Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

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In the 1980s, the few Indian homes that had a TV almost always tuned into the news on Doordarshan, the country’s only broadcaster. Those bulletins were formal, gentle affairs. Among the iconic anchors of this pre-privatisation era was Salma Sultan, famous for her soft voice and the rose always tucked in her hair.

Today, things are a lot different. There are more TV channels than we know what to do with. News bulletins have been replaced with nightly “debates”. Fiction often enters the newsroom. But one fixture remains: the anchor.

You may long for the staid anchors of the ‘80s. Or perhaps you prefer the flashier ones that started dominating news channels from the 2000s.

But nowadays, there’s a brand-new type of news anchor that’s getting popular: one generated by AI.

Can AI anchors fix TV news?

India Today/YouTube

At last week’s India Today Conclave in Mumbai, India Today Group’s vice chairperson Kalli Purie made an announcement.

“In March this year, we added the newest member of our team,” she said. “The first one that we did not hire in 48 years. We created from scratch our first AI anchor, Sana. Sana has done over 200 hours of programming across different genres, languages, and platforms.”

Sana, the AI anchor, then introduced India Today’s “AI family” — five AI-generated anchors speaking five languages, including English. Fun fact: all their names have ‘AI’ in them – Naina, Aina, Aishwarya, Saili and Jai.

Since March this year, the India Today Group’s Hindi news channel Aaj Tak has been heavily experimenting with AI news presenters. These anchors are interviewing film stars and presenting news bulletins in various Indian languages. The YouTube channel Aajtak AI has over 4,500 subscribers and almost 700,000 views since March this year.

Then, last month, Aaj Tak debuted an AI avatar of its star Hindi anchor, Anjana Om Kashyap.

Aaj Tak isn’t alone. In July, Kannada channel Power TV launched an AI anchor named Soundarya, while Odia TV channel OTV introduced Lisa.

Why are the India Today Group and other news networks introducing AI-generated hosts?

Kashyap has one answer. “Elections are coming. I will be busy field reporting from various constituencies, interviewing people. I will need a partner just like me. Now, I can do Halla Bol, Special Report, and many other shows all at once.”

Although it’s very early days, AI may help star anchors do everything everywhere all at once. But are anchors, and journalists aspiring to be one, ready for direct competition with AI?

Legal Loopholes

Under current Indian laws, media professionals, including actors, writers, and journalists, may not have adequate protection from being replaced by AI-generated doppelgangers, according to Ameet Datta, intellectual property lawyer and senior partner at law firm Saikrishna & Associates.

“India does not have any majority judgement or statutory provision to support the right to publicity,” he told The Impression. The right to publicity is an individual’s right to protect their personal image and brand and make money off it. Indian laws do not explicitly identify this as a right. At best, our courts accept legal protection from “passing off” under trademark laws, Datta says. “You can’t ride on someone else’s reputation. So, for example, using Amitabh Bachchan’s name and likeness to sell a pen or a calculator violates the law because you’re ‘passing off’ his status as an endorsement for the product.”

What this means: if you have used your name or likeness for commercial purposes, say to endorse a brand, you may have a case for protecting it. That, too, comes with caveats. Copyright laws have provisions that allow people to use protected material under ‘fair use’, such as journalism and satire.

Actors Anil Kapoor and Amitabh Bachchan have also secured copyright protection of their name, image, voice, and likeness — they cannot be used without consent in ads or other commercial pursuits but can be used for parody or satire. That’s where AI also comes into the picture.

Take Anil Kapoor, for example. Last month, the Delhi High Court granted legal protection to his name and even his catchphrase “jhakaas” (Marathi slang for ‘awesome’)—not for the word outright, but only when said in his signature style. Justice Pratibha Singh also banned the use of AI to use Kapoor’s image to make GIFs and other common media for monetary gains. She noted that AI-generated content, such as deepfakes, can hurt a celebrity’s reputation and violate their right to privacy, which is a fundamental right.

But getting legal protection for what you are famous for isn’t so straightforward.

“Actors like Anil Kapoor ask to protect their likeness in a movie character, like Mr India,” Datta says. “But do they own the copyright of their appearance and character in that film? It could be argued that this is the property of the film’s producer, not the actor.”

How might these deficiencies in the law affect news anchors? To prevent a news channel (or anyone else) from using their AI avatar, they will also have to seek legal protection from the courts for specific aspects of their likeness that are signature to them. Only actors have received such protection so far because they use their names and faces for endorsements. News anchors may need to come up with a new set of arguments for why they deserve similar protection.

Moreover, many news anchors may have signed away the rights to their likeness to their employers or may not have a clause regarding this in their contracts. Generally, media companies claim copyright ownership of all their journalists’ work. Wouldn’t videos of an anchor hosting a news show also qualify? A channel could legally use this material to create AI copies of their anchors or train their AI models to generate more members of their ‘AI family’ of anchors.

Kalli Purie and Anjana Om Kashyap did not respond to my requests for comments.

It’s ironic to watch Kashyap excitedly introduce her own AI avatar to take over the work she is too busy to do. Compare this with the striking actors of Hollywood’s SAG-AFTRA union. Among their demands was that studios must not scan the likeness of background actors to be used forever without consent or future compensation. Background actors in big-budget productions like Disney’s The Mandalorian said they felt violated after being scanned on sets and never getting called for work again.

Not There Yet

Star anchors may be able to hold on to their jobs and audience through the rise of AI. The bigger benefit of AI-generated anchors could lie in replacing human hires forever. But for now, anchors aren’t too worried.

“It’s early days. Of the AI anchors I’ve seen and heard so far, they’re still not quite there,” Mangalam Maloo, assistant editor and anchor with CNBC-TV18, told The Impression. “One will have to wait for more iterations of the same before they’re actually on-air ready. On a lighter note, given the current salaries in media, the amount of investment it will take to develop that AI anchor now, we’ll get many real anchors at a much lower cost.”

Maloo also added that AI anchors could take over “commoditised work”, leaving editors and news producers more time to focus on more onerous projects in the newsroom.

Tejasvita Singh, an anchor on CNN-News18, agrees. “One window for using an AI anchor is in news bulletins that are broadcast late at night, when we don’t have live news,” she told The Impression. “In these programmes, an anchor usually reads out pre-written story summaries from a teleprompter. That is a job an AI anchor could do well.”

Singh points out another use case for AI anchors: “fake lives”. News channels are known to record an interview with a guest, but edit it for a primetime programme so that it appears to be a live interview. The anchor simply asks questions again and snippets of the interview are played in response. Instead of a human anchor, an AI replacement could repeat these questions when the interview goes “live”, Singh says. Writer Devdutt Pattanaik recently took issue with this practice when India Today played an edited version of his pre-recorded interview as a debate with economist Sanjeev Sanyal, who was live.

However, some journalists just starting out as anchors feel the role and visibility of the profession is slowly changing across newsrooms. “This [news anchoring] is already a depleted role,” Singh says. “In many news programmes now, the anchor’s voice may be heard but the camera isn’t always focused on them. News studios sometimes use such zoomed-out angles that the anchor is barely visible. In those instances, an ordinary viewer may not be able to tell an AI anchor apart from a human one.”

Despite the doppelgangers, star anchors may not be as threatened by replacement with AI. But mid- and early-career anchors who are trying to cultivate a public image and recognition may find themselves redundant if they are relegated to programmes in odd time slots.

Maloo also says smart reporters who know how to add value in a news report will be able to hold the threat off.

All this comes with the assumption that channels won’t misuse AI anchors or avatars of existing hosts. What if your AI avatar read out news in a derogatory manner, or worse, said something on-air that goes against the country’s laws? According to Datta, journalists and news channels aren’t even considering such possibilities, let alone planning for them.

According to reporters I spoke to on- and off-record, TV journalists aren’t worrying about AI anchors just yet. There are bigger problems plaguing the news business. The news genre isn’t growing even as TV viewership declines among younger, urban, affluent audiences, as per data from the FICCI-EY Media & Entertainment report 2023 (pdf). Besides, ad revenues for TV channels are also stagnating, while several large consumer brands are keeping away from them altogether, citing ‘toxic’ content and an ideological slant in their coverage.

News channels need a new gimmick to grab attention. AI anchors come with an upfront investment. But in the long run, they could help legacy media companies grab eyeballs while cutting costs. In the absence of formal unions or explicit legal protections, there is little that Indian newsroom employees will be able to do to prevent all of this. Some may benefit, but many may see their roles reduced or simply replaced.

How many years will it be before someone resurrects a young Salma Sultan to read us the news again, a fresh rose tucked in her hair?

