Bcg cii report - one consumer, many interactions - december 2018

Confederation of Indian Industry
ONE CONSUMER,
MANY INTERACTIONS
INDIAN MEDIA HOUSE OF THE FUTURE
December 2018

2 | One Consumer, Many Interactions
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The Confederation of Indian Industry (CII) works to create and
sustain an environment conducive to the development of India,
partnering industry, Government, and civil society, through
advisory and consultative processes.
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industry-managed organization, playing a proactive role in
India‘s development process. Founded in 1895, India‘s premier
business association has around 9000 members, from the
private as well as public sectors, including SMEs and MNCs,
and an indirect membership of over 300,000 enterprises from
around 265 national and regional sectoral industry bodies.
CII charts change by working closely with Government on policy
issues, interfacing with thought leaders, and enhancing
efficiency, competitiveness and business opportunities for
industry through a range of specialized services and strategic
global linkages. It also provides a platform for consensus-
building and networking on key issues.
Extending its agenda beyond business, CII assists industry to
identify and execute corporate citizenship programmes.
Partnerships with civil society organizations carry forward
corporate initiatives for integrated and inclusive development
across diverse domains including affirmative action, healthcare,
education, livelihood, diversity management, skill development,
empowerment of women, and water, to name a few.
As a developmental institution working towards India‘s overall
growth with a special focus on India@75 in 2022, the CII theme
for 2018-19, India RISE : Responsible. Inclusive. Sustainable.
Entrepreneurial emphasizes Industry‘s role in partnering
Government to accelerate India‘s growth and development.
The focus will be on key enablers such as job creation; skill
development; financing growth; promoting next gen
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and governance and transparency.
With 65 offices, including 9 Centres of Excellence, in India, and
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in 126 countries, CII serves as a reference point for Indian
industry and the international business community.

December 2018
| Kanchan Samtani
| Karishma Bhalla
ONE CONSUMER,
MANY INTERACTIONS
INDIAN MEDIA HOUSE OF THE FUTURE
www.cii.in

FOREWORD
Welcome to the 2018 edition of CII Big Picture Summit’s Knowledge
Report, in partnership with BCG, on the future of the Indian media and
entertainment industry.
The Indian media and entertainment industry stands at an interesting
juncture today.Today’s ‘new order’ world is without historic precedence.
More than growth potential, the challenge is to leverage this potential
to create a winning solution. The industry will need new answers and
will have to explore uncharted territory as they try seamlessly to engage
consumers across a trillion new touch points.
The required changes will be many and will range from rethinking
the front end content to reorganizing the back end. Front end content
will revolve around multiple axes like format, language, etc.; back end
reorganization will require newer skill sets, partnership models, etc.
Concerted efforts will be required to engage other key stakeholders
like marketers who are also reimagining their consumer interactions
in this ‘new order’.
The questions are manifold; but this is a tremendous opportunity to
reimagine the role our industry plays not only in the life of the consumer
but also of the nation and the world. This is a critical, re-pivoting point
for an industry that has always been at the forefront of disruption &
reinvention. We are confident that by working together along with the
steadfast support of the Government and other regulatory bodies, the
industry will scale newer heights. We sincerely hope that this report
helps structure the key imperatives and sparks action as we move
towards a new tomorrow.
CII and BCG thank our stakeholders for their valued perspectives and
support towards enriching the content of this Knowledge Report. We
look forward to your continued feedback in enhancing the usefulness
of this publication.
Kanchan Samtani
Partner & Director
Boston Consulting Group (BCG)
Karishma Bhalla
Partner & Director
Boston Consulting Group (BCG)
Sudhanshu Vats
Group CEO and Managing Director,
Viacom18 Media Pvt. Ltd.
Chairman,
CII National Committee on Media & Entertainment

Boston Consulting Group • Confederation of Indian Industry | 5

The Indian media industry has been strongly disrupted in
recent years. This disruption has been a result of fundamental
changes in terms of demographics and access in the country.
The triggers include - growing affluence, higher electrification,
spurt in number of internet users, video enabled devices and
availability of high speed internet. These have led to growing
overall media consumption in the country. The consumption
in India, has been growing at rate of 9% over last 6 years, one
of the highest in the world. At 4.6 hours of consumption per
capita per day, India is still behind China (6.4 hours) and US
(11.8 hours), suggesting further headroom for growth. Unlike
in developed countries – in India this growth has been additive
and not cannibalizing traditional media, yet. For the next
several years, we expect India to remain a multi-modal market
where all forms of media, including traditional media like TV
and digital will continue to co-exist.
While the same consumer has access to multiple mediums,
there are multiple differences in ‘what’, ‘when’ and ‘how’
media is consumed across these platforms. The key difference
lies in the frequency and duration of touchpoints. Ubiquity of
smartphones has allowed people to access media throughout
the day, at occasions that hitherto didn‘t exist. This creates an
estimated trillion touchpoints per annum, which has vital
implications on the complete ecosystem and suggests a need
for an evolved -- media house of the future.. In this report, we
look at how a media house of the future needs to adapt across
four key dimensions – content, advertising, technology and
talent.
EXECUTIVE
SUMMARY

