Why does everyone want a content firm?

When getting into content becomes a euphemism for diversifying...

This feels like a silly season. News anchors and politicians are labelling an entire city as anti-national for not voting for a party of their choice. Uncles and aunties are advocating hatred even as their children point out the benefits of peace and diversity to them. So here is Rs 1,67,400 crore media and entertainment industry’s contribution to the general silliness sweeping this country. 

Everyone from news publishers to entertainment companies, food aggregators to e-commerce giants wants to be “content firms”. The latest to join the bandwagon is Rs 635 crore En­ter­tain­ment Network India (ENIL), a part of the estimated Rs 10,000 crore Times Group. ENIL operates India’s largest radio network, Radio Mirchi, and gets about 67 per cent of its revenues from radio — a word it will drop from its name in the coming weeks. It made 25 hours of content for its sibling MX Player among other brands. These are 10-minute episodes in various Indian languages such as Gujarati and Tamil. By 2024 Mirchi expects to get roughly half its revenues from non-radio businesses, including selling “content”. 

For more than 10 years, I have heard media firms across the world talking about how they are becoming “content firms”. But the pace has now accelerated — everybody is “into content”. To know why, a trip down memory lane might be useful.

From the late nineties to the early part of the millennium, the pressure that the internet puts, first on music, then newspaper, TV and film businesses, meant that almost all of them had to signal that they were medium-agnostic. For instance, newspaper firms for years have referred to themselves as “content firms” even while a bulk of their top line and profits continue to come from the physical print product. The “content” is usually well-researched journalism that gets top dollars on paper and is then used to drive audiences and revenues across conferences, podcasts or online. By saying that they are content firms, most were disassociating from the negative sentiment surrounding print, a shrinking medium in the West.

That is exactly why TV and film firms did it. In the traditional trajectory of growth, almost all media companies would attempt three-four different segments of the business. Newspapers got into radio, local TV stations and the internet. Television firms into content production, DTH or cable. Film studios into TV or licensed merchandising a la Disney. It was called diversification. That is what ENIL or Disney or Sony are doing. ENIL for instance has a staff of 1,100 people in 63 Indian cities that it will leverage to sell ads for its YouTube channels and events, sell solutions and create content.

However, diversification is not a fashionable word, so how does a firm signify that it is growth and future-oriented. Everything then becomes content — a TV show, a film, a piece of music, an essay, a book or an article, cat videos, hairstyle tips or those on how to make rotis. The word “content” dehumanises and strips the magic of watching a film or listening to song, but its meaning is clear. It is the glue that brings in audiences.

That explains why media and non-media firms are getting into “content”.

The way to differentiate them is by understanding their reasons.

Some, such as Zomato or Flipkart are doing it to get people to spend more time and money on their services. Google, Disney, Viacom18 or Zee are simply doing what they do on TV in another medium. ENIL (and many radio firms) are battling the relevance of radio especially in a market where a lot of new phones do not come with an FM tuner. The myriad reasons all boil down to scores of telecom, technology, media and even retail firms, all looking for “audiences”.

Many will of course fall by the wayside. The test to identify the ones that could make it is whether they have an element of direct-to-consumer in their business. Unlike television firms, which have to sell their signals to cable and DTH operators and then monetise the reach with advertisers, film studios have to get viewers directly and get them to spend money to buy a ticket. Their ability to tell stories is better. Notice that the first line of successful content on many streaming services comes from film studios.

The transformation has just begun. The silly season will continue, for a bit.

http://twitter.com/vanitakohlik