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Tenor

Pay and Skip: Meta may launch ad-free versions of Facebook and Instagram in India for a subscription plan next year, Livemint reported. It’s already planning an ad-free pilot in Europe for €10/month to compensate for the revenue it may lose from regulations curbing personalised ads. Marketing agencies and brands that heavily rely on digital advertising say they may have to start thinking about their next steps. Although, given India is known for a high-volume, low-average revenue user base, nobody needs to panic just yet.

What were they thinking?: Meanwhile, Meta rolled out AI stickers across its family of apps late last month. But it looks like no one thought to place restrictions on the feature. Facebook users are reportedly using AI text-to-image prompts to generate irreverent (and rather lewd) stickers to share in direct messages. Specimens include various children’s cartoon characters armed with assault rifles or heavily pregnant and well-endowed versions of Elon Musk and Karl Marx 😵

Suitors line up: Disney is knocking on all doors, Star India in hand. PE firm Blackrock is reportedly in talks to buy out Disney’s India operations, including TV and the streaming platform Hotstar. Earlier, Bloomberg reported Disney officials were in talks with Mukesh Ambani’s Reliance Industries, as well as the Adani Group and Sun TV.

Holding off the Yanks: European networks are uniting to hold off competition from Netflix and Amazon Prime. Eight publicly funded broadcasters have formed a ‘New8’ pact to produce high-end TV shows and distribute them worldwide. New8 will start with eight originals in the next three years. Several Netflix originals made in Europe have become big international hits, including Money Heist (Spain), Dark (Germany), and Lupin (France).

Trumpet 🎺

@profcgoldin/X

It is now stupidly easy to spread fake news on X/Twitter. On October 10, leading news organisations reported that Nobel Prize-winning economist Amartya Sen had died. All reports led to one post, seemingly from the official account of Claudia Goldin, who just won the economics Nobel herself.

Turns out, the account was fake (this is her real account, inactive for many years now). Meanwhile, the fake news poster claimed to be a hoax created by Italian school teacher Tommaso De Benedetti, although this hasn’t been verified either.

@profcgoldin/X

More than a decade ago, De Benedetti became famous for tweeting fake news (such as the death of the Pope) and impersonating world leaders (such as Syrian president Bashar al-Assad). Before that, he fooled Italian newspapers into publishing fake interviews with famous American authors. This 2012 piece in The Guardian details his exploits.

De Benedetti claimed he does it to expose “weak” news media and demonstrate how unreliable social media can be.

The situation has only worsened in the last 10 years.

Now that anyone can buy verification on X, it’s exponentially easier to pass off fake news for real. The Goldin impersonator didn’t even use a blue tick; all it had to do to be taken seriously was add “official account” to its bio. The Times of India (archive link), Zee News (archive link), and Deccan Herald (archive link), among many others, reproduced the news without fact-checking it.

Meanwhile, the fake Goldin has deleted all their tweets and changed their name to ‘Gatto di Pino’ with a profile picture of a tuxedo cat. Perhaps it is an Italian reference to Figaro, the cat who belonged to Pinocchio: the puppet whose nose got longer every time he lied.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

The 2010s were a good time to do sketch comedy on YouTube. A number of channels dedicated to jokes and skits about the vagaries of life soon morphed into multi-channel networks (MCNs) and, eventually, full-fledged production studios, thanks to streaming. Once Netflix opened shop in India in 2016 and more platforms followed suit, there was a tsunami of original films and shows online. That demand fuelled the rise of companies like Pocket Aces, which ran popular YouTube channels like FilterCopy and later produced the hit show Little Things.

This party is now ending. Last week, the music label Saregama India announced (pdf) it was acquiring a majority stake in Pocket Aces for ₹174 crore (~$20.9 million) and will buy another 41% in the next 15 months. This deal values Pocket Aces at roughly ₹335 crore (~$40 million), lower than the $53 million valuation it raised at in 2019.

An exit is still good news for Pocket Aces’ investors, including Peak XV Partners (formerly Sequoia India) and 3One4 Capital. But Pocket Aces’ story shows us two things: one, that the YouTube MCN model has only so much value and two, not every YouTube channel can morph into a successful production studio.

Pocket Aces’ Pocketful of Dreams

Photo by Joshua Rawson-Harris on Unsplash

When Netflix and Amazon Prime Video first began commissioning original content in India, they went to established film studios in Mumbai, such as Farhan Akhtar’s Excel Entertainment (Mirzapur) and the indie-film powerhouse Phantom (Sacred Games). Soon enough, platforms figured out that they need more than just slow, dark, gritty shows to pull older viewers from TV and younger ones from YouTube.

Pocket Aces grabbed the opportunity with both hands. While these ‘prestige’ streaming shows were getting made, Pocket Aces was growing into a successful multi-channel network (MCN), building a massive audience on YouTube with relatable sketches, especially about young love (such as the pangs of school romance or the pain of being single). FilterCopy’s hold over young, affluent, urban Indians culminated in the hit show Little Things, which is about a live-in couple. Netflix India acquired the show later. Since then, Pocket Aces and its sub-brands have made light, fun, family-appropriate shows that were tailor-made for its young target audience. These included Crushed (2022) and Adulting (2018), both streaming on Amazon miniTV, and Ghar Waapsi (2022) on Disney+Hotstar.

However, YouTube remained central to Pocket Aces’ success, even after producing successful streaming originals. In 2020, the company said it crossed over a billion views a month for all its shows, mostly from the millions of followers on its YouTube channels. On the back of these views, it began making content for advertising clients such as PepsiCo and Hyundai. At the time, half of Pocket Aces’ revenues came from these advertising deals.

But this success never showed in the company’s financials. Pocket Aces’ revenue has been growing steadily. It closed FY22 with over ₹97 crore (~$11.65 million) in revenue from operations, and Saregama said this number stood at ₹104 crore (~$12.5 million) in FY23. However, filings show the company hasn’t made profits since at least 2015. Starting with a modest ₹19 lakh in FY15, Pocket Aces’ losses rose to just under ₹8 crore in FY18, then more than doubled to over ₹18 crore in FY19. It made losses worth ₹51 crore in FY21. Then, they fell sharply to ₹5.9 crore in FY22. As late as February this year, the company was cutting losses and laying off people while looking for someone to acquire the company.

Pocket Aces’ co-founder and CEO Aditi Shrivastava did not respond to a request for comment.

What wasn’t working for Pocket Aces? While it caught the OTT wave just in time, the studio could not evolve to become like bigger rivals such as the Birla group’s Applause Entertainment (Scam 1992, Criminal Justice). It kept making relatable, light-hearted entertainment with fresh faces but not large-scale, big-budget ‘prestige’ shows that a streaming platform could market as its flagship hit. Besides, several of its recent hit shows were on the ad-supported, mass-entertainment platform Amazon miniTV (now merging with Prime Video).

“When you start making more and more shows in a very short timeline and tight budget, it is very difficult to make good margins,” a senior writer in the streaming industry told The Impression, requesting anonymity. “Platforms like Amazon miniTV have very tight budgets, make shorter-episode shows, and prioritise quantity over quality because they are making money from ads. So, a five-episode series that could take a year or more to make will get written, shot, edited, and released in just a few months. Ultimately, you are on a treadmill. To make money as a production house, you will have to keep churning out shows like these at an unsustainable pace. Is there even demand for that many shows which may not have a clear USP or novelty factor?”

Evolve or Perish

Compare this with rival TVF. It, too, started with sketch comedy on YouTube, appealing to teens and young adults in urban India. And it also raised its last major round of funding in 2019. However, TVF translated its comedy to cult classic shows starting way back in 2015 with TVF Pitchers, often compared to HBO’s Silicon Valley. Since then, it has made hit shows like Panchayat (Amazon Prime Video), Aspirants and Gullak (SonyLIV), Kota Factory (Netflix), and Hostel Daze (Amazon Prime Video). From its urban comedy about family, friends, and love, TVF expanded to a bigger budget studio with shows across the social milieu, tapping into nostalgia of the 1990s’ golden age of television while picking themes that resonate with chronically online students and young adults. TVF also doesn’t sell its shows; it licences the IP to bidding platforms and usually does so only after releasing the first season of its show on YouTube for free. Besides, it has now launched a feature films division.

But even after getting acquired, Pocket Aces is not likely to pivot to this sort of content.

In the stock exchange filing announcing the deal, Saregama said it will use Pocket Aces’ 95 million collective YouTube followers to “further popularise its music library among the 18-35 audience segment” (pdf). There is a passing mention of creating “synergies'' between the two companies in managing influencers and creating longform video content. Remember, Saregama has its own movie division named Yoodlee Films, but the company has been going slow on it. In May, managing director Vikram Mehra told investors (pdf) that he won’t put in more than 18% of the company’s total capital in films.