Content now gets consumed on many more platforms, in
different formats and genres. From video tweets & user
generated content to watching short videos on social media
platforms, content viewing has taken a completely new shape.
There is also a massive competition across platforms for getting
that share of eyeballs which leads to emergence of differentiated,
expensive, ‘hero content’. Globally we have seen this trend of
massive investment in content by the OTT players, who are
moving from being just content aggregator platforms to large
content production factories. Traditional media houses will
need to rethink investment quantum, allocation and velocity of
content, as they compete for the same eyeballs.
Newagedigitalnativesalsoworkverydifferentlywithadvertisers.
These players bring a more solution based approach and work
with the marketers to co-define the marketing strategy. However,
there is a fair bit of skepticism about the ROI of digital platform
due to lack of industry standard definitions. This is one of the
reasons why digital dollars have moved slower than eyeballs;
however there is a latent opportunity here – and one that
traditional media houses need to prepare for.
The sector is also getting disrupted with extensive use of
technology beyond just digital consumer touch points. AI, RPA
and advanced analytics are already creating ripples across the
entire value chain. Roles such as ‘Consumer Insights Analyst’,
‘Social Engagement Manager’, ‘Data Evangelists’ have already
started to emerge. Traditional media houses in the west have
already started to either acquire or invest in these new
technologies. In the future, all media houses will be building
their core around technology, and not limiting it to just being a
support function.
These trends have major implication on the talent needs of the
industry. The shift in skill requirement is already real and every
role is evolving. For instance, sales organizations are now
becoming a hybrid of high touch and high tech functions. It‘s
imperative for companies to start thinking about their talent
sourcing strategy to remain competitive in the new regime.
Overall, the employment level in the M&E industry (including
new age digital businesses) is expected to double in next 5 years
and much of this addition will require new skills. There is a
strong need to address this need systemically leveraging the
support of both industry bodies and the government. Larger
media houses will need to play a proactive front end role to
propel this forward. In addition, M&E can learn from other
industries (e.g. ITeS) to draw out valuable lessons for creating
skilling platforms.
Monetization needs to keep pace with eyeballs for the industry
economics to be strong. It is critical that the industry defines a
common currency that works cross platform providing a
consistent and standard measurement of reach and ROI.

THE TRILLION
TOUCH POINT
STORY

Overall media consumption growth in India
continues to outpace global counterparts. At a
9% CAGR over 6 years, per capita consumption is
growing at 2X the pace of the China and 9X that of
the US. With absolute consumption being 2/3rd
that of China and 1/3rd that of the US there is also
ample headroom for growth to continue. While
digital consumption is growing faster, traditional
media particularly TV has also continued to grow
– making India a multi-modal growth market
which is relatively unique. We believe this co-
existence and multi-modal growth will continue
in the foreseeable future.
The addition of the mobile as a “small screen”
has pushed India to more than a trillion
unique interactions with dramatically unique
expressions. These choices play out in a more
complex set of intersections across genres,
formats, session lengths and media. From catch-
up to snacking and binge, digital media is adding
multiple new textures to the existing range of
media touchpoints, making the overall canvas
richer and more complex.
As new choices kick-in,the Indian consumer is also
discovering newer use cases. Consumer demands
vary from discoverability, ease of navigation, deep
libraries to tent-poles that they can look forward
to every month and local stories expressed with
global production standards. Most importantly
consumers want all this in an economic model
that delivers deep value. Our research indicates
that consumers are not averse to paying but they
need to see tangible value.
Are media houses in India ready to capture this
multi-modal growth? What will it take? These are
some of the pertinent questions that this report
seeks to highlight.

India’s per
capita media
consumption
growing
Source: eMarketer database, ages 18+; time spent with each medium includes all time spent with that medium, regardless of
multitasking; for example, 1 hour of multitasking on phone while watching TV is counted as 1 hour for TV and 1 hour for digital
Digital includes all time spent with internet activities on any device, traditional media includes radio and print.
1. If only usage for population who have access to TV is considered, average hours per day is 3.7
2. If only usage for population who have access to internet is considered, average hours per day 3
Total media consumption per
capita in India has been growing
at 9% over the past 6 years. At
4.6 hours of media consumption
per capita per day, vs. China at
6.4 hours per capita per day and
the US at 11.8 hours per capita
per day there is still headroom for
growth.
Media consumption will continue
to grow with growing affluence,
higher electrification and rural
penetration, higher literacy and
greater device penetration.
Total media
consumption
(Hrs/day)
Total media
growth
6-yr CAGR
9%
2012
0.2
0.3
0.2
0.3
1.9
2.71
0.4
1.32
2.7
4.62018
India

4% 1%
China
2012
0.2
0.1
0.2
0.2
2.7
2.5
2.0
3.6
2018
5.2
6.4
11.0
11.8
USA
2012
2018
0.7
0.4
1.5
1.4
4.6
3.7
4.2
6.3
Print Radio TV DIGITAL

0
20
40
60
80
100
2012 2015 2018
5%
7%
6%
22%
Multi-modal growth
Media consumption per capita (Hrs/day)
9
6
71
61
59
6
6
8 7
6-YR CAGR% usage
14
26 29
It’s not just the absolute growth rate, but also about the shape of
growth in India that is different relative to other economies.
We have a significant under-penetration of non-digital media.
More than 95% TV households in India are single screen, hence TV
consumption happens in a family viewing setting. Literacy levels
constrain print penetration and screen density is much lower than
China and the US. At the same time there is a digital explosion. The
number of broadband users has become 2X (~480 million broadband
users across mobile and fixed) and the data consumption has become
10X (~10 GB per user per month) over the past 2-3 years.
The other factor that makes India unique is the ratio of advertising vs.
subscription in the overall monetization pool. Indian media formats
are primarily advertising driven aand consumer costs are minimal.
Unlike the US where the cost of a cable connection can be as high as
80 $ per month, India with a sub 3 $ cost of cable per month, doesn’t
have the need for skinny bundles. The consumer cost for print and
theatre experiences is also much lower than global benchmarks.
Hence there is no economic need for consumers to switch media and
it is likely that all forms of media will continue to grow simultaneously
leading to a multi-model, multi-format market where the same
consumer traverses multiple screens and formats.
India’s unique multi-modal
model

0 0
20 20
40 40
60 60
80 80
2012 20122015 20152018 2018
100 -12% -10%
0% -2%
-1%
-3%
10%
7%
100
Digital growing, other
media stagnant
Digital growing at the cost of
other media
Print Radio TV DIGITAL
4 6
4
14
3
13
3
12
3 4
2 3
6-YR CAGR 6-YR CAGR% usage % usage
40
38
52
42
49 47
45
36
56
54
40
32
Source: eMarketer database, ages 18+; time spent with each medium includes all time spent with that medium, regardless of multitasking; for example, 1 hour of
multitasking on phone while watching TV is counted as 1 hour for TV and 1 hour for digital
Digital includes all time spent with internet activities on any device, traditional media includes radio and print.

