Excellent data points and insights into evolving industry dynamics. I think your analysis alludes to some very critical aspects of the industry dynamics that is directly relevant to Shemaroo's business model. My point wise views on the same.
Will big spike in number of subscriber lead to similar growth in revenues?
I agree, in the short term, there is hardly any impact. I think even Shemaroo management has been consistently saying that, the recent spike in subscribers/views will not translate into revenue immidiately. However, at the same time, I feel advertisers will also acknowledge that the whole ecosystem is on the cusp of change. Faster speed and cheaper data rates, will mean people are willing to spend more time on digital platform than they used to be. This, translates into, for a finite amount of disposable time(if I may use these word with respect to time too!), larger share of attention/eyeballs to digital media and especially video. So, wouldn't advertiser reorient their budget eventually towards where the eyeballs/attention is moving? I think, gradually, advertising budget will gravitate more towards digital video. Hence, I consider this as tide that will lift all the boats!
Now let me try to bring some data points on what is the actual market potential? Does some channel having over 10mn subscribers mean a lot to advertisers?
I think it is a very valid point. No of subscribers on youtube may have very little meaning for advertisers as it is not sticky thing as such. The only thing it may possibly do is- show the preference of the watchers to an extent. So, I personally feel, people subscribing to Shemaroo/Filimi Ganne or any channel- is only a testament to the fact that, in a diverse country like India, there is enough traction for consumption of all kind of content and the notion that old content is not preferred may be a bit overdone..
Another way to look at potential market is to look at which part (live vs OTT vs social media) of digital media spend is growing fastest
I slightly differ here because the data point that is being used to demonstrate the point contradicts with our earlier inference that subscription/views may not translate into advertising revenue because the article emphasizes that it is the viewership that drives the advertising revenue and in digital media it can be much more targeted. Then, the same logic may still be applied to Shemaroo's or any other digital content too..though with a lag effect as it is not live streaming!
Another argument that is being made is that players like Amazon/Netflix are changing the rules of the game by cutting exclusive deals and providing large collection of high quality premium content and hence older or average content may not have many takers. However, as an amazon prime member, when I ran through their 1000 odd hindi movie content- I was startled to see that hardly 100 titles were recent movies with any kind of "exclusivity"/premium attached to it. Rest 90% of the list was almost like a catalog that broadcasters build - spread across the large range of movies across 1940s-2000- and many of the movie names we would have never even heard of.- So, the notion that these platforms running premium content - will mean less takers for the oldish/not so popular content- seems overdone to me. In fact, when a platform positioning for the "premium" content too has to rely on a catalogue, further buttresses the point that even within that attractive "cream" segment- too exist demand for variety of content spread across genres. I have observed the same for Vodafone/Jio too with even lesser proportion of premium content on hindi movies and very large portion of catalog content
Talking to people from content creation industry, the general feedback is the commercial life of content is reducing with years
Though this may be true for TV Series/serials- is it also applicable to movies? If I recollect accurately, Shemaroo management had mentioned in one of he concalls, that earlier, almost 95% of the monetization of film used to happen in the first cycle (i.e theatrical release and first 5 years) and rest 5% in second cycle and thereafter. However, in last few years the trend has changed and only 80% monetization happens in first cycle while in second cycle and through digital platforms, the share of monetization has increased to around 20% (this is from memory, so numbers may not be exact). Now this is contrary to the overall feedack. Hence, I feel, it is an important point to check with the management.
On your last point of OTT players and others buying content directly from the content owners- is very relevant risk and must be probed further with the management as to seek their response on the same.
Once again, thanks for bringing in lot of relevant points to the table, a healthy debate around which may help us take a more reasoned view on the business.
Disclosure: Significant Investment in Shemaroo from much lower levels- hence my views are obviously biased.