Ep#5 — Shobhit Singhal, Hotstar
For our fifth episode, we have Shobhit Singhal sharing his thoughts with our founder, Hatim Baheranwala. Shobhit Singhal is leading growth and personalisation at Hotstar and is a key member of the product team. In this episode of the Soulskill podcast, Shobhit and Hatim discuss the growth of online mobile video consumption in India.
NOTE: The Audio recording of this podcast was of very poor quality, and we decided to not publish it. We have converted the podcast into a blog and unfortunately just have that to share with you. We were really disappointed by this as well… The startup journey has many ups and downs indeed!
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Ep#1 — Advait Gupt, Supari Studios
Ep#2 — Karl Katgara, Butter Media
Ep#3 — Devarsh Thaker, OML
Ep#4 — Sefer Soylemez, Phillips Lighting
Ep#5 — Shobhit Singhal, Hotstar
Edited transcripts —
Hatim: Thanks to everyone for joining — we are very happy to have with us Shobhit Singhal who’s leading growth and personalisation at Hotstar. He is a key member of the product team, and also has been a client of Soulskill for the last couple of months. One of the minor benefits is that towards the end of the session you will be able to ask some of your own questions to Shobhit and get to know this very interesting space that we are all a part of, which is Online Mobile Video and how quickly it has grown over the last couple of years. Before we begin, let me introduce what Soulskill does, Soulskill sources and curates short form video content for consumer platforms by crawling through and identifying the right creators on Social Media channels. Shobhit, would you like to give us a brief on what you do at Hotstar and some context on what role the product team plays?
Shobhit: Happy to, thanks Hatim! Honestly guys, super excited to be here, I’m in the product team of Hotstar and over the last year and a half that I’ve been here, I’ve been looking at personalisation and growth strategies. I think Hotstar has been this crazy journey because every month that you spend there it’s just been a new massive milestone. It’s almost like that Quote where — “The sound that deadlines make when they woosh you by”, it’s the sound that these milestones make as they woosh you by at Hotstar. So it’s been a rocket ship journey really — and pretty excited to be a part of it. Happy to talk about specifics as we go further.
Hatim: The most important specific that a lot of people would like to know is, do you get to watch Game of Thrones episodes before they release or do you have to wait in line like the rest of us?
Shobhit: I cannot confirm nor deny the same! On a serious note just to make sure no one goes to jail, Game of Thrones episodes come to a secure room and nobody gets access to them. Thankfully this time around, all of us get to watch it with the rest of the world at 6:30 am on Monday.
Hatim: What kind of security exists on this, is it encryption of each episode, like unhackable?
Shobhit: We have multiple (job) openings at Hotstar.
Hatim: Fair enough. Getting to the first topic, we are clearly in the middle of a huge shift in the media landscape right now, clearly a skew towards videos, and mobile video specifically over the last few years. Not just within demographics of working professionals such as us, but also within demographics much younger and much older than us. So can you share some of the key numbers that articulate the scale of this shift that’s happened, and the move towards consumption of video on mobile?
Shobhit: There are multiple indicators, look at some of the top video engagement platforms in the country today — it’s not just about Hotstar; you can look at Youtube and the rest and I think the engagement numbers are exploding. The data costs have gotten cheaper — we can thank Reliance Jio for that — and they are now amongst the cheapest in the world. Most people who are Internet-enabled in India have skipped Laptops and Computers and they have gone directly to mobile screens. The rate at which mobile devices have been growing in India has been 3x of the rate at which TVs grew in India, even when TVs were are at their growth stage. By any metric seen today, TV screens are probably flatlining because the question is how many TV screens per household can you have? But the mobile growth is still there — in terms of the people, the access, the reach through that curve is way steeper. If we look at it from a market sizing perspective, not only do we have the entire internet enabled market space in India, which is by anyone’s guess 400–550 million people, but we are also looking at a market that is continuously growing. It is a pretty rosy picture at this point in India.
Hatim: Would you say that every internet enabled user in India is watching videos online? 90% (of them)? How many people who are on the internet are watching videos?
Shobhit: That’s a difficult question to answer, I do think that there’s a lot more headroom there, so it’s not a 90% or 80% number. I’m taking as an estimate that the number is 60%.
Hatim: So basically another 30–40% people on the internet and all the other people in India on top of that — that’s the space still have to work through?