Amassing a massive YouTube audience is a good starting point for an aspiring production house, but it is no longer enough. Many more independent studios and individual producers are competing to make content for streaming today. Meanwhile, platforms are tightening budgets and acquiring cheaper content for ad-funded subscription tiers.

All this is leading to a content glut, and it is harder for the multi-channel networks of the 2010s to make money from this business. Others from that time have also slowly faded away. For instance, Rainshine Entertainment acquired Culture Machine, backed by Tiger Global and Times Internet, in 2019. Creator Tanmay Bhat has a multi-channel network of its own, but he is also making money creating professional ads for clients like CRED, Lenskart, and Shark Tank India. Even globally, the MCN business model has had limited success.

So, what can a 2010s YouTuber do? There are two options. Evolve and become a full-fledged production studio that can compete with legacy rivals. Or find a bigger one who can acquire you for the only real asset you have – a YouTube audience.

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Tenor

X vs X: You can’t make this up. A Florida-based marketing agency called X Social Media is suing Elon Musk’s social media company X Corp, formerly Twitter, for trademark violation. X Social Media claims it owns the brand name ‘X’ since 2016 and that Musk’s Twitter rebranding has confused its potential clients and caused a loss of potential revenue. Musk bought back the domain name X.com from PayPal in 2017 – it is now the new address for Twitter.

Gagged: The Delhi Police has arrested Prabir Purkayastha, founder of the news portal NewsClick, under the non-bailable Unlawful Activities (Prevention) Act (UAPA). NewsClick allegedly took funding from people associated with the Chinese government. The police also raided the homes of several journalists and contributors who worked for the company and confiscated their electronic devices. The New York Times had first reported that NewsClick may be linked to Neville Roy Singham, an American businessman accused of fuelling Chinese government propaganda. Meanwhile, in the US, a police chief was suspended for raiding a local Kansas newspaper.

No free scrolls: Social media companies want need you to start paying up. X (formerly Twitter) has signed a deal with celebrity heiress Paris Hilton to create live shopping videos for the platform. Meta is planning to offer Facebook and Instagram free of ads in the EU for $14/month. Meanwhile, TikTok is testing an ad-free subscription tier that may cost $4.99 a month.

Boxed and bagged: Letterboxd, the film reviews website that shot to fame during the pandemic with candid reviews from movie and TV stars, has been acquired for over $50 million. The company also owns a film magazine and a podcast, and competes with IMDb, which Amazon acquired in 1998 for an undisclosed amount. It now forms the backbone of Amazon Prime Video.

Trumpet 🎺

Twitter tweet

Would you still laugh at a meme if you knew it was also an ad?

Like this one floating about on X for a few days now. Although Subway India has not officially confirmed it, this office chat screenshot with the (slightly unnecessary) reference to Subway is probably an ad for the fast food chain.

This isn’t the first such instance of ‘stealth ads’ found on X. Just last week, fintech firm CRED began trending when meme pages shared videos of strange cars leaving the company’s Bengaluru office. Turns out the entire exercise was an ad for their newly launched service, CRED Garage. And last year, this tweet featuring a girl sobbing about a breakup went viral, but it was merely a promo for a sale on the fashion e-commerce site Myntra.

Brands targeting urban, affluent, younger consumers are getting a little carried away in making their pre-buzz marketing or meme marketing campaigns as ‘organic’ as possible. Memes are a great way to get on top of an audience’s mind, given that attention and engagement drops on posts that are clearly marked as ads. Is it okay then to create original content instead, share it with meme pages and creators, and flood a platform with no disclaimers whatsoever?

For one, India’s Advertising Standards Council of India will object to this tactic. More than two years ago, the industry body asked all social media influencers to publicly disclose any promotional content and label it prominently using hashtags such as ‘paid partnership’. Clearly, no one is paying attention to the rules.

Even if brands are able to escape ASCI’s watch, there are plenty of savvy online users who recognise such ‘stealth ads’ and call them out. One new way people are doing this in Hindi is writing “aaj admin paneer khayega” (today, the admin will have paneer), or simply “paneer post” in the comments under an obvious ‘stealth ad’. The paneer reference is a Hindi-heartland joke about getting paid well enough to afford paneer for a day. It’s a gentle but effective reminder to influencers that their audience knows when they’re trying to sneak in paid promotions in their feeds.

There’s no point to a ‘stealth ad’ if your audience can easily recognise it, is there? One could argue that doesn’t matter. As long the meme is good enough (or weird enough) to go viral, the stealth ad has done its job. The haters can grumble, but everybody – the brand, the influencer, and the agencies involved – gets to have paneer for the day.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

Those who grew up bingeing the thrilling, if slightly sleazy, episodes of crime shows may instantly recognise the line “savdhaan rahein, satark rahein” (stay vigilant, stay alert). Actor Anup Soni, host of Sony’s runaway 2000s hit Crime Patrol, is a regular fixture in the Indian true crime genre; before turning host, he played ACP Ajatshatru on Sony’s CID, once India’s longest-running TV show. Soni became so intertwined with Hindi-speaking viewers’ idea of true crime that in 2021, he got himself certified as a crime scene investigator.

But while all the adulation turned these, and later Savdhaan India, into widely watched shows, it couldn’t rescue their image as pulpy, often poorly-written, guilty pleasures.

In this stand-up set, comedian Abhishek Upamanyu described Crime Patrol as the perfect escape when life isn’t going well. But the point of his jokes is just how ridiculous the show really is.

Can Indian true crime get the sort of serious, investigative aura that award-winning American documentaries have? India’s streaming executives and filmmakers think so. But it will involve slowly changing the way both filmmakers and fans of true crime think.

Inside Indian true crime’s ‘elevated’ era

Photo by Maxim Hopman on Unsplash

Early Indian streaming originals focused on being ‘gritty’ and ‘dark’ to woo an audience bored of vanilla TV. Crime fiction became big after hits like Sacred Games and Mirzapur. And even today, stories of crime are everybody’s go-to. When JioCinema launched its originals slate earlier this year, it focused heavily on crime thrillers. Crime dominated this year’s most-watched Indian originals (pdf).

This has given platforms confidence to experiment with a format Indians barely watch: documentaries. Since the pandemic, there’s been a steady rise in true crime docu-series, starting with early hits such as India-focused American production Wild Wild Country. Netflix and Discovery+ have been leading in this genre, although Disney+ Hotstar released Behind Closed Doors on Aarushi Talwar’s murder case in 2019 and Prime Video released Dancing On The Grave earlier this year.

These shows aren’t anything like Crime Patrol or Savdhaan India. Like their American counterparts, they rely on a narrator, interviews, archival footage, and a sprinkling of dramatic recreations. Among premium viewers used to bingeing American content on Netflix, there’s keen interest in investigative, journalism-style, true-crime documentaries. And so, there’s a clear divide in true crime available online and what airs on TV.

“When networks like ours entered, the true crime genre was very America-centric,” Warner Bros. Discovery’s (WBD’s) Sai Abishek told The Impression. He is the head of the factual and lifestyle cluster for South Asia at the company. “In OTT, we started doing these premium, in-depth shows. People want to see the story unravelled in an episodic manner. So, on the Discovery channel, we don’t commission true crime at all. This genre is commissioned entirely on OTT.”

WBD also runs the TV channel Investigations Discovery, but it doesn’t have local programming on it at all. It airs reruns of American true crime dubbed in local languages.

So, who’s watching true crime in India?

Elevated Guilty Pleasures

The traditional true crime viewer is women; these shows help them study the motives for crimes against women and empathise with (overwhelmingly) female victims. But in India, that’s not always the case.

True crime on TV is played on general entertainment channels that are targeted at women, but streaming platforms find that far more men stream their original documentaries in India.

“Discovery+ is heavily male skewed,” WBD’s Abishek says. “More than 70% of the audience is men. When we started doing true crime, we got heavy traction with both men and women, but of course with more men because of the nature of the platform.” This audience can be even more male skewed for sub-genres of true crime, such as shows made on white collar criminals.

What has helped deliver hits is documentaries on crimes of passion; among Discovery’s successful shows is the franchise Love Kills.

Suddenly, true crime went from shady shows for guilty pleasure to an elevated art form, something you can recommend to family and friends. “These shows were more journalistic in style, which made the genre not so lowbrow anymore,” a senior executive in the streaming business told The Impression on condition of anonymity since she’s not authorised to speak to the media. “There has been a shift from low budget production, bad actors. and poor writing. It has changed the way audiences look at true crime. There’s now a certain premium-ness to it.”

Still, to suit Indian tastes, platforms still have to rely on techniques of fictional filmmaking and keep things a little less journalistic and a little more exciting. “The viewers have quickly evolved,” WBD’s Abishek says. “We try to make it in an HBO-style, ‘unravelling investigative’ way. Even our approach to documentaries has evolved over time: it’s more cinematic and we do reconstructions with actors.”