Senior Manager
in a tech company,
36 years, New Delhi
Devices used:
Mobile, TV, laptop
Media consumption: 3-4 hrs
Home maker,
42 years, Bhubaneshwar
Devices used:
TV, Mobile
My mobile is my break in office and helps me catchup
on news real time, but I never miss news at 8:00pm
on TV
We fight less for the remote now. I watch whatever I
have missed on TV the previous night on Sony app.
But KBC we all watch together
Engineering student,
23 years, Mumbai
Devices used:
Mobile, TV, laptop
I usually checkout stories, short videos etc. on phone
and share it with friends. When Sacred Games
released I saw the entire season over two nights
A trillion unique
interactions
Consumer expressions are exploding in line with choices. The “how
much”, i.e. total media consumption and the split of online vs.
offline remains similar across age and gender demographics.
However the “what” changes dramatically. Content is still king and
consumers choose long form vs. short form, genres and content
across screens with equal ease.
Analysis of consumer smartphone panel data1 showed that at one
end the small screen has increased the frequency of interactions
manifold (ranging from 4-8 times a day per consumer), the average
length for most of these sessions is ~only 3-5 minutes (vs. 2.5 to 3
hours for TV and 20-30 minutes for print). Hence the total touch
points with consumers – across screens - have gone up 10X.
This presents the opportunity conundrum. Content creators and
marketers need to re-imagine their portfolios to capitalize on the
full spectrum of these interactions.
Source: Nielsen Panel of ~15000 smartphones recorded
from Q2 ‘16 to Q2 ‘18, Consumer research by BCG

6:00 am 7:00 am 8:00 am 9:00 am 10:00 am 11:00 am 12:00 pm 1:00 pm 2:00 pm 3:00 pm 4:00 pm 5:00 pm 6:00 pm 7:00 pm 8:00 pm 9:00 pm 10:00 pm 11:00 pm 12:00 am
Wakes up and checks
messages on Whatsapp
Wakes up, checks whatsapp/facebook
and starts home chores
Watches some video on Whatsapp
and Facebook before afternoon nap
Catches up on some old
shows on Sony Liv app
Watches News and
shows on TV
Checks Whatsapp
before going to bed
and Facebook during coffee breaks
Wakes up and checks messages
on Whatsapp
Spends time watching serials
at home on TV with family
Listens to music
while studying
and Facebook during breaks
Spends time watching serials
at home on TV with family
Watches shows on
TV with family
Checks Whatsapp
before going to bed
Shares videos on Snapchat/
Boomerang on way to college
Watches video on Youtube
on the way to office
and Facebook during coffee breaks
Listens to music on
Saavn while working
Watches News
and shows on TV
Looks at LinkedIn
for new job postings Checks Whatsapp
before going to bed
Reads news online while
surfing internet
Reads news paper
at home
Instagrams during
lunch break
Watches shows onTV
Watches short videos on Whatsapp and
Facebook during coffee breaks

eYou can now just go online
and checkout the suggested
movies or shows. You can also
add it to your watch list
Professor, 27 yrs, Delhi
It has different folder
for movies, drama and
for kids, so it is easy to
use
Professional, 39 yrs,
Mumbai
I use it for any new video,
new series, basically to start
new things
Professional, 27 yrs, Mumbai
Personalized recommendations
that are relevant with content
tailored to the viewer
Intuitive user-
experiences that are
easy to search &
navigate
Discoverability to a diverse library
of content that can be viewed
with minimal interruption
New needs emerging for the Indian consumer
Source: Consumer research by BCG.

Even you get the choice, video,
TV show, movies, series. Best
part is you can see things that
usually doesn’t come on TV
Student, 22 yrs, Surat
Netflix gives you the option
for three variants, mobile,
laptop and TV so you can
watch any video
Professional, 32 yrs, Delhi
Rs. 200 is very reasonable.
Going out for a movie costs
much more than Rs. 200.
Professional, 23 yrs, Delhi
Multiple formats from short
to long, professional to UGC
Multiple device
compatibility to view
across form factors
Value-based economics so cost
is tied to what people actually
watch

MULTI-SCREEN CONTENT: CONSUMER SPOILT FOR CHOICE
• Increasing platform proliferation & emerging content formats such as short form UGC, video
tweets etc.
• Content is king in the new world and acts as a key differentiator for the platform
• Hero content, a must to attract consumers on platform in midst of all the clutter
• Production houses rethinking their content production & investment strategy
CONVERGING ADVERTISING: CHANGING EXPECTATIONS
• Cross platform consumer insights and targeting solutions
• Accountability in terms of impact & common measurement metric
• Support in designing creatives to enable active engagement
What could the media house of the future look like?

TECH-TONIC SHIFTS: REBUILDING THE CORE OF A MEDIA COMPANY
• Disruptive AI and analytics led use cases across value chain
• Transforming traditional business economics
• Evolving investment ecosystem supported by breakthrough ideas
TALENT: THE REAL WAR
• Fundamental shifts in industry redefining talent requirement
• Traditional media catching up, while new media houses already having 50% tech led roles
• Attracting talent into the media house of the future will required rethinking the employee
value prop, talent sourcing pools

MULTI-SCREEN
CONTENT
CONSUMER SPOILT FOR CHOICE

Content producers face an ever increasing competition for eyeballs – many more
platforms, new viewing formats (e.g. watch and play, see music) and a wider
dispersion in genres
Hero content.. multiple times more expensive to create; expensive libraries,
overall content investment increasing manifold
Fundamental shift in the battle for eyeballs- content platforms aren’t competing
in the same time band, but at every time competing with the best of every genre,
every show.. available on-demand
Content curators needs to re-imagine their investment portfolio and
ecosystem model

