pandemic

The world of entertainment has evolved significantly in the last 2 years. The pandemic years have been crazy but there has also been quite a bit of learning for all of us. Digital opportunities have been leveraged across industries. Industries and individuals have adapted well to the digital ecosystem. In the entertainment industry, the arrival of OTT has been the most important trend.

From Little Singham targeted at children to the Legends of Ramayana that appeals to the senior citizens, streaming and binging have become the new norm. There has been a significant rise in the consumption of content. The customer is now spoiled for choice.

It is not only content but also the special effects, the streaming media, virtual reality and the new delivery channels that have transformed the customer experience. Now new trends like Metaverse and NFTs are emerging. These are early days. It remains to be seen how these trends will play out.

Important trends

Content fragmentation

There has been a tremendous surge in demand from the non-urban areas. The underserved regional audiences are now a very important segment. A lot of content is not only being developed in vernacular languages but also being aligned with the local culture and context. It has become important for entertainment companies to reach out to these niche audiences.

Content quality

In the future, it is the quality of the stories which will define success. It will not be the star power or the language in which the content is made. Quality content has always been important in entertainment, but it has become more so in the digital world.

Discovery is investing heavily in content. It has a large library of international content which it is contextualizing for a country like India. The key point to note is that one size fits all content will not click in the market.

Content distribution

There are exciting opportunities to expand the viewership for content like never before. While South Indian content is now going to other markets in India, Korean content is going global. All this has major implications for producers, who will have to build their portfolio of offerings carefully. However, the choice for customers will improve significantly.

Branded content

While the customers are spoilt for choice, they also have a limited attention span. The content must be not only engaging but also of shorter duration. While customers understand the value of branded content, they do not want to be disturbed by advertising when they are watching some content. So in this kind of a situation, building a brand has become very challenging. Which is why more innovative methods of brand building are emerging.

MTV Coke studio is a good example. This features live studio-recorded music performances, both classical and contemporary by various artists.

Another example is the largest quiz program in India called the Discovery School Super League. The program is sponsored by Byju's which has found a great way to integrate its core value proposition with the content being offered. The program covers 54,000 schools and 13 million students. This will be the future trend as we go beyond vanilla advertising.

Artificial intelligence

AI will have a transformative impact on the entertainment industry. The impact will be seen in 3 ways: recommendation engines, voice recognition, media automation. AI has significantly changed the way in which people consume content. The algorithms can segment users intelligently and personalise the customer experience and make it more engaging. Thus, entertainment providers can serve their audience far more efficiently.

Gaming and animation

Gaming and animations will support content consumption. As people have greater access to smartphones and the disposable income goes up, there will be more demand for such content. Gaming will also provide more immersive experiences for customers. This will lead to stronger customer engagement. Discovery brought out the Singham game to support its original Singham show. This extension to the original content has been hugely successful with over 15 million downloads. Such interventions may be seen going forward. Certain segments will embrace gaming quickly. Others will do so more gradually. But there's a lot of potential for gaming and animation.

Metaverse

The rise of Metaverse is indeed an exciting trend. But we are still trying to understand how the real and unreal worlds will coexist. Also, even if these exciting possibilities exist, how do we monetise the offerings? But many young people are talking about these trends, and we must keep watching and understanding as we move forward.

In this context, Mrs Tata mentioned that it is important to balance the businesses of today and the business of the future. She is trying to strengthen the business of today. Only then she believes she will be able to build the businesses of the future.

Consolidation

There are 40 to 45 OTT players in India. Such a large number will not be viable in the long run. Customers have limited time. So, they cannot consume all the content. Under the circumstances, differentiated offerings will become important. Discovery is well placed in this regard. It has access to real life entertainment and a global library. It believes it can be complementary to traditional entertainment such as movies.

Pricing of content

It is refreshing to note that customers are today willing to pay for content. But their budget is limited, and the pricing will have to be right to capture a major share of the customer’s wallet.

Q&A

On her journey

Megha has worked with various companies and gone through very rich and interesting experiences. Early in her career she decided to make some choices consciously. Her premise was that it was important to have self-belief and be clear about what she wanted to do. After that she was prepared to live with whatever choice she made. In hindsight some of these choices may not have been right but she has no regrets.