Shobhit: I think that most of the internet consumers in India, get internet access through their telecom providers and their internet access is restricted to some value-added services that telecoms provide to them. It need not necessarily be the higher end of internet or video consumption and that’s more a habit that forms over time, and I feel people will get to it eventually.
Hatim: Is there any headline you can share on Hotstar, about the usage of the number of subscribers?
Shobhit: Especially with the IPL (The Indian Premier League of T20 Cricket) we can easily claim to be the largest video platform in the country from ‘a monthly active user base’ perspective. There was a huge celebration recently at Disney as well, since Hotstar crossed more than 300 million active users. The bottom line here is that this number is poised to grow, and this in no way represents the ceiling in the market size of India.
Hatim: What this also implies is that this can soon become 500 million, then 800 million and the entire population at some point of time, and a lot of these people are people coming onto the internet for the first time. I imagine just by virtue of how popular Hotstar is, how popular IPL is, and how popular episodic Bollywood content is, Hotstar is one of the first apps that a lot of people are using. Is this something that’s true?
Shobhit: I think when we try to split this into first-time internet users or users who are accustomed to the internet, each of them becomes aware of Hotstar from a different kind of source. So for first time Internet users, Hotstar is essentially an extension of bringing everything that Star has onto your mobile phone. By this I mean all of the Star TV shows, all of our sports, which also includes cricket, and that’s the way they perceive Hotstar, that this is a “TV on my mobile phone”. But the challenge is also to continuously extend the market or push the boundary, where Hotstar becomes the primary source of consumption. Not only do a lot of our users appreciate the benefit of non-appointment based viewing as opposed to Television — which by virtue of the linear format has forced the audience to view a certain piece of content at a pre-designated time — Hotstar gives them the flexibility to choose when to view and access to content that they might like the most, that’s where personalisation and recommendation comes in. We allow additional engagement which television could never have made possible. And if we look at what Hotstar has done with IPL, creating additional engagement via emojis, comments, games — it has changed the paradigms in terms of allowing the users to engage with these shows, it makes the mobile app the primary driver for consumption.
Hatim: We find that people are going to go a lot deeper in their own interest area on a mobile screen on an OTT than they would on TV — so do you feel that the kind of programming that would work on an OTT, in the long run, needs to be focused on a specific interest point? Or should it be more general to keep to the masses?
Shobhit: I agree 100%, this is where the future is. What our teams do on personalisation is to get people to watch more of what they are already watching and try to extend the depth of what they are watching. We try to make a guess and try out these different genres or categories of shows or movies that they might like. We are seeing a conversational shift within the Star network, where a whole lot of the insights from Hotstar are coming back to power programming and production for the Television network. Something we have noticed over the past few months, is that sometimes we see entire storylines changing based on engagement on Hotstar.
Hatim: One of the things we also touched upon is a lot of people using Hotstar for the first time, what are the things that Hotstar did to make itself more appealing and accessible to first time internet mobile video consumers?
Shobhit: There are mainly two things. The first and foremost is that the users don’t really care about the science or the engineering or the challenges that provide video streaming services bring with them — what users want is a seamless viewing experience. So a lot of has gone into making the streaming experience extremely smooth. We are giving you more bits per Mb and more value for every bit consumed, and that’s been a key motivating factor at Hotstar. We have invested significantly in technical infrastructure both for streaming and for content categorization.
Hatim: So it has been one of the big issues in India, handling that streaming.
Shobhit: Absolutely, India is a country where the network drops, the network changes, going from 4G to 3G and even 2G is common. Being resilient to external factors is extremely important for a platform like Hotstar to do well in the mass market. On the second level, it was recognising that we are reaching an audience that hasn’t experienced content on the Internet before and Internet content has predominantly been English — both in its communication and ability to engage with users. Looking at that, Hotstar bet heavily on ‘going vernacular and creating experiences’ where users could search for content without having to type it out in English — e.g. using Voice Search, or enabling our UI and UX to cater to regional languages; even cricket and Hotstar originals can be watched in 7 different languages. Then we took it a notch further. If you are a user and you have affinity to Tamil, then we launch the app directly for you in Tamil itself and it creates a ‘WOW’ Moment within the user’s mind. These efforts have been underway in Hotstar for almost a year, right from taking preferences around your language to all the other changes.