Interactive viewing Video Tweets
Watching music
UGC
Multiple
platforms
800 TV
channels
5-7 SVOD
OTTs
25-27 AVOD
OTTs
15-20 Social
media /
messaging in
iTunes top 100
apps
India is undergoing a video explosion. Indian
consumers are consuming ~190 minutes of video per
day per user across platforms, which has been growing
at ~8% over last 5 years.
30+ digital platforms have been added to the
already wide range of TV channels. While an average
consumer consumes 10-15 channels per day and
2-3 apps in any given month, the overall spectrum
of platforms from a content creator / curator’s
perspective is massive.
This proliferation has been accentuated even more by
new viewing occasions. For instance, “Watch’NPlay”
on IPL11 had more than 33Mn million viewers. Music
is now being ‘watched’ with T-Series rapidly growing
to become the largest youtube channel in the world.
TikTok - Twitter of videos – has seen ~6x growth in
active users in last 1 year and demonstrated powerful
appeal for short form videos and user generated
content (UGC).
Consumers are viewing different genres across
screens. While Indian language drama and sports
are common, other genres spike differently across
screens which is a function of current supply as well as
consumer preference.
The exploding war for
eyeballs

Consumers see different roles between screens across genres
Sports
Sci-Fi
News
Movies
International
Drama
Kids
Drama
Hindi and other regional
Indian languages
Source: Consumer research by BCG.
Documentary
Comedy
Earlier I couldn’t watch documentaries or
English movies, because my parents don’t
understand it. Now I can watch it on my
phone or laptop on Amazon Prime”
Student, 23 years, Mumbai
I love comedy shows and its very easy
now to find them on other channels like
Prime, Youtube
Professional, 34 years, Mumbai
Short form
UGC
Sci-fi

+79%
OTT viewers spend time throughout
the day thus elongating peak time
6am-
7am-
8am-
9am-
10am-
11am-
12pm-
1pm-
2pm-
3pm-
4pm-
5pm-
6pm-
7pm-
8pm-
9pm-
10pm-
11pm-
12am-
1am-
2am-
3am-
Source: BARC, Nielsen Panel of ~15000 smartphones recorded from Q2 ‘16 to Q2 ‘18 (Based on numerical average
across select group of 9 apps.) for video streaming only, BCG analysis
1. TV viewership pattern from BARC data based on # of impressions
2. Minutes spent on video streaming across all apps on phone
Prime time is
getting extended
As on-demand consumption gets layered
onto appointment viewing the notion of
prime time is becoming less relevant.
On-demand also creates a different
competitive perspective. Every piece of
content is now competing against the best.
So a 2:00 pm show is also competing not
just in a time slot but with the best on-
demand content that the viewer has not
consumed.
The production rhythm also varies
by medium. While broadcasters and
traditional publishers are bound by
cadence and schedules, digital players have
much more leeway to play with peaks and
troughs in the content pipeline. Decisions
to greenlight are absolute and the best
piece always comes on top nuanced
for individual preference. Our analysis
revealed that traditional broadcasters in
developed markets like the US and UK
produce 2-3X the content volume vs. select
SVODs, while these SVODs command
higher viewership and engagement.
+251%# of TV impressions increase
dramatically during prime time
# of impressions
Only TV1
OTT2
minutes spent

Note: All numbers above include sports rights
Source: RBC Capital Markets report, Media partners Asia report
Annual content budget for Global players
($ Billion)
AMC
Discovery
LionGate
Amazon
Hulu
Viacom
CBS
Netflix
TimeWarner
Disney
Comcast
Fox
1.0
3.5
1.7
4.2
12.4
2.0
7.1
12.7
3.0
12.0
15.0
16.7
Massive
investments in
content globally…
Globally players are realizing
importance of creating curated
content, in line with viewer
preferences. As a result traditional
players as well as digital natives
are making significant investments
to build their content pipeline.
Players like Netflix invest
aggressively to match 3x the
investment made by top players
like Amazon Prime and Hulu.

Source: Media Partners Asia (Report - TV, Movie And Online Video Content Budgets Across India, Korea And
Southeast Asia Passed US$10 Billion In 2017); Magna Global Database for Ad revenue (June 2018); BCG
analysis for TV revenue market sizing
…also being
replicated in
Indian market
Indian players are also investing heavily. Video
players invested ~$4-5 Bn in 2017 which is
14% higher than their investment in 2016.
Much of this investment is going behind
“Hero” content which is ~3-4X more expensive
than traditional video. OTT players across the
industry are investing heavily on originals. In
2018, Amazon has planned release of 18 new
original shows including some exclusives.
Even Netflix, has shifted its strategy towards
investing in some Hindi/regional content with
the launch of Sacred Games.
Players should now think about few
imperatives given investment scenario;
Rethink economic models as content
becomes more expensive
Getting consumers to discover your content
given clutter in market
Rethink strategy of what content works on
OTT vs. TV
2016 2017 2016 2017
Investment in video content (INR Cr.) Total revenue video1
(INR Cr.)
25-26K
28-30K
60-70K 70-80K
+13%+12%
Amazon Prime spent Rs.1-2
Cr per episode on web series
‘Inside Edge’; Netflix spent
Rs.2-3 Cr on ‘Sacred Games’ as
against TV content produced
for Rs.8-10 L per show

VELOCITY OF CONTENT
across the value chain (from
greenlighting, to taking on-
air / on-line, to sun-setting)
RELEASE
SCHEDULES
(on-air, online and
moving across screens)
INVESTMENT
QUANTUM
INVESTMENT ALLOCATION
(across genres, library vs. hero
content, short form vs. long form)
Re-imagine

CONVERGED
ADVERTISING
PUSH TO PULL
28 | One Consumer, Many Interactions28 | One Consumer, Many Interactions

Marketers everywhere are attracted to digital
media. However, there are real questions about
making the media portfolio work.While on the one
side digital offers a solution-based approach, new
ideation, sharper targeting and return metrics, on
the other side there are unanswered questions
around measurement of ROI and impact, and
rethinking multi platform advertising strategies.
This is one of the reasons why monetization of
digital media has been a challenge and dollars
have moved slower than eyeballs.
What marketers really want is a converged offer
that is anchored cross platform and brings in
sharper targeting as well ideation and storytelling.
The media house of the future will need to create
this converged offer bringing in personas, higher
attribution and weaving in narratives and content
native to the platform across advertising.