Some filmmakers, keen to dig into a crime with journalistic vigour, say the audience may not be entirely sold on that treatment. “Take Indian Predator: Murder In The Courtroom, for example,” documentary filmmaker Arpita De tells The Impression. “It tapped into what audiences want. They’re not ready for ‘full-on’ documentaries: this show has a lot of dramatisation but it worked because it was beautifully done. House Of Secrets: The Burari Deaths also kept honing in on the intrigue of mass suicide and the disgust from the visual of hanging family members. Indian true crime documentaries tend to play with linearity and dramatise the story.”

Storytelling Difficulties

True crime content can be a cheap production or a very expensive one, depending on what one is aiming for. These shows can be easy to conceptualise and produce because a story is already available. “All you need is to narrate how the criminal got caught, how people reacted, and not much else,” says the streaming executive quoted above. “Most American true crime shows on TV aren’t exactly narrative masterpieces.”

With relatively lower effort and lots of dramatic recreations to replace research, a platform can quickly churn out several true crime shows. But that’s not what the likes of Netflix and Discovery are going for in India.

Instead of cheap and easy, platforms are putting money to get fewer, but more detailed true crime documentaries. For instance, Vice India’s production My Daughter Joined A Cult, released on Discovery+, took more than four years to make. It’s a good example of the kind of challenges true crime documentary makers face, particularly in India.

“There was a character who we knew had leaked the tapes on Swami Nithyananda and planted the [hidden] camera,” Naman Saraiya, the show’s director, tells The Impression. “I was in touch with him. First, he vetted us through other journalists, then met us after four months. Another lady got me access to three other people associated with the cult. But I had to spend months having dosa and filter coffee with her before I finally got to interview her for just two hours. Of that, I used maybe two minutes in the final cut. The process is intense.”

WBD’s Abishek says My Daughter… did well for Discovery+ because it was “access-based” storytelling that featured plenty of such interviews. But the keyword here is ‘access’. Filmmakers say, in many cases, they drop the subject of a documentary altogether because access to the main people involved is just not possible. For instance, Arpita De was working on a documentary on KD Kempamma aka Cyanide Mallika, India’s first convicted female serial killer. “We got access to her lawyer and copies of judgements passed in her case. But we couldn’t get access to her for an interview,” De says. Kempamma is serving a life sentence in Bengaluru Central Jail. Meanwhile, American filmmakers often have an edge because the US tends to have plenty of news footage and filming is allowed in some courtrooms in the country.

Filmmakers face other hurdles while making true crime documentaries. These shows are vulnerable to criminal defamation lawsuits, often from people related to the featured crime who are aggrieved at how they’re portrayed.

“People love to send [legal] notices in the crime genre,” WBD’s Sai Abishek says. “We’ve got a lot of notices from people despite them giving us release [forms]. We have notices from petty gangsters who have bumped people off. You have to make sure with your legal team that as a network you are protected and the people who worked on this with you are protected.” He added that legal costs can add up to true crime shows’ budgets.

Is this only an access and journalism problem? Not entirely. Abishek says there’s a dearth of experienced professionals who understand how to helm a complex true crime series. Then, there are limits imposed by platforms keen to avoid protests and government action against their content.

“Good, true crime stories explore themes like sexism, racism, caste-based divisions,” says De. “But in India, most platforms are scared to talk about these. They are worried about losing their audience so you can’t talk about these issues.”

Will this kind of investigative true crime ever gain the kind of mass appeal here that it has in western markets? Perhaps not. ‘Lowbrow’ Indian true crime is popular on TV but well-paying advertisers tend to avoid the genre because families don’t watch such shows together. “These shows may have references to gore, violence, sex, and affairs,” says the streaming executive quoted above. “That’s hardly friendly to an ad for Dove soap or some washing liquid.”

The majority of advertising money in TV in the 2000s came from consumer conglomerates like Reckitt Benckiser (Dettol, Harpic) and Hindustan Unilever (Fair & Lovely, Lux, Rin, Dove, and more). These companies still dominate TV advertising and in the heydays of saas bahu soaps, they had plenty of competing shows to choose from to reach their target audience: women. Even today, advertisers prefer reality TV shows such as KBC, Bigg Boss, and a slew of dancing and singing competitions. Meanwhile, major broadcasters have been ambivalent about the fate of true crime on TV for over a decade.

As for the ‘highbrow’ stuff, it competes with a barrage of critically acclaimed and popular shows from the US for the same audience—premium, urban Indians. These shows may drive subscription and engagement, but detailed interviews and gritty reconstructions in the backdrop of social issues may not interest regular folks looking for light entertainment. They’ll probably do better with crime fiction, of which there is no dearth. Meanwhile, ‘elevated’ true crime may remain the pleasure of a discerning few.

Correction: An earlier edition of this story incorrectly stated that Indian Predator is available on Discovery+. It is a Netflix show. Also, Investigations Discovery does not run Vijay Anand’s ‘Tehkikaat’ but a local package of crime-related shows that Investigations Discovery puts together under this name.

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Photo by Chris Long on Unsplash

Workers’ victory: Striking Hollywood writers finally have a three-year deal from studios. Among the concessions offered are minimum annual pay hikes and residuals paid to writers when a streaming show is watched by more than 20% of the domestic subscriber base within three months of release. The studios also agreed to ban the use of AI for writing and rewriting original material. These and other concessions will force streaming platforms to change the way they operate in the US. The deal is expected to be ratified next week.

No more ‘jhakaas’: Actor Anil Kapoor, best known for his exuberant catchphrase “jhakaas” (roughly: awesome, in Marathi), now has legal protection for it. The Delhi High Court ruled that Kapoor’s name, image, voice, and dialogues can’t be used for commercial gains. As more people use generative AI tools, actors and artists are rushing to court to protect themselves from copyright infringement. Last year, actor Amitabh Bachchan got similar legal protections for his name and voice. But there are worries that in protecting personality rights, the courts may end up stifling creative expression.

AI action intensifies: Big Tech is spending big billions in the AI race. This week, Amazon announced a $4 billion investment in Anthropic AI. Meanwhile, chatGPT maker OpenAI is exploring a fundraise at a valuation of $90 billion, triple of what it was last year. Despite ongoing lawsuits against generative AI, there’s a rush to roll out tools for businesses. Stock images company Getty is promising AI-generated images free of copyright violations, and OpenAI has added voice and image capabilities to ChatGPT.

Gokuldham Games: The makers of India’s longest running sitcom, Taarak Mehta Ka Ooltah Chashmah, are adapting the show to games and animated content. The production house will spend ₹24 crore (~$2.9 million) on the project.

Trumpet 🎺

Twitter tweet

If you haven’t been following the ‘Humans of…’ saga online, this tweet is a great starting point. Here’s what happened: social media handle Humans of Bombay (HoB) has sued new rival People of India (PoI) for copyright infringement. In its complaint (here’s a copy), HoB alleged that PoI copied its content by approaching the people featured and recreating images and stories.

HoB also claimed that PoI “replicated” its business model. People online are skewering HoB and founder Karishma Mehta over this claim. The format of photographing somebody and narrating an incident from their life in the caption is something photographer Brandon Stanton started with Humans of New York back in 2010. He criticised Mehta too for claiming copyright infringement on an idea he alleges she stole from him, all for the love of profit, not ‘art’.

So, how much does Humans of Bombay profit from its ‘art’? Company filings show that HoB made ₹6.37 crore (~$760,000) in revenue from operations in FY22, nearly a 2x jump from the previous year. Most of the money came from social media marketing services (and some from selling books). There’s also a rate card of how much HoB charges advertisers floating around.

HoB made ₹3.17 crore (~$380,000) in profits after tax, a solid 50% net profit margin. Most of the company’s costs were salaries. Meanwhile, PoI was only incorporated in January this year in Bhopal, Madhya Pradesh with ₹15 lakh (~$18,000) as paid up capital.

Now, HoB’s model doesn’t seem unique. This is how countless meme pages, Twitter handles, Facebook groups, podcasts, and YouTube channels make money.

But how this case plays out may have a big impact on social media’s rampant copyright infringement issues. So many meme pages and YouTube satirists make their living building on others’ original content. Is it ethical to use somebody’s Reel, edit it, and turn it into a meme? That’s how creator Ishaan Ali’s video gave rise to this famous meme. YouTubers like Tanmay Bhat get called out for their ‘react’ videos, and you’ll be hard pressed to find a satirical movie review of a Yash Raj film.

Memes, by definition, can’t be copyrighted. But does somebody’s inspiring story (real or otherwise) qualify? A High Court judgement may answer this soon. The Delhi High Court will next hear HoB vs PoI in early October.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

A quick note: we’re taking next Tuesday (September 19) off for Ganesh Chaturthi, so there won’t be an edition of The Impression next week. I’ll be back on September 27.