Hatim: A lot of people make comparisons between India and China, and the sense we get about China is that it is a huge market, but fairly homogenous in its language and the behaviour of its users. Do you feel that India is one market? Do you have to launch in each locale independently, or is it the same format that you can launch with in the entire country?
Shobhit: India as a whole exists as a summation of multiple pockets and users that exist within that. At some level, Hatim, it’s about what variable you pick to split it on. If you pick languages and culture then India has 20 different markets but in China, if you pick affinity to content as a hook, that will give you multiple different markets too. Interestingly, Hotstar does have some presence in China with our engineering teams and I visited there recently. Such nuances exist in that market too, every major market we want to be a part of, there will always be one key insight that will dictate how we want to target that market. In India that is around language and what kind of content does well, e.g. breaking news does very well users who speak Bengali, sports users are more loyal in the Southern states but these are minor variations, it all depends upon what variable is picked.
Hatim: At Soulskill, we always talk about what the future of content is going to be and what the Internet landscape is to going to be like; and one thing that we keep coming back to, which is very central to our way of looking at the future, is that Internet platforms will be consolidated around niches and there will platforms that will build audiences, and will also drive engagement by targeting a certain interest point. In Hotstar’s case, if Cricket is a topic point that you are leading in currently, the future of the platform would also be to double down on Cricket. Do you see it going in that sort of direction?
Shobhit: Yes and No. It’s ‘Yes’ in terms of looking at a pocket and identifying the biggest driver, and the answers to these questions completely change at the scale that Hotstar operates at. This is a company that thinks about, “What’s that one content that we can invest in that can engage 300 million users?”. No other platform asks such questions. Cricket, of course, was that for Hotstar and Star as a whole and we see that paying off. One of the best indicators of how Hotstar is thinking about this, is looking at some of the recent launches on our platform and how they can cater to the subscribers — and if you look at Hotstar VIP which encompasses live shows, all shows from Star channels; it gives you access to TV shows before television and it gives to access to Specials which are not available on Television at all. If you look at it, it seems like a mashup of three different segments, to turn users into paying subscribers. But what it also recognised is that even within these 3 seemingly different segments, there are significant overlaps and people are interested in crossing over.
Hatim: When you look at the market overall, how has this market been monetised? Clearly there’s a huge shift in the media landscape. I remember seeing these Mary Meeker presentations about the state of the internet, and for many years there was this graph that showed where the audience attention was. At first it shifted to the internet, but still, the spending was on print and television. Over time the spending caught up and shifted to the internet as well, and internationally Facebook and Google captured most of that market. Now we are seeing that shift to mobile. In India do you feel like it has taken longer than expected, and do you feel that there can be more monetisation in terms of advertisers’ interest that you can build on?
Shobhit: We are ahead of any slow down and the market is opening up significantly, and also finding avenues to advertise in a more targeted manner. Most advertisers care about reach and frequency, owing to the Startups and Companies that are engaged in Digital Marketing. So now the biggest brands in the country want to advertise on Digital Platforms, where they know that a highly engaged audience exists. There has been a paradigm shift in terms of how advertisers perceive Hotstar. Advertisers have been consistently looking for the ability to target the right set of audiences, at a set frequency and we are well poised to make that happen. Captive audience is the biggest differentiator between Hotstar and Facebook or Youtube due to the nature and category of our shows. This gives you access to a very lucrative high-affinity market.
Hatim: These are the numbers that I have heard, I don’t know how true or untrue they are because nobody from Youtube has told me these, so with that disclaimer, I have heard that Youtube is only able to monetize 30% of its video inventory in India. I have heard that the CPM rates have gone down to INR 9 per 1000 views, some of the lowest in the world — and the reason for this is that there was too much content on their platform and in India, brands are not spending as much. Do you feel that these are ‘Youtube’ problems or ‘India’ problems?
Shobhit: These are very Youtube specific problems because Youtube is a different kind of beast altogether, consider for a second the number of videos uploaded on Youtube on a daily basis. Every video goes on it directly without hindrance. This is the difference between an open platform and a curated platform like Hotstar, where you are dealing with limited content with an audience that is engaged in that content and that is the only thing that they get on that platform. If we truly want to make a comparison we should look at the top 10% of videos consumed on Youtube, and then compare that to Hotstar.