Digital natives are attracting marketers to digital advertising
Solutions-in approach (vs.
property based)
They helped create the right
creatives for the medium…
… they helped identify white
spaces in the category…
Return metrics (beyond
eyeballs)
...identified correlation of search
results to sales in micro-markets …
Targeting (not just scale)
…they helped identify the best
markers for our TG – e.g. people
thinning hair for problem solution
categories …
Ideation
…identified attributes for
consumers who have searched
for nutritional deficiencies for a
supplement brand…
Education
…workshops to help brands
understand how digital discovery
and the influencer network
operates…
FOMO1
…I feel like I will be left behind if
I don’t know enough about digital
platforms
1. Fear of missing out.
Source: Highlights based on discussions with 25+ brand managers and agencies. Select statements, have been masked for confidentiality

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1. Referring to a European enquiry on market position misuse
Source: Highlights based on discussions with 25+ brand managers and agencies. Select statements, have been masked for confidentiality
…we don’t always believe the metrics they are all self- reported and there is no independent third party we trust…
…brand safety is very important for us… how do we secure that?
…we started with the aspiration of 25%+ ad-spends moving online but we don’t think the metrics are stable enough
…
…we don’t know how to compare digital vs. off-line, the metrics are very different …
…they are being questioned by regulatory authorities for abusing their market dominance, can we really trust
them1
? …
…I don’t know how they count views 3 second / 5 second … and how do they measure that…
However, multiple questions remain unanswered

Hence, digital dollars
moving slower than
eyeballs in India
TV Video
Digital Video 18%
82% 92%
8%
Video Consumption Ad Revenue
India

1. Units: Mn Constant USD
Source: Magna Global Database; PQ Media Global Consumer Media Usage Exposure Forecast 2017-21, BARC Database for Indian video consumption %
Video Consumption Video Consumption Video ConsumptionAd Revenue Ad Revenue Ad Revenue
78%
22%
80%
20%
72%
28%
73%
27%
72%
28%
83%
17%
China UK USA

Support in
a design
thinking
Better
customer
engagement
One
consolidated
media
Ideate
Targeting
Offline+Online
Storytelling
Engagement Reach
Measure
Partners help in
ideating and
designing
campaigns
Identify the best
markers for the
target consumers
One campaign
across all mediums
whether offline or
online
Common currency
to accurately mea-
sure impact across
platforms
Engagement
with the platform
throughout the day
Widest reach to
drive national
campaigns
Understand the
way consumer’s
engage with stories
across occasions
Advertisers’ needs
from media partners
are evolving
Advertisers have started thinking of media
houses as ‘partners’ and expect them to
participate in the ideation and storytelling
process.
They expect media companies to educate
them on ideas for proposition and co-
create them. Advertisers also hope to get
contribution in the process of targeting,
engaging and reaching out to the right
customer segments. Through their vast
database of customer preferences of genre,
format, time, etc. they are regarded as experts
in the same.
Media houses can also help advertisers devise
a cross-channel strategy. Advertisers rightly
expect media companies to create a common
currency for measuring customer behavior
across mediums to help guide advertisers
better.
Source: Highlights based on discussions with 25+ brand managers and agencies. Select statements, have been
masked for confidentiality

Can the media house of the future create the
converged offer?
Persona and communities
Who is the viewer?
Broaden customer understanding
by linking digital physical
touch-points
Monetize insights – be the link
between different companies and
monetize customer understanding
Business impact and
marketing $
Have more “skin-in-the-game” by
being responsible for more than just
eyeballs – take digital natives
head-on
Shaping opinions, forming in-
sights
Create the creative – be the creative
agency for brands on your platforms
– you understand the medium best
Create “instant gratification” based
interactions with readers to encourage
active engagement
Accountability Narratives creatives
1 2 3

TECH-TONIC SHIFT
AI ANALYTICS BACKBONE

Multiple use cases for AI Advanced Analytics
are emerging across the media value chain.
Each of these use cases have the potential to be
disruptive.
Traditional media players also understand the
criticality of these skills and are acquiring/
investing in niche players to acquire these new
skills. Media players need to analyze and think
through the implications of making investments
in tech in-house versus investing in technologies
externally.
However, we do expect many tech disruptions
to become core to the business e.g. analytics to
drive consumer insight, recommendation en-
gines and behaviors.
Within media, many newer companies, such as
Spotify, Netflix, and Facebook, have long em-
braced these technologies—and now it’s time for
the more traditional media companies make the
same leap. (See “Powering Up Smart Machines
in Media,” BCG article, November 2018.)
Can media companies rebuild their core around
technology. This is a question not just of talent
and investment but requires a deep cultural
change?

Source: BCG analysis
AI Analytics
getting deeply
embedded in media
AI is going to fundamentally alter the content
creation and consumption pattern. Globally
media companies have started exploring AI for
disruption. Some examples -
Smart “assistants” perform rote tasks in
filmmaking—and let creators focus on creating
- E.g.,: 20th Century Fox used IBM’s Watson
platform to create the first “cognitive movie
trailer.” It selected the best 10 scenes to be
included in trailer nad increased the speed to
output
“Robo-reporting” lets human talent spend
more time creating high-quality and
differentiating content
- E.g.,: The Washington Post’s reporting bot,
Heliograf, has been used to report on election
results and high-school sports
Netflix using AI to create personalized content
- E.g., A movie may have different
ending depending on the who is
watching it
Content
supply
Content
acquisition
Topic
monitoring
recommendation
Content
analytics
Programmatic
advertising
Dynamic
pricing
Targeting
right talent
Intelligent
document
recognition
Image and
footage
recommendation
Video image
annotation
search
Yield
optimization
Recommendation
engine
Revenue
assurance
Content
production
Content
management Advertising
Viewer
engagement
Support
functions
Content
generator
Routing
optimization
Text-to-speech
and voice
interfaces
Chatbots
Forum monitoring
Customer
segmentation
A/B testing
Inventory
planning
Impact
measurement

