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Can a food aggregator leverage original shows in a market swimming with video apps?
Come October and the Bengaluru-based Zomato will go live with 12 new originals, one every week. This is in addition to the six originals such as Food & You with Sanjeev Kapoor or Dude Where’s the Food? with Jordindian that went online in mid-September. That takes the total number of originals that Zomato offers to 18. Then, there are the food shows it has licensed and Sneak Peek, a series on restaurants it launched in August last year. Put it all together and soon there will be more than 2,000 videos on offer when you log in to choose a restaurant or order food. The originals will be available only in India where the $206-million (about Rs 1,500-crore) Zomato operates in 500 cities. The rest of the videos can be streamed in all the 24 countries to the 70 million users that Zomato reaches.
“The objective is to drive penetration, get people to spend more time on Zomato, to increase loyalty and repeat visits,” says Durga Raghunath, senior vice-president, growth, Zomato.
The estimated Rs 8,000-crore online video market is awash with apps — 35 of these compete for India’s 600-odd million broadband users. Google’s YouTube is the largest reaching, over 265 million Indians every month, with revenues of over Rs 2,000 crore in 2018. There is Hotstar from Disney, Voot from Viacom18, and Netflix, among others. These are regular media firms that make ad or subscription revenues from serving licensed and original content.
Globally, with the exception of Amazon, the record of non-media firms that try their hand at video is pretty dismal. Walmart, MediaMarkt, Carrefour, Sainsbury’s, among some of the world’s biggest retailers, have tried to use video. “Most of these services were TVOD (transaction video-on-demand) focused and not particularly successful. Most closed after a few years,” says Tony Gunnarsson, principal analyst, pay TV and OTT Video at London-based research and consulting firm Ovum.
What then is driving Zomato’s thinking?
Raghunath explains. In categories like food and travel, users search, research, read, and watch a lot. As a result, “there has been a 125 per cent increase in food content viewership on YouTube India (alone) in the last two years”, says Subrat Kar, CEO and co-founder Vidooly Media. It tracks online viewing. “People eat with their eyes; they want to learn from chefs. Our own experience with restaurant stories (Sneak Peek) has been good. Users watch it and it offers a richer experience of search. So it (originals) was a logical thing to do,” she says. Kar agrees. “Zomato generates more than 30 million orders per month in India. They attract an audience that is interested in the food genre,” he says.
But where would a video offering from a food app sit in this market, which is bursting with multi-million dollar shows. “We don’t want to be Netflix or YouTube. We are a vertical content creator, so our budgets are limited. The idea is to aid people in their dining-out or dining-in decisions. It is about transaction and search-based video rather than a full movie,” says Raghunath.
The Zomato team spent a lot of time figuring out the length (three, eight, 13 minutes) and type of videos (fiction or non-fiction) they would offer.The length (and, therefore, impact) would depend on “when the user sees it, at what point in the discovery funnel. Is it when you order, when you are waiting for the food to arrive?” says Raghunath.
The three-minute format works when there is one person on the screen, say Sanjeev Kapoor, who tackles food myths. The eight-minute format works for sharply edited reality shows, such as Banake Dikha with Sumukhi Suresh. And the 13-minute ones are for ones like Starry Meals with Janice. The show has Janice Sequeira, a social media star, walk through the kitchens of actors such as Tapsee Pannu and Rajkummar Rao, and they feed her their personal favourites.
Is there any revenue expectation? “Some revenue correlation is necessary, whether direct or indirect. We will not start talking of revenue till we see people using it,” says Raghunath.
Over 75 per cent of Zomato’s revenues comes from commission on deliveries, the rest is advertising, essentially classified. If originals trigger more ordering and, therefore, affiliate revenues or more ad money who’s to complain.
On the plate
- In October, Zomato will go live with 12 new originals, one every week
- This is in addition to the six originals such as Food &You with Sanjeev Kapoor or Dude Where’s the Food? with Jordindian that went online in mid-September
- Total number of originals that Zomato will offer after October will be 18
- Then, there are the shows it has licensed and Sneak Peek, a series on restaurants
- Put it all together and soon there will be more than 2,000 videos on offer