Hatim: What about other AVoDs (Advertising led Video-on-Demand platforms) is India? Do you feel there are too many AVoDs? Do you think that all of these businesses can sustain themselves or do you think there will be consolidation?
Shobhit: I do think there is going to be some kind of consolidation. As an advertiser, I want to be on the platform that offers me more reach and that by definition itself, seems to point to consolidation. The second lens to see it, is that you could have users coming to your platforms day in and day out but not much ROI can be extracted from every advertisement that you push out into the market if it is not reaching the correct audience. That’s where platforms with the best targeting gain an edge, and that is where technology needs to be built — and this needs a lot of research, development and investment from the company to educate our advertisers.
Hatim: I am convinced that it’s only a matter of time before all this technology is built out, and significant advertising interest comes onto online platforms, and that consumption shifts completely to OTTs. But even in the OTT Space there might not be many who will survive — I believe one would be Hotstar, but don’t know about the rest. Do you believe the same?
Shobhit: I am looking at a slightly different future, with Hotstar all the tech that is being created, the kind of synergy that Hotstar has with Star and Disney — and this will give it an edge over the competition over time. I haven’t seen a cohesive synergy between the TV world and the Digital world, the way I have seen coming to Hotstar. But each platform will look at building something similar.
Hatim: It might be something like Amazon anchoring on its Prime Program to drive video consumption, or Jio anchoring on its telecom services to try to push JioTV?
Shobhit: We can always look to the US for some of these tech-related answers. You look at how television ads are bid for and sold in the US, it is very different than how it works in India.
Hatim: Ok cool, I’m going to move to another set of very interesting questions. Coming back to user behaviour and the interest areas that they have. What is the thought behind the Hotstar initiatives on having the predictor games around Cricket matches, and the live commenting during Cricket matches? And what has been the result of these initiatives?
Shobhit: One of the things that they say at Hotstar is that “We believe we are trying to build the future of entertainment and the future of entertainment hasn’t been invented yet”, so our mission is always going to be to stay ahead and be on the bleeding edge of innovation. One of the bets Hotstar took last year around was that entertainment can be a dual experience — where it’s not just content consumption but also responding and expressing around this content. Cricket by its nature gave us the opportunity to first experiment with this, and all that we tried was a few forms of emojis and the watch and play game. Audiences that engaged with these features demonstrated a clear increase in time spent on the application compared to audiences that didn’t — and we built upon this further.
Hatim: Any number that you can share on how effective it was?
Shobhit: Overall we saw that these people were 30% more likely to come back and watch the next match. We powered the experience this year by allowing the people to express themselves further via comments, and if anyone goes to a typical Hotstar stream, you will get to see what the fans are saying. Most people are saying that “Dhoni is the best captain ever!” — that probably the most commented comment ever — but aside from that we have Kohli fans, people trash talking about Rohit Sharma, its everything possible that you can imagine! And it’s engagement that connects at an emotional level because you are expressing yourself around something that matters to you, and the audience around you is responding to it. It’s a whole different engagement paradigm that's been created.
Hatim: Coming to a final topic, since Disney has become the beneficial owner of Hotstar, how soon do you see Hotstar content going international?
Shobhit: So first of all — for purely Indian content — we cannot underestimate the Indian diaspora which is spread everywhere. But beyond that, the idea is that you want to be an open delivery platform with various content types, and you want to be a platform which allows users to come in and select whatever they want — whether they from India, South Korea or China. Users don’t care where it came from, they just care if its engaging or not. These are times when you can observe that where there will be users from diverse locales, that are interested in Japanese Anime shows; or users interested in British comedy shows; or something completely different. We are already present in the UK, US and Canada at this time — primarily with our current catalogue, but what we can expect soon from Hotstar is a “One World One App” Vision, where all streaming content and user engagement goes out over the world brings with it the monetization capabilities that Hotstar has.
Hatim: And then it is indeed great for you to partner with content creators in India — the idea is to take all of them international?
Shobhit: From a stakeholders perspective, if you as a content creator believe that Hotstar is best poised to monetize this content for you, then you would want to go to Hotstar regardless of the geography.
Hatim: Thanks a lot Shobhit, I really enjoyed this and I definitely feel smarter having had this conversation. Thanks for sharing your insights and thoughts and for being here!
Shobhit: Thanks for having me!