Investors of Indian internet companies have been talking about ‘India vs Bharat’ long before politicians got in on the act. Forget Meta and Google’s dominance over the Indian internet; these believers say there’s money to be made not from ‘India’ but from users in ‘Bharat’, aka the sea of middle- and lower-income Indians who live humble lives in small towns.

But there’s little consensus on who these users are. Some say anyone outside of Delhi-Mumbai-Bangalore counts as part of ‘Bharat’. But given these cities run on the labour of massive working-class populations, that doesn’t seem right. Besides, a rich business owner in cities like Lucknow and Chennai or even small towns is hardly a ‘Bharat’ user.

So, who are social media apps targeting ‘Bharat’ really building for? And do these so-called ‘Bharat’ users even want their own social media?

Why Indian social media needs ‘Bharat’

Photo by Rachit Tank on Unsplash

Koo is among those homegrown internet companies claiming to build for ‘Bharat’. The social media platform is a Twitter alternative for “Bharat’ users in their language. But this wasn’t founder Aprameya Radhakrishna’s first such pitch.

Before Koo, there was Vokal. The app, founded in 2016, is an Indian language version of Quora where users ask questions of all kinds, and the community answers them. Vokal pitched itself as a ‘P2P info-sharing space for Bharat ’.

Then, in 2020, Vokal’s parent firm Bombinate Technologies launched Koo, an Indian language version of Twitter (now X), complete with the pigeon’s ‘coo’ to rival the bird’s ‘tweet’ and a yellow bird for a mascot.

Twitter tweet

Much of its early hype came from government officials and prominent ministers joining the app in 2021, at a time when Twitter was fending off allegations of violating Indian laws. That same year, Koo picked up in Nigeria, where the government had banned Twitter. A year later, it became popular in Brazil as well.

It seemed to be going well. But just three years later, Koo is reportedly struggling to raise funds and talking to bigger rivals for a strategic stake sale, The Arc and Entrackr reported last week. Koo has spoken to better capitalised ‘local’ rival ShareChat and to Microsoft, which owns employment-focused social media platform LinkedIn.

What’s gone wrong with Koo’s ‘building-for-Bharat’ strategy?

Find the Money

First, Koo hasn’t found a way to make money yet. Per its latest available filings, it made just under ₹5 crore (~$600,000) in revenue in the year ended March 2022. But hardly any of that came from actual operations, i.e. the sale of marketing services (read: ads). Koo’s earnings mostly came from its parent company’s bank deposits and other investments.

Harish Arjun/The Signal

And the company is bleeding money. In FY22, it recorded losses of nearly ₹200 crore (~$24 million). Most of its money was spent on salaries, technology costs, and advertising.

It’s not just a Koo problem, though. Rivals Twitter and Weibo are also struggling to make money.

Twitter broke even only in 2018 and then lapsed back into losses in 2020. Before Elon Musk took Twitter private, the company reported losses worth $221,000 in the year ended December 2021, despite a 45% increase in ad revenue (pdf). The number of users on the platform grew year on year, but the monetisable daily active users (mDAU) in the US, its biggest market, stagnated at 37-38 million. The number of users who engaged with a performance ad on Twitter also declined for several months that year.

In comparison, Weibo has been profitable for the last three years, although profit for the year ended December 2022 declined sharply to just under $98,000 (pdf). Its total revenue also fell year on year, led by a 14% drop in advertising revenues. A global economic slowdown has prompted companies to cut ad spends since last year, hurting all major social media companies.

In an email response to The Impression, a spokesperson for Koo said the company has “optimised costs drastically” in the past year to adjust to a “revenue first reality”.

Second, Koo needs many more famous users and tonnes of content to build a sustainable user base.

As per shareholding data for March 2022, there are several celebrities holding minor stakes in the company, including actors Anupam Kher, Shraddha Kapoor, Kriti Sanon, and Lara Dutta, and cricketers such as KL Rahul. They all have verified accounts on Koo but aren’t nearly as active on the platform as they are on Instagram or X. Celebrity investors and X personalities like Balaji Srinivasan and Naval Ravikant are also on the cap table, but the former hasn’t posted anything on Koo since 2021, and the latter hasn’t posted ever.

Koo’s spokesperson told The Impression that there are 8,000 verified profiles on the platform including the “who’s who” of India and Brazil, adding the company does not pay anyone to open an account on the platform. “All investors who have participated in Koo's journey as an investor, have because they share our vision for creating a social media that's inclusive, made in India and made for the world,” the spokesperson said.

In June, Koo launched a ‘Premium’ programme, allowing top users to offer exclusive content to their followers on subscription plans. But for this to work, Koo needs existing celebrities on the platform and also needs to nurture creators of its own who become the face of the app, just like YouTube, Meta, and Twitter have done. The program is in beta and open to a limited set of creators.

Without a critical mass of users, social media platforms can’t get the network effects they need to stay relevant. Take Meta’s own X rival, Threads: despite a record-breaking number of people signing up, the platform lost over 80% of its active user base because it didn’t ship crucial features and incentivise top voices to keep posting.

Getting existing celebrities may mean bringing some of them on as minor investors and offering them a stake, diluting even more equity. If they continue to stay on bigger, more powerful social media platforms, Koo will have little to offer as a differentiator. Look at Truth Social, a Twitter rival floated by former US president Donald Trump after he was banned from the platform. Since Trump returned to X last November, his own conservative-leaning social media platform has rapidly lost appeal, even as it prepares for a public listing via a special purpose acquisition company with hardly any revenue or user base to show.

Meta and X have begun selling blue ticks and experimenting with other monetisation models. Meanwhile, Koo still seems to be searching for creators and content.

Recent reports have suggested that Koo is talking to strategic investors because it is unable to raise money on its own and is running out of cash. Its last reported fundraise was in November 2022; it got over $6 million from a clutch of investors including Tiger Global and Accel Partners. But the company’s filings show that in January this year, it raised another ₹10 crore (~$1.2 million) from the Ahmedabad-based Urmin Group family office.

It’s unclear if this was an extension of the November fundraise or a new round. Koo’s spokesperson declined to comment on the investment.

But ₹10 crore is hardly enough for a company that burned through ₹200 crore in the last fiscal year and is still rolling out new features such as Koo Premium. Both recent reports on Koo have said the platform’s monthly and daily active users are falling. Koo’s spokesperson declined to disclose the size of Koo’s active user base.

India’s homegrown social media platforms aren’t competing too well against their American rivals. Short-video apps that mushroomed after TikTok was banned in India in 2020 have mostly fallen by the wayside. The biggest among them is ShareChat’s Moj, but the parent company is struggling to manage its affairs as well. Earlier this year, it laid off about 20% of its workforce, and two of its three co-founders quit. By most estimates, Moj lags Instagram Reels and YouTube Shorts by active user base and advertising revenue.

Much ado about ‘Bharat’

So, the question is: can a homegrown platform “build for Bharat” better than Meta and Google can? Google apps such as YouTube have the deepest reach among Indians because they come pre-installed on every Android phone. YouTube, along with Meta’s WhatsApp, Facebook, and Instagram, is among the top 10 most used apps in India, according to data.ai. A new entrant will have to be so wildly popular that it forces users en masse to abandon apps they’re used to and have pre-installed on their devices.

Remember, the ordinary ‘Bharat’ user is probably using a cheaper smartphone that cannot handle more than a few apps at a time. Will they delete Facebook—where their family and friends are, and where they can browse in most Indian languages—and use Koo instead? Probably not. Not unless India does what China has done for its internet companies: ban American rivals.

Koo says it has built a diverse user base and communities in over 20 languages. “Global social media (primarily X) is English dominant. Just 20% of the world speaks English,” the company’s spokesperson told The Impression. “The opportunity we are after is much larger than what X is catering to in its current form.”

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Tenor

Change in programming: After facing the heat for months, Disney+ Hotstar has some good news to report. The platform hit a record 28 million concurrent viewers during the India vs. Pakistan match of the Asia Cup. Also, the platform signed a deal with audio platform Pratilipi to adapt some of its original audio series into web shows. Pratilipi cracked a similar deal with Amazon’s Audible earlier this year.

Shop while you swipe: Social media just won’t give up on dreams of e-commerce. TikTok has officially launched Shop in the US. Short videos now have a ‘shop’ button, and the platform will handle shipping and payments on its own. Already, there are allegations the platform is flooded with substandard Chinese goods. But TikTok says big names such as L’Oreal and Olay are signing up to sell.

‘No’s for news: Sohit Mishra, the Mumbai bureau chief of news channel NDTV, quit after he was reportedly asked to create a ruckus at a press conference held by Congress leader Rahul Gandhi. In a video, Mishra alleged interference in editorial decisions. Several longtime reporters and anchors have quit the channel since the Adani Group acquired it in December last year.

