Content, technology and distribution are three key pillars: Neeraj Roy

Interview with CEO, Hungama

Movies and music have formed Hungama's lifeline for more than a decade. Having started out in 1999, as an online promotions company, Hungama is now best placed to reap the rewards of a long association with the Indian consumer, says its Chief Executive Officer Neeraj Roy . Excerpts from an interview with Urvi Malvania and Arundhuti Dasgupta

How do you see Hungama competing with the rash of digital media companies that have emerged in recent times?

We have 7500 films across 12 languages. We are working with close to 52 different studios and 400-odd content partners. Not only will we offer the widest range, we have access to every part of content and not just one studio. And have built very deep relationships with the content ecosystem. This is not easy to do.

But the new music apps and the expected entry of international players, how will it impact the company?

We have a very great understanding of the Indian consumers. We started with music and then music videos - in markets like India you must realise that the consumer does not listen to music, he watches it. About 90 per cent of our music is a derivative of cinema and the first look of a cinema comes from music. These are great insights and we are also bringing about innovations based on our knowledge.

For instance, we have brought about 'gamification' in the services we offer. If you subscribe to the service and if, say, you like a particular movie or song, or make a playlist, you get points for this. These points can be redeemed for digital goods.This creates tremendous amount of immersive engagement.

How large is the Indian market for digital entertainment? And what is Hungama's share?

The Hungama service reaches 62 million consumers every month across the range of our services. At an end consumer price, that is what the Indian consumer is paying currently for digital content, I would estimate the business to be at Rs 3,000-3,500 crore. In India, roughly 20 per cent is engaged in content consumption apart from voice. Of this 40 per cent accesses the Internet and half of that pays for it.

And does Bollywood bring in the most business?

Bollywood at the end of the day is just 50-52 per cent of the business. About 44 per cent still comes from regional languages. The biggest category of consumption is music (60 per cent) followed by film and music video (40 per cent). But the category growing the most is video.

What is the big challenge in this business?

In this business, content, technology and distribution are the three key pillars. As far as content is concerned, Hungama has been responsible for hundreds and millions of dollars' worth of business for this industry via a medium which we pretty much worked and created for them. Technology, we have worked very hard and have an intricate back-end so that whatever the device the customer has, our platform recognises that and provides the best quality service. There is a proliferation of devices and we realise that we have to be where the cusotmer is. International players looking at India have to understand this. The biggest challenge for us has been to monetise content.

What is Hungama's revenue model?

About 97 per cent of our business comes from subscriptions and consumer purchases. And then we do a lot of stuff with the brand ecosystem through advertising, sponsored programming and creating a channel of sorts with a brand around it. Many say that Indian consumers don't want to pay. That is not the case. The consumer has a value we must respect. We have introduced uniquely what we call sachet prices. If a customer wants to access the service for a day, he can. I would say that all the companies opting to go the free route are lazy companies.