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A perspective on the short video industry in India

  • Suraj Murali
  • Jun 4, 2021
  • 5 min read

Updated: Jul 8, 2021

Here is a short take on the short video apps trend in India


The short video product industry has seen tremendous growth for the last 3 years. This has been only boosted by the pandemic as consumers now get additional time as they are at home . I believe the growth has been fueled mainly because of the following reasons:


Over the last 5 years, India has been a data hungry nation.

  • Indians consume more than 12GB of data/month.

  • Cost of data has reduced.

  • Cost of smartphones has decreased considerably. Smartphones are available from as low as Rs 6000-Rs 8000

Deloitte predicts that smart phone users will rise to 58% of the Indian population by 2022


1. Who are the users of these apps ?


There are 2 sets of users here:

· Content creators (User Generated Content model)

Content creators use these apps to let the world know their talent. Earlier they did not have access to a vast audience. Now, with just a smartphone, anyone can showcase to the world their talents – leading to new opportunities especially in media and entertainment.


· Content consumers

Content consumers ( like me..I am trying to be category 1) want content that :

a. they can relate with, and has variety

b. Not spend too much time

c. is vernacular.


The short length of the content( < 1-2mins ) ensures that these videos can be seen during commute, so whenever a person feels bored , he can quickly see any content .In short the average user wants some quick snackable content on the go.


2. What are the most prominent players in the market?

The prominent players are TikTok(banned), Sharechat, Moj, MX Takatak, TnaTan, Mitron, Josh, Roposo, Helo(banned).



Short video apps

Apart from this we have competition from apps who have moved to this space:

Gaana (hotshots), Instagram(reels) , YouTube(shorts) and even Snapchat (Spotlight), being the latest entrant



3. What problem is solved by these apps :


As mentioned in Qn1,

1. For content creators – easy access to a wide audience to showcase their talent

2. For content consumers – Short on the go content, vernacular and has a lot of variety.

3. For brands – Access to a wide audience at a lower cost who can be given call to action.


Also many of these short-video creators go on to become influencers.


4. Who is the Target Group ?


  • Age: Target groups are GenZ ( 1995-2010) and millennials ( 1979-1995). ( Core users)

  • Geography: Short video apps are targeted towards Tier2, Tier 3 and rural areas (urban users are not main target audience, they cater to Bharat than India )

  • Audience Size: They account for more than 530mn population

  • Language: Vernacular(Hindi and languages like Tamil, Telugu, etc. with Hindi being dominant)

Reason for choosing this target group: The urban population already is used to streaming content, have access to malls, movie theatres and a place to hang out.

  • Population from tier2, tier 3 and rural areas (wrt India) are the target audience primarily as they do not have other entertainment options compared to urban peers.

  • access to faster data and vernacular content. Plus the language barrier is overcome.

  • The overall user base is higher compared to urban English speaking population (~200 mn)


5. How many current users do these players have ?


The short-form content penetration currently is around 45 percent of around 600 million Internet users in India. The market is being led by Josh with MAU (Monthly Active Users) and DAU (Daily Active Users) at about 70 to 75 million and 30 to 35 million respectively. The platform was founded in July, 2020 and is owned by parent company Dailyhunt.


It is followed by Roposo with MAU and DAU at about 60 to 65 million and 12 to 15 million respectively and MX Takatak with MAU and DAU at around 55 to 60 million and 20 to 25 million respectively.


6. What could be the potential monetization strategies ?


1. Subscription model – Ad free experience

2. Freemium model – Followers of this model can become a premium member of a specific content creator and get access to his exclusive premium content.

This can be a model where the content creator shares the revenue with the platform. This model can be more useful for celebrities or someone who has established themselves

3. Ads on the platform – Ads can be shown to audiences basis their location , interests, language and other demographics and can be used to make revenue

4. Affiliate model - Influencers can give call to action by providing landing page links in the description and taking a margin on conversions. This margin can be for both the platform and the influencer.


4. How will this industry be 5 years from now ?


Currently, the short video platform is in a growth phase due to freshness of content, data hungry consumer, increased time at home due to the pandemic. These platforms were originally created for snacking during the commute.

Already, these platforms are partnering with shows such as BigBoss for exclusive content. Celebrities are choosing these platforms for promoting their movies through short videos.


5 years from now:

1. Increased user base - Smart phone penetration is expected to bring in more 400mn+ users (mainly from rural and tier2,3 cities ). The userbase of these platforms will considerably increase. While user base will increase, this will also lead to increased content variety and more content creators into the platform.


2. Higher AI-ML involvement - Already, there are many categories for content and good content creators in each area. There will be more involvement of AI-ML in areas such as image recognition, content moderation, speech recognition, etc. AI-ML will also be needed to ensure content categorization and recommendation as well as to make querying easy


3. Consolidation of players - There will a consolidation of players with 2-3 major players and others being smaller players. This is similar to the social media consolidation that has happened with Facebook, Instagram


4. Niche apps for specific genres - There could be another trend where there might be vernacular apps specific to some language (OR) There will be niche apps targeting specific genres of content as people slowly move from all in one kind of apps (Facebook) to more specific platforms for specific use cases - photo sharing(Instagram), YouTube(for videos) and LinkdedIn ( professional networking)


5. Need to monetize will increase further

Currently, the cost part for these platforms comes:

a. CDN – Content Delivery Network related costs is the major cost for these platforms and unless they turn profitable they cannot continue to keep growing as loss making machines. As these companies scale, CDN costs will only increase and that is where they need to find new revenue models. These could be tie-ups with media houses, brands, celebrities, influencers.

b. Quality of content – For a platform to be relevant, it needs to have very good content, and cost of content will also be a major function. Costs might increase as good content will always be a differentiator


Conclusion


The Indian video consumption story has just started. As the pandemic ends and cheaper smart phones are awaited soon, consumption user base will see an increase but consumption time might drop down as newer apps like ClubHouse come and each app tries to grab a piece of the attention span.

For sure, the next 500 mn odd users will predominantly come from Bharat( majorly rural India) .


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