Jai Jawan: Shahrukh Khan starrer Jawan was the world’s second biggest grosser this past weekend after The Nun II, earning $62.7 million at the box office globally. It’s already broken several domestic records.

Trumpet 🎺

From u/discipulus_iuris on Reddit

More young folks say they want to be YouTubers, TikTokers, or some kind of influencer when they grow up. Is that disappointing? Perhaps for those who were raised with more conventional aspirations: being a doctor, an engineer, or something else ‘real’.

But can being an influencer be a ‘real’ job?

Fashion influencer Masoom Minawala found herself in the midst of this controversy last week. In a now-deleted Instagram Reel, she argued that being an influencer is every bit as impactful as being a doctor or people “who build bridges and homes.”

“Some people also impact, aspire, uplift, change through digital content,” she said in the video. “And I think as a society we need to…gracefully accept…that.”

People mocked Minawala for this video, especially for equating her job with more important ones like doctors and engineers and for labelling herself an “advocate of the influencer industry.” Later, in her stories, she apologised for making the comparison but insisted that influencers have significant economic and social impact.

Obviously, influencers are a ‘real’ thing now. There are businesses, investors, and policymakers whose job revolves around the so-called creator economy. This year, Goldman Sachs estimated that the global creator economy will be worth half a trillion dollars by 2027 as advertisers spend more on influencer marketing. Last year, economic advisory firm Oxford Economics said YouTubers contributed ₹10,000 crore to India’s GDP in 2021 (pdf).

However, Goldman Sachs also said only 4% of all creators worldwide can be considered “professional”—those earning more than $100,000 a year. If this is an accepted standard, it further blurs the lines between an actor, model, reality TV personality, and others famous for being famous.

Fame can make you rich. But just like few believe a Miss Universe can help poor kids in war-torn countries, few will ever agree that influencers ‘uplift’ people with ‘digital content’.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

Do you remember the first time you watched an IMAX film or a 3D film? For some, it might have been a documentary during a school trip to one of India’s ‘Science Cities’ (mine: a space documentary at the fulldome 3D theatre in Science City Kolkata). Or perhaps you remember picking up your first pair of 3D glasses to go watch James Cameron’s Avatar back in 2009.

IMAX is among the most recognisable of these cinema technologies today. It used to be the obsession of science and cinema nerds or actual film professionals. Now turned into an entertainment option ordinary Indians want to pay extra for.

Yet, over twenty years since the first IMAX screen opened in India, the technology company merely has a toehold in the country’s film industry.

So, the question is:

Can IMAX go mainstream in India?

Photo by Noom Peerapong on Unsplash

Christopher Nolan’s biographical film Oppenheimer will be among India’s biggest box office successes this year. And a big reason for that is IMAX. A lot of the film’s hype was around the fact that Nolan had shot it entirely on an IMAX film camera, a rare distinction.

In the 1960s, a group of Canadian filmmakers and an engineer invented a screen and projection system to show films in a large format—so large that viewers were blown away by the panoramic images. The first IMAX film, Tiger Child, debuted in Japan in 1970 but it was decades before the company invented more technology (including cameras and film conversion technology), raised funding, and became a permanent fixture of big-budget Hollywood films.

Nolan was the first director to take the million-dollar IMAX cameras from science museums and use them to shoot a feature film (The Dark Knight, 2008). Since then, few others have had a chance to do this, including astronauts at the International Space Station. When Nolan was shooting Oppenheimer, IMAX also helped him modify its equipment to shoot scenes in black-and-white, another first.

The marketing worked. Oppenheimer made over ₹100 crore (~$12 million) at the Indian box office; a large chunk came from the sale of IMAX tickets, which cost anywhere from 2X a normal ticket to as high as ₹2,450. The film gave IMAX one of its biggest opening weekends of all time. Some tickets to this week’s IMAX release, Jawan, are also selling for about ₹2,000 ($24) each.

All this is happening along with a significant jump in the number of Indian IMAX films, from just one to two a year (if any) to five in 2022 and another five this year as well, across the Hindi, Tamil, Telugu, and Kannada film industries.

Harish Arjun/The Signal

It has taken the Canadian firm IMAX Corporation more than 20 years to build more than just a marginal presence in India. Since opening its first screen in 2001 in Mumbai, IMAX has 25 screens in India today, including a standalone IMAX theatre in Delhi and another to be opened at Mumbai’s iconic Eros Cinema.

“When we released the first Hindi IMAX movie Dhoom 3, we had a mandate to get it to 10 screens. We were struggling to get there,” IMAX Corporation’s Preetham Daniel told The Impression in an interview. He is the vice president of theatre development for IMAX Asia-Pacific (excluding China) and joined the company’s India arm early, in 2004.

“We only had two IMAX theatres. One was the Adlabs Dome in Mumbai, and the other was a flat screen in Hyderabad. I used to knock on the doors of all the big cinema chains you can think of, and nobody would answer my calls back in the day.”

India is one of the world’s biggest film markets (the biggest by volume of films produced). So why has IMAX taken so long to get more than a toehold in India?

Money Machines

First, a quick recap. How does IMAX Corporation make money?

IMAX sells technology, equipment, and services to two kinds of customers: exhibitors (aka cinema hall owners) and filmmakers. Only one kind of customer will not do; to make money, the company needs content and the screens equipped to show it.

In the Indian context, the majority of IMAX’s money comes from:

• Equipment: licensing IMAX projectors and screens to cinema hall owners for a fee or share of revenue along with maintenance fees. These are 10-year contracts with a few extensions.
  

• Conversion technology: also called ‘Digital Re-Mastering,’ this technology converts a regular film for IMAX screens. The company usually gets a share of ticket sales as payment, per its annual report.

So here lies IMAX’s initial problem: which customer should it go after first and for how long?

“It is always a challenge to get started,” Daniel says. “It’s a chicken and egg story, to be honest. The theatre chains always said, ‘Give us more movies and I will give you more screens.’ And movie makers said, ‘Give us more theatres and we will give you more movies.’”

IMAX prioritised opening screens first because there were Hollywood films to show. But, Daniel explains, it was difficult to show filmmakers that investing in IMAX conversions was worth their while.

Local Fine-tuning

IMAX made adjustments to woo the Indian market.

First, it ditched its more popular deal structures to offer hybrid models to exhibitors. Here, the cinema owner makes a fixed upfront payment for the IMAX equipment and the rest is repaid as a percentage share of revenue earned from IMAX screenings.

“This is another element [wherein we are] relaxing our business model itself for the country,” Daniel said. “We understand India has lower ticket prices, and the entry barrier may be much higher. So, we changed the way we would structure our deals a few years ago. Today, it’s a lot cheaper [to get an IMAX screen] than what Prasads would pay.” Prasads operated India’s second IMAX screen in Hyderabad, opened in 2002. Both the exhibitor and IMAX make money only if people actually buy tickets.

As of today, there are 25 operational IMAX screens in India, while contracts for another 15 locations are in process. “I want to touch the 30-screen mark by the end of this year,” Daniel says.

But IMAX told investors in an earnings call this April that opening new screens in India was a tedious process. There are so many individual exhibitors in India that it’s difficult to crack a deal for tens of IMAX screens in one go, CEO Rich Gelfond told investors. “It's much more blocking and tackling, and it will take some time. And then, the third thing I would say about India is that construction and rollout takes much more time there. There's more bureaucracy, there's more approvals, there's more government intervention,” he said.

Second, the company made it easier (and cheaper) for filmmakers to have their films converted to IMAX. “If you look at Dhoom 3 and some of the earliest movies we did in India, all of those movies had to be sent to Los Angeles for the DMR process,” Daniel says. “That involved time constraints because you’re working in different time zones. And with censor cuts [from the Central Board of Film Certification], you had to go back and forth across a time-zone difference.”

Now, IMAX Corp has partnered with Mumbai-based visual effects studio Prime Focus. “They are well-versed in what the [CBFC] rules and regulations are, so we are able to turn around a film much faster, almost 10-15 days before release.”

That might explain the rise in the number of IMAX films in India. It also helps that the company has many more screens opening in India now than in the last two decades, including in smaller cities like Coimbatore. Daniel says the company no longer has to pursue filmmakers to consider the IMAX format.

“Until we didn’t have the footprint [of IMAX screens], converting to IMAX did not bring in incremental revenue,” he says. “Today, we bring in substantial incremental revenue for every movie released in IMAX. That understanding has set in. I do get calls from people saying they would like to do an IMAX movie. Now, it is for us to choose the right movie for the IMAX canvas.”