Thereby developing deep understanding of consumer experience
Source: Company presentation, BCG analysis
...............................................................................................
...............................................................................................
.........................................
......................................................................................................................................................
...................................................AI, Big Data,
Cloud Computing
Intelligent creation
Intelligent Watching
Intelligent
Production
Intelligent
Monetisation
Intelligent
Tagging
Intelligent
customer service
Intelligent
DistributionCasting
Script Evaluation
Traffic box office
prediction
Hot content
prediction
Adaptive bit rate
streaming
Watch Me Only
Digital video
fingerprinting
Intelligent content
review
Intelligent video
encoding
Personalised ad
distribution
Scenario-based
advertising
Video-In
Intelligent content
tagging
Automatic
classification
Intelligent chatbot
Intelligent online
customer service
Intelligent call
center
Intelligent search
Personalised
content
recommendation
One of the largest and most
successful OTT players in China,
leverages AI technologies and
big data to provide personalized
recommendations and achieve
better user interaction. The
platform glues users by improving
social engagement. The platform
also rolls on-screen commentary
feed. For advertising partners,
the company provides pre-
video advertisements, pop-
up advertisements, in-feed
advertisements and innovative
advertisements based on content
understanding of the consumer.
Example:
Leading Chinese
OTT player
has leveraged
AI big data
technology
across spectrum

User Created Content Monetization
Platforms
(14 co.| Investment share 3% | $255M)
News Content Publishing
Platforms/ Online
Marketplaces
(18 co.| Investment share
13% | $1.3B)
Marketing Data Man-
agement Platforms
(16 co.| Investment
share 2% | $225M)
Video on Demand
Online Streaming
(19 co.| Investment
share 6% | $573M)
Sporting Content Online
Platforms
(18 co .| Investment share
16% | $1.7B)
Application Development
Gaming
(20 co.| Investment share 6%
| $500M)
Production Broadcasting Services
(49 co.| Investment share 28% | $2.7B)
Online Ticketing Platforms
(10 co.| Investment share 3% |
$ 267M*)
AR/VR VFX Services
9 co.| Investment share
23% | $2.2B)
Acquisitions concentrated
in‘Production Broadcasting
Services’
80 companies
Investments focused in‘Online
Platforms Solutions’
95 companies
(165 Events)
The tech-tonic shift has already kick-started
and topics such as artificial intelligence,
machine learning, data visualization are
gaining momentum in the western world.
Large media houses are already investing
in smaller tech-enabled companies with
breakthrough ideas. A text based analysis
on Quid conducted for top ~15 media firms
in US such as Time Warner, The Walt
Disney company, NBCUniversal, shows
that alongside the core sectors such as
production broadcasting, firms have
started investing in online platforms. For
example, in 2016, Walt Disney invested $10
Mn in an artificial intelligence platform for
sports stats analysis.
Traditional media
companies investing
to acquire AI
analytics capabilities

Note: Above analyses includes companies from US only
173 co. | invested in/ acquired by leading media companies subsidiaries since 2013 were discovered with Quid and were allowed to cluster based on similar products,
technology, customers etc. Colored by clusters sized by degree of similarity to cluster. Only disclosed investment figures considered
Source: Quid, BCG analysis, BCG Center for Innovation Analytics
Kensho Technologies, Inc.
provides analytics, artificial
intelligence, machine learning, and
data visualization systems.
Invested by NBCUniversal Media,
LLC
Contextly, Inc. operates an online
platform that helps publishers
reach more readers by content
recommendations.
$20K invested by Time Warner Inc.
iSocket, Inc. operates an API-based
platform for the
automation of reserved media sales.
$5M invested by Time Warner
Simulmedia, Inc., a technology
company, provides a digital
advertisement targeting platform
for linear television. It provides
VAMOS, a data-driven predictive
analytics platform for TV.
$25M round by Time Warner
SDVI Corporation provides SDVI
Rally, a cloud-based platform that
manages and optimizes users
media supply chain.
Naritiv Inc. operates a market-
ing and analytics platform that
connects brands with influencers on
Snapchat.
Invested in by Steamboat (Walt
Disney), Disney Accelerator Time
Warner Investments
StatMuse Inc. develops and
markets a cloud based platform
for analyzing sports statistics. The
company develops an artificial
intelligence platform that helps
sports fans explore and analyze
data.
$10M invested in by The Walt Dis-
ney Company

Create Clear Vision and KPIs
One effective approach is to set top-down targets
that are then broken down by departments. This
ensures the strategic alignment of AI and automation
projects as well as the development of expertise and
capabilities in individual parts of the company.
Source: Powering Up Smart Machines in Media, BCG Report, November 2018.
What media
companies must
do to build tech
capabilities

Bolster their Data Collection and
aggregation Strategy
Companies should pull together a
sufficient quality and quantity of granular
data to feed into the machines and
a strategy to acquire data from third
parties. In building a personalization and
recommendation engine for consumers,
for example, broad, general demographic
data is much less valuable than data about
users’ identities, interests, and near-term
purchasing intentions.
Create a Talent Outsourcing
Strategy in Light of AI talent scarcity
A key part of the strategy should be a
framework for how and when to use
external vendors. Vendors play a distinct
role in an AI world because they need to
train their AI tools using data, which often
includes sensitive client information. Media
companies need to work with these vendors
in ways that strengthen rather than sacrifice
competitive advantage while increasing
their internal capabilities.