Megha’s father worked in the Indian Air Force and moved across the country. Her college education happened in Bombay. For some reason she did not want to do an MBA. Following a walk-in interview she got a job with a video News magazine owned by the Dalmia group. This venture was called ITV. The job involved door to door selling and it was a challenging experience as salespeople could not enter apartments easily. Then she worked in Star TV for 12 years, Turner for 9 years, HBO for 2 years, then Reliance and now Discovery which she joined in 2019.

Overall, the journey has been satisfying even though there have been ups and downs and challenges. Megha has always believed that we should not worry about what the world thinks. As mentioned earlier, we should have self-belief. We should be aware of our strengths and our weaknesses. We may not be able to solve all the problems. But if we ask the right questions and surround ourselves with the right people, we can address any challenge.

On staying updated

Many things are happening in the business environment. So we must stay calm. Our mind should be stable. For this we should look inward and embrace some degree of spirituality. We should surround ourselves with people who know more than us. Megha’s preferred learning style is to pick up new trends from the people around her. She learns a lot from her daughters. She gets ideas from various people about how the content is being consumed and the social media ecosystem. These are all new trends for her, but she realises that there is no option but to learn more about them and embrace change. Some people attend courses or workshops. Megha believes in hanging out with people. She is part of important networks. She believes strongly in networking. The International Advertising Association is a great platform for networking.

On decision making

Ultimately decision making is a combination of arts and science. It involves both the gut and the brain. While research is important, too much research can lead to analysis by paralysis. Especially for creative decisions the gut is very important. In the case of business decisions, it can be more data based.

Explaining how the brain and the gut must come together, Megha recalled the experience of making the Legends of Ramayana. The story had to be retold through the Discovery lens as a travelogue. It describes the journey of Lord Rama. It is based on an epic that Indians consider sacred. While the decision to make the show was probably based on gut feeling, great research was required to build credibility. It has emerged as one of the most successful shows.

On how marketing is changing

Marketing has changed a lot in the last few years. In fact, reaching customers today is very different compared to what it was 5 years back. The pandemic has accelerated the digital transformation. What might have taken 5 to 7 years has happened in 2 years. Many businesses were not prepared for the pandemic, but marketers ultimately had to find different ways to reach consumers.

The digital platform provides great opportunities for targeting customers. It is data centric and the ROI can be measured. But there are grey areas. While we can measure ROI, the amount of initial investment needed is not clear!

80% of the digital revenue is made by Google and Facebook. So monetization is a key issue. The people who make content are probably making money but the broadcasters are finding it difficult to make money.

On Indian entertainment going global

There is huge potential for shows to go global as the world is one family now connected by technology. Somebody in Jharkhand can watch a Korean show while somebody sitting in Korea can watch a Malayalam movie. The success of Squid has shown that Indian shows can also become globally acclaimed. How much time this will take is not very clear.

On how Korean entertainment has gone global

One reason for the success of Squid games is that it is unique. It's a bizarre show; something that has never been seen before. It has tremendous shock value. As people started trying to understand what was happening, they got hooked. It is not only Korean games which are becoming popular. Even Malayalam movies have now become popular across the country. They have always existed, but the difference is that today technology is providing access which did not exist before.

On her plans for regional OTT

Discovery does not have any plans in this regard. However, for many other content providers, regional play will be very important. Personalization of content will be important for many OTT platforms.

On SVOD and AVOD

Subscription video on demand (paid content on subscription basis) is here to stay. The customer is finally willing to pay for content. That is important because content takes money to make and content producers must find a way of recovering their expenses. Earlier, it was all about advertising but today it is a combination of advertising and content. Along with this SVOD, AVOD (Advertising Video on Demand, free content but with customers must put up with interruptions due to advertisements) is also an important play. If both can coexist, it will be an ideal scenario, but many businesses may have to decide where to put their money.

On what educational institutions can learn from the world of entertainment

The content must be more engaging. There's a lot of fatigue today in the online world. Children are fed up with staying at home. The videos produced should have real life experiences. Books and theory alone will not make the learning experience engaging. We should be clear about how to make even a 3-minute video engaging. Prasad added that the time available to the ICAI Online program learners is very limited as they are typically working executives and they have many priorities. it is important to personalise the content and make sure that the content fits into the person’s work life.

We thank Dr. Vedpuriswar for bringing out the highlights in the form of this note