IMAX India/Instagram

To convince the film industry to adopt a new, expensive technology, all it takes is a few big hits. The sound systems firm Dolby Labs launched Dolby Atmos in India in 2012 with a theatre in Chennai. But after Rajinikanth starrer Sivaji 3D released in Dolby Atmos in 2017, the number of theatres fitted with the sound system grew to 500 screens in just two years.

Not There Yet

So, exhibitors and filmmakers are finally getting excited about IMAX in India. But compared to other markets, India is far behind.

Consider this: when the company opened its second screen in the country, in Hyderabad in 2003, India and China had the same number of IMAX screens. Today, China (along with Hong Kong, Taiwan, and Macau) has nearly 800 screens, while India is at just 25.

“The multiplex revenues have grown, but our universe of screens that we should have had in this country is below par,” Daniel says. “We were at about 10,500 screens in total three years ago. Post-Covid, this has actually come down by about 1,500 screens. China has 60,000-65,000 screens, while we are stuck at 9,000.”

India is also a marginal presence in IMAX filmmaking. Among “local language” films, as IMAX calls it, China is the biggest contributor, followed by Japan. India is part of the “Rest of World” segment even in its latest investor presentation (pdf). This, despite CEO Gelfond telling investors the company is talking to Indian filmmakers about using IMAX cameras. “..This one filmmaker I know of in India, I've talked to myself who's starting a project probably in about six months, who intends to film it with IMAX cameras,” he said in the investor call quoted above.

Three years ago, IMAX launched a “Filmed In IMAX” programme to certify cameras made by manufacturers such as Sony and ARRI to work in the format. Top Gun: Maverick and Dune were among the first films marketed under this programme. But India hasn’t had a ‘Filmed In IMAX’ title yet, although the 2022 Telugu film RRR was shot using IMAX-certified cameras.

Daniel says the company needs to cross two barriers before it can get films shot in, and not merely converted into, the IMAX format.

First, it needs to find a filmmaker willing to actively work with the company’s executives on the making of their film. “It’s not just about handing over a camera and saying: go shoot!” Daniel says. “There is a whole lot of involvement by IMAX into making the movie. We think there is a way to shoot a film in IMAX which will be more immersive. Sometimes, it may be a very foreign concept for a filmmaker.”

Second, the company needs a bigger network of screens before it can officially launch local films made (and not converted) in IMAX. “We are in active discussions with many, many filmmakers,” he said. “When I have 50-60 IMAX [screens] in the country, I’m pretty sure all sorts of DMR-ing, cameras, and ‘Filmed For IMAX’ programmes will all be very, very active.”

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Photo by George Pagan III on Unsplash

“To ‘finfluence: ...or not to ‘finfluence’? Sebi’s saying ‘not’. The markets regulator has issued guidelines placing restrictions on partnerships between registered brokerages and finfluencers. Finfluencers must register as “authorised persons” with Sebi and cannot work with more than one brokerage at any given time.

These are hefty restrictions, but as Bloomberg’s Andy Mukherjee notes, Sebi’s attempts to control finfluencers are likely “doomed to fail”. Just last week, well-known finfluencer Abhishek Kar was caught bragging about illegally offering investment advice to students of his trading courses.

It’s working: Netflix India may be shedding its ‘elite’ image, finally. 2022 was the platform’s best year ever, with a 25% increase in revenue and 30% rise in viewing time, vice president Monika Shergill said. Netflix doubled its subscriber base to about 10 million in India and earned ₹2,200-2,400 crore (~$260-290 million) last year, Business Standard reported, making it India’s second-largest streaming platform by revenue after Disney+Hotstar.

Striking out: Hollywood’s ongoing strike is finally burrowing into studios’ balance sheets. Warner Bros Discovery has cut its forecast of adjusted earnings for the year by $500 million, blaming the strikes. But it also expects more cash on the books as Barbie continues to make the studio money. Studio layoffs during the strike have also killed 17,000 jobs.

Not music to my ears: Universal Music has signed a deal with French music streaming service Deezer to boost payments for professional artists and cut them for users who upload ‘noise’ such as uploads of the sound of rain or a washing machine. Spotify has also cut ad support for ‘white noise’ podcasters who upload ambient sounds to the platform.

Deserted in the desert: Hordes of wealthy fans in the middle of a desert with limited rations and portable toilets–what could go wrong? With a little bit of rain, a lot apparently. Attendees of the Burning Man music festival in Nevada, USA, trudged back to civilisation on foot in ankle-deep mud after a sudden storm trapped them at the festival site. Several stranded attendees, including celebrities, documented their attempts to escape live on social media, encouraging much online schadenfreude.

Trumpet 🎺

Twitter tweet

Picture this: you’re a young company with a spanking new product on the market. You’re probably equal parts excited and nervous, maybe even ready to throw up from the anxiety. This is that crucial 0-1 period for a product company when it discovers and retains its most loyal customer base who give you your most useful feedback.

What you don’t want to do is what expense-tracking app Fold Money did last week: get into a public spat with a user who called the app an “empty burger”, complaining it wasn’t integrated with most banks.

Fold Money’s defence is that it is in beta and still rolling features out. But others pointed out that taking all kinds of user feedback is the whole point of a beta programme.

Rude customers can be overwhelming if you’re an independent brand. In a recent post, Chaitanya Ramalingegowda, co-founder of the mattress and furniture brand Wakefit, wrote about dealing with a barrage of abusive emails and messages from customers.

“Being a D2C founder/team member is like being in front of a firing squad every single day,” Ramalingegowda wrote. “Opening any of your social media handles (including personal ones) can feel like a stressful experience with your family members, investors and batchmates tagged on complaints.”

Social media is now overflowing with passive-aggressive or downright abusive conversations between customers and brands’ support teams. But some, like European low-cost airline RyanAir, have turned this into a sardonic social media persona. This is a recent example.

The strategy’s worked so well that some users are (probably) tagging RyanAir in complaints just for the thrill of getting roasted. Much like fans of Gordon Ramsay tag him in photos of crappy food they’ve made just so he can blast them in his iconic, abrasive style.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

A quick note: we’re taking next Tuesday (August 29) off for Onam, so there won’t be an edition of The Impression next week. I’ll be back on September 6.

When Netflix first launched in India (and worldwide simultaneously) over seven years ago, we had no streaming or OTT industry to speak of. Hotstar was streaming cricket, but other rivals launched only later that year. The first streaming originals were free to watch on YouTube, such TVF’s cult hit Pitchers (2015).

But it was another year or so before India’s first original streaming shows began releasing—Amazon’s Inside Edge (2017) and Netflix’s Sacred Games (2018) among them—and Indian subscribers got used to paying for high-quality, long-form content.

Seven years later, this industry is already facing another tectonic shift, courtesy Reliance Industries’ JioCinema. It made the Indian Premier League (IPL) free, changing the way live sports streaming is monetised in India. It bought a licence for the massive libraries of HBO and NBCUniversal, and sold them for just ₹999 a year (although with ads).

And now, it’s drowning us all in original content.

Inside JioCinema’s tsunami of originals

Pablo García Saldaña/Unsplash

“It’s Reliance. They’re all about aggression in everything they do.”

This is what an independent film and web-series producer says when asked how JioCinema’s entry has changed the way original films and series are sold in Mumbai. The producer spoke to The Impression requesting anonymity. “I don’t want to talk about JioCinema on the record. They’re our partner,” they say. “And they’re a very good partner,” they stress, a beat later.

In its first few years, India’s streaming industry was in the grip of a gold rush. Platforms like Netflix, Amazon Prime Video, Hotstar, MX Player and later Zee5, SonyLIV, and others were acquiring or commissioning films and series at a breakneck pace. Producers with scripts to sell made hay while the OTT sun was shining.

The rush peaked during the pandemic, after which budgets got tighter and platforms’ slates, smaller. Filmmakers’ gold rush was over.

“Earlier, especially in the pandemic, platforms were very eager to greenlight content,” a web-series writer working with several streaming platforms told The Impression, requesting anonymity. “They were in a rush to build their catalogue. Those days are over now. It’s harder to get your show or film onto Netflix’s slate or Amazon’s slate.”

JioCinema’s entry could not have come sooner.

By airing the IPL for free, it has already changed the way live sports is monetised forever. Now, as it shifts focus toward retaining the audience base it acquired via the IPL, JioCinema is aggressively building a library of originals in an otherwise cooling market. Even its marketing sells JioCinema as the home for the hopelessly addicted; it’s using the tagline “Dekhta Ja India” or “Keep watching, India” (you can also interpret it as a promise: “just watch, there’s more”).

For writers, directors, and producers with a script, JioCinema has become plan B.

“Right now in the industry, there is an understanding that if you have a story to sell, JioCinema is always there,” the writer quoted above said. “So, people will make the rounds with their script to all other platforms, but they know that if all else fails, they will be able to sell the idea to JioCinema because they’re constantly in need of content.”