TALENT
THE REAL WAR

The media industry is getting disrupted in many
fundamental ways - evolving consumer needs,
cross platform content, converged advertising.
Newer business models driven by AI and big
data are likely to become commonplace. Nearly
50% employees of a new-age media company
are already from tech backgrounds, and this is
starting to impact traditional media companies
as well.
While at one end there are new digital roles
emerging (ranging from data scientists, to cloud
engineers and UI / UX designers) at the other
end traditional roles are getting a tech-revamp.
Ad-sales cannot remain devoid of programmatic
and content is increasing relying on testing
through Emotional Artificial Intelligence.
In this new world-view, the war for talent is
much beyond traditional competitors. Media
companies are now vying for much of the same
talent as digital giants across multiple fields.
Tech talent is also more fluid across boundaries
and hence sees global competition.
As they battle this talent crunch, media houses
will need to rethink traditional organization
structures, reskill their current workforce and
revamp their overall employee value proposition
to attract and retain talent.

These tech-tonic shifts are also creating talent ripples
Industry Imperatives
Niche content
Content velocity
Social influence
VR Designer
3D Modelling engineer
Data Architect
UI/ UX engineer
Technical solution architect
Data Scientist – experimentation, algorithms engineer
Digital Evangelist
Cloud software engineer
Machine Learning Engineer
Programmatic and exchanges
Short form advertising
Shift from mass tomicro-segmented
audiences
Targeted advertising
Social Engagement Manager
Consumer Insight analysts
Social media listeners
Customer service – insights researcher
Retention analyst
Virtual Reality/ Augmented reality
Content generative algorithm
On-demand service
UI/UX designer
App developer
Digital Marketing
Leads biz consumer insights
Many new roles envisioned
Multi-screen
content
Converged
advertising
Tech-tonic
shifts

Source: LinkedIn Analytics, BCG analysis
Content
creation
Alliances/
Partnerships
Customer
Support
Distribution
Analytics/
Big Data
Digital
Social Media
Others Total
16%
3%
1%
13%
3%
27%
38% 100%
New age media players are ahead of the curve with ~50%
roles related to digital analyticss

Purchase or sales of adverts through automated technologies, known as
programmatic advertising requires analytics tech skills that go beyond
traditional sales skills (See “Media Entertainment:
The Nucleus of India’s Creative Economy,” BCG report, December 2017)
Buyers are also increasingly familiar with programmatic sales, which
means organization need
• Sales agents that are specialists
• Move towards a sales consultancy model vs agents who gave
traditional transaction support (similar to digital natives)
Tech enabled ad sales
Media companies are increasingly investing in technology that allows them to
get deeper insight on who their consumer is and what they are watching
To be able to support these requirements, companies need roles like data
scientist and data technologist with a deep understanding of the business
Analytics and AI enabled consumer insight
• These insights allow companies to personalize the content,
influence content investment decisions and support advertising by
providing targeted reach
Examples of traditional roles in media that are getting a
tech-revamp

Organization structure for the future
Tech within the organization need to go beyond IT support
to build effective tech culture
New digital/IT roles across verticals – For example, sales
team should reorganized to become a hybrid of high touch
high tech model
Retraining the current workforce
Massive re-skilling for skills of the future
training and enablement
Rethinking HR within the organization
Value proposition and talent sourcing strategy to align with
new reality to include workforce on new technologies, soft
skills
Organization
imperatives
for continued
sustainable
growth
Note: See “Media Entertainment: The Nucleus of India’s Creative Economy,” BCG article, December 2017

New measurement metrics
that create a de-duplicated view across
screens and represent more richness on
the consumer than traditional
demographic indicators
Skilling
through platforms created via a healthy
collaboration across government, industry
and leading players
Two industry actions that are imperative to create tomorrow

Source: Indian IO table (MOSPI), Expert inputs, BCG analysis
Media provides
employment to
~4.5 mn people
Induced impact
Influenced consumer spend such
as tourism, consumer goods,
retail
Indirect impact
Trickle-down growth in other
industries due to media and
production activities
Direct impact
Revenue from core media
activities
Induced
~1.3
Indirect
~1.9
Direct
~1.2

Direct
employment
expected to
double in
5 years
1.0-1.4
2018E
2023E
1.8-2.0
1.1-1.2
2.0-2.2
3.0-3.4
1.8-2.2
Direct
Direct
Indirect
Indirect
Induced
Induced
6.8-7.8
4.2-4.5
Total employment (Mn)
Source: Indian IO table (MOSPI), Expert inputs, BCG analysis

Sector lacks specialized talent
Example: film production
At any time on a movie set, there are atleast 100 helping hands.
Most of these people come only part-time without any training
which leads to a lot of inefficiency. This is very different from
the way sets operate in global markets.
We still need global talent for special skills like special
effects personnel and action director because that talent is
just not available in India.
Our remuneration structure are lopsided where
certain talent is highly paid e.g. acting, while
others are highly underpaid.
Source: Expert interviews

Stakeholders must work together to ensure that we build
the talent pipeline to support industry growth
Set up government aided
specialized institutes for media
and entertainment education
viz. IIIT for IT
Customized training programs
for faculties and students with
NASSCOM viz. ICT –spread
across 14 states impacting 3
lacs faculties and students
Specialized programs in liaison
with industry viz. proposed
summer internship program,
programs with Symantec for IT
security professionals
Industry bodies along with the
corporates can set up training centers
and/or vocational courses
VFX and immersive technology
Investment in captive training centers
E.g. - UK has Screen Skills -
industry-led skills body for the
UK’s screen-based creative
industries - animation, film,
games, television including
children’s TV and high-end
drama, VFX and immersive
technology
Government of India Large media houses
Online skilling building platforms
can be created
Mentorship and skill dev. program
for SMEs by industry bodies
Industry focused skill development
programs designed in liaison with
industries by IEEE, NIIT etc.
E.g. - NASSCOM has created cloud-
based/ Digital delivery platforms
that focus on required skills
ME industry bodies

The unified
currency challenge
Audiences, globally and in India, are
traversing seamlessly across screens. Digital
media has also raised the bar on targeting
much beyond traditional axis of age, income
proxies, city tier and gender.
Measurement, however, has not kept pace.
In order to stay consistent unified in
the promise to marketers, the industry
needs a high-fidelity metric that provides
de-duplicated audience measurement on
content consumption across platforms.
This new-age vocabulary must also lend to
behavioral data, going beyond demographic
identifiers.
This end state however remains illusive
in light of widely varying perspectives
with which stakeholders are entering the
discussion. The gap on even something as
basic as what constitutes a view is wide and
open not just between digital and traditional
media but also across multiple digital
natives. For instance, if some platforms
count a video as a view only if it is watched
for more than 30 seconds while others count
a view in sub 5 second intervals.
Multiple agencies
– no single source
of truth
Implementation
challenges due to
platform
fragmentation
Lack of a
consensus on
what to measure
Misaligned
stakeholder
incentives

The media industry and
marketers must come
together to form the industry
body that defines and
measures on an ongoing
basis. This has to be an
independent third party that
carries the voice of multiple
stakeholders but operates at
arms length.
Form the Consortium
In order to create trust, all
players (advertisers, platforms
and publishers) need to find
the balance between self-
reported metrics vs. third
party measurement. Self-
reported / mutually defined
metrics can be used to
enhance but there must be
a common base that helps
compare on a de-duplicated
basis.
Stakeholders must accept the fact
that in the new-media world a
one-size fits all metric will remain
illusive. Metrics must factor in
richness on aspects like quality
of the audience (behavioral
data) and engagement (often
across screens). Media needs
to be measured across multiple
metrics. The right fit can then be
determined by use case.
While multiple media
formats (esp. digital natives)
are at the avant-garde of
technology, measurement
systems still have a distance
to be covered. A robust
technology backbone is
critical to ensure that there
is no dissonance on the
agreed-to metrics.Set new boundaries
Imbibe metric complexity
Technology investment
Is there a path to resolution?

Concluding remarks
Media consumption in India is continuing to witness high
growth. This growth is coming on the back of fundamental shifts
which are de-constructing the industry value chain and creating
new sources of competitive differentiation. The ‘media house
of the future’ will look very different from today and the past.
The new evolving media house will need to embrace technology,
digital consumer interfaces, sharply different content models
and fight for talent against an unknown set of competitors.
In order to benefit from these disruptions, the industry needs
to come together to find new ways to address the monetization
challenge and create platforms to address the skill requirements
of the future.
Ultimately, media companies will continue to succeed basis
what they do best, create compelling stories, engaging customer
experiences, and keeping the human connect alive. However,
they will need to take on a new avatar to keep delivering to their
promise.
Copyright © 2018 Confederation of Indian Industry (CII). All rights reserved.
No part of this publication may be reproduced, stored in, or introduced into a
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not constitute professional advice in any manner. Neither CII nor any of its office
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Published by Confederation of Indian Industry (CII), The Mantosh Sondhi Centre; 23,
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FOR FURTHER READING
Entertainment Goes Online
An article by Boston Consulting Group,
November 2018
The Digital Revolution Is Disrupting the
TV Industry
March 2016
The Future of Television: The Impact of
OTT on Video Production Around the
World
September 2016
The New Indian: The Many Facets of a
Changing Consumer
March 2017
Digital Consumer Spending: A $100 Bn
Opportunity
A report by Boston Consulting Group,
February 2018
Television’s $30 Billion Battlefield
August 2018
Convergence: The New Multiplier for
India Media Entertainment’s @100
Billion Vision
An Report by Boston Consulting Group,
October 2016
Media Entertainment: The Nucleus of
India’s Creative Economy
December 2017
Powering Up Smart Machines in Media
December 2017
Boston Consulting Group publishes
reports on related topics that may be
of interest to senior executives. Recent
examples include:

NOTE TO THE READER
About the Authors
Kanchan Samtani is a Partner
Director in the Mumbai office of
Boston Consulting Group
Karishma Bhalla is a Partner
Director in the Mumbai office of
Boston Consulting Group
For Further Contact
If you would like to discuss the themes
and content of this report, please
contact:
Neeraj Aggarwal
Senior Partner Director
BCG New Delhi
+91 124 459 7401
aggarwal.neeraj@bcg.com
Kanchan Samtani
Partner Director
BCG Mumbai
+91 22 6749 7074
samtani.kanchan@bcg.com
Karishma Bhalla
Partner Director
BCG Mumbai
+91 22 6749 7135
bhalla.karishma@bcg.com
Nimisha Jain
Partner Director
BCG New Delhi
+91 124 459 7210
jain.nimisha@bcg.com
Vikash Jain
Partner Director
BCG New Delhi
+91 124 459 7431
jain.vikash@bcg.com
Sumit Sarawgi
Partner Director
BCG New Delhi
+91 124 459 7233
sarawgi.sumit@bcg.com
Nitin Chandalia
Partner Director
BCG New Delhi
+91 124 459 7120
chandalia.nitin@bcg.com
Vipin Gupta
Partner Director
BCG New Delhi
+91 124 457 5607
gupta.vipin@bcg.com
Gaurav Jindal
Principal
BCG Mumbai
+91 22 6749 7540
jindal.gaurav@bcg.com
Mandeep Kohli
Principal
BCG New Delhi
+91 124 459 7435
kohli.mandeep@bcg.com
Vishal Jalan
Project Leader
BCG New Delhi
+91 124 459 7043
jalan.vishal@bcg.com
Acknowledgements
The authors would like to thank CII Media for
partnership and sharing insights which contributed
to making of this report.
The authors also thank and acknowledge the
support provided by Mandeep Kohli, Vishal Jalan,
Ekta Roongta, Samiksha Shrawgi, Mallikarjun Vaddi
in preparing this report. A special thanks to Jasmin
Pithawala for managing the marketing process and
Jamshed Daruwalla, Pradeep Hire, Saroj Singh and
Divya Mehrotra for their contribution towards design
and production of this report.

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