Reliance did not respond to a request for comment.

Since this year’s IPL concluded in May, JioCinema has been following a simple strategy: drop a new original (film or series) every Friday. It started with Hindi crime-drama Inspector Avinash 10 days before the IPL final, followed by a comedy movie Hello Hello What’s Up? the following week, and then a John Wick-style action film Bloody Daddy starring Shahid Kapoor the week after. In the three months since then, JioCinema has released more original shows and films than most of its rivals. And that’s not counting the Viacom18 library it now has after streaming platform Voot merged with JioCinema.

Other platforms often strike long-term deals for content with prominent production houses, such as Netflix’s deal with Excel Entertainment and Amazon Prime Video’s partnership with Yash Raj Films. But JioCinema’s doors are open to one and all. The producers of its original titles range from Sunir Kheterpal (of theatrical releases Rocky Handsome and Kesari) to indie studio JAR Pictures (of critically acclaimed series Tabbar and cult films Gangs of Wasseypur and Kai Po Che) to newer kid on the block Leo Media Collective (previously Still & Still Media Collective of Bandish Bandits fame). Several titles have been produced in-house by Jio Studios and credit CEO Jyoti Deshpande as producer.

The bottom line: no title or production house is too big or too small for JioCinema. They want it all.

“JioCinema will acquire anything right now; everyone knows it,” says an independent Bhojpuri and Hindi film producer. “They have a massive slate to fill. They need something to release every Friday. That is a lot of content.”

Parent Viacom18 is also reportedly bringing in Kiran Mani, a top Google India executive, to run the JioCinema business and keep it growing at a scorching pace.

One ‘Bigg’ Factor

In all this, the caveat is that JioCinema wants to produce mass entertainers only, which will appeal to as wide an audience base as possible. There is not much space for the high-budget, slickly produced “prestige” shows that Netflix and Amazon Prime Video are known for. In a catalogue that earns from ad revenue, there is unlikely to be.

But JioCinema isn’t the only one in line for mass entertainment.

“There was a time when platforms wanted something niche, in the early days of streaming,” a film and web-series producer told The Impression, requesting anonymity. “But that time is gone now. Every platform wants a mass entertainer now, be it SVoD (subscription video-on-demand) or AVoD (advertising video-on-demand). The time of ‘niche content’ is over.”

In the last few years, Netflix and Amazon Prime Video have been spending good money to acquire India’s biggest box office hits, including RRR, Bhool Bhulaiya 2, Kantara, Pathaan, Ponniyin Selvan, and more.

Originals aside, JioCinema’s biggest boost since the IPL has come not from its originals but from Viacom18’s streaming spinoff Bigg Boss OTT. Season 2’s finale aired in mid-August drew 23 million viewers. At its peak, 7.2 million people watched the episode live, and over 100 million watched the show overall. Excluding live sports, this was India’s most viewed live-streamed event, Variety reported. It also helped stem the expected loss of viewers who abandoned the platform once the IPL was over.

Now that this record is set, JioCinema’s upcoming original releases have a tall standard to meet. And because these originals are monetised through ads, not subscriptions, this weekly blitzkrieg of fast-produced mass entertainment is likely to continue. This will have a far-reaching impact on the kind of shows and films that are made for streaming.

Netflix has yet to introduce its ad-tier in India, but Amazon and Disney+ Hotstar are good examples of how this future is looking. Amazon’s free-to-view miniTV looks for shows that are either comedies or love stories, with 20-minute episodes, new actors, and significantly lower budgets than regular OTT shows. Hotstar is going slow on direct-to-OTT films. It is also commissioning originals with longer seasons of shorter episodes released daily. These shows have ad breaks and are free to watch. Filmmakers in Mumbai are already treating this as a separate genre: “TV plus” content that earns them lower margins but is apt for simple stories and a quick turnaround.

“We’re not in the business of entertainment; we’re in the business of time,” Sumit Saxena, creator of the recent JioCinema original hit Kaalkoot, told The Impression. “You are in the business of entertainment when you entertain people with a film or show, and they give you money directly. But that happens at the box office. In the OTT business, the audiences give you their time and attention, they don’t pay you directly. The platform monetises their attention, and it’s your job to get it. Your storytelling will have to be very exciting so that you can get their attention as quickly as possible, and hold it for as long as possible. It’s a very, very tricky business.”

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Is this fight still on?: No, not the ‘Zuck vs. Elon’ cage match; that’s off. Meta’s “Twitter-killer” Threads will launch a web version later this month as it prepares to take on the now-rebranded X. Is there a point to this, though? Threads got a record 100 million sign-ups just days after it launched but blew the lead because user interest dropped and crucial features weren’t shipped on time. By early August, it had lost more than 80% of its daily active users.

Meanwhile, there’s a party at X, erstwhile Twitter. Verified users are flaunting their lavish ad revenue earnings even as the algorithm pushes them to steal content via screenshots or, worse, unleash verbal attacks to rake in impressions and ad $$$.

Cards on the table: Hollywood studios have made a public offer to the writers’ union, four months after it went on strike. Their last meeting to discuss the strike ended in arguments, The Wall Street Journal reports, and the studios decided not to release their offer publicly last Friday. Now, they’re hoping a public disclosure will appeal to enough union members to put pressure on the union’s leadership. Among the concessions are 21.5% more in residuals for writers and protection from the use of generative AI. The writers’ union is not impressed.

Snap to attention: Snap Inc. has a new country head in India. Pulkit Trivedi, formerly director of Google Pay, will manage the company’s growth, marketing, and creator relationships directly. He will report to Snap’s head of Asia-Pacific, Ajit Mohan. Both Trivedi and Mohan have previously worked at Meta India.

“Where are the teeth?”: The Supreme Court asks TV news channels. A three-judge bench said that news broadcasters are unable to self-regulate and the fines they pay for violating their own rules were paltry. It was listening to an appeal filed by the National Broadcasters’ Association against a ₹1 lakh (~$1,200) fine.

With several major state elections scheduled this year, and the general election next year, news channels are preparing for a bountiful season of ad revenue. Some news channels are demanding raw data from the Broadcast Audience Research Council (BARC) during the election season, while others want a ratings blackout altogether.

Trumpet 🎺

Tarun Tahiliani/Instagram

Super-glamorous shows and brand integrations are a match made in heaven. Which is why this much-delayed season of Amazon Prime Video’s Made In Heaven is absolutely teeming with brand integrations: everything from dubiously bright-red Zomato takeaway bags (has anyone ever actually got their order in one?) to an entire episode starring designer Sabyasachi Mukherjee, featuring his bridal couture collection.

But while Sabya got a generous plug, fellow wedding couturier Tarun Tahiliani was left in the cold. In a series of Instagram stories, he expressed disappointment at the makers of the show for featuring his outfits—provided for free—and passing them off as designs of a character on the show. “If this is what the production house intended, they should have engaged a costume designer,” Tahiliani said.

Incidentally, the Aditya Birla Group’s fashion arm invested in both Sabyasachi (which it owns) and Tarun Tahiliani (for a 33% stake) in 2021.

Popular TV (and web) shows are a powerful brand marketing tool. There are Pinterest boards dedicated to actor Sobhita Dhulipala’s sarees from the show; brands big (like Raw Mango) and small (like Roma Narsinghani) are marketing themselves with stills and clips from the show. But just like with Tahiliani, none of these brands were explicitly advertised by name, and it was up to them to use the show material to promote their products.

Was Tahiliani’s deal with the show’s makers different? Maybe, but the brand did put up an Instagram post featuring the actors from the show wearing the designer’s clothes. Maybe it was the realisation that a rival (and his collection) got the meatier role. What’s amazing is that despite average (and some poor) reviews, Made In Heaven has such a chokehold on the rich urban Indian that the country’s most iconic designers are jostling for the spotlight.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again two weeks from now!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

A quick note: we’re taking next Tuesday (August 15) off for Independence Day, so there won’t be an edition of The Impression next week. I’ll be back on August 23.

On to this week’s edition.

The pandemic was the peak of India’s direct-to-consumer (D2C) brand wave. Made-on-Instagram brands grew almost overnight, bombarding our feeds with thousands of ads. And just when it seemed like anyone could start an online consumer business, it all began to go bust.

The ad industry declared that performance marketing—clicks on an ad in a search result, banner, video, story, or post—was dead. Advertisers were spending so much money on these relatively cheap digital ads that they were, at best, luring the affluent to one-time discounts, not building a loyal customer base. Then, Google began killing third-party cookies (a piece of code that collects user data on the internet) and Apple cut off Facebook from its users’ data. Brands shifted marketing budgets to retail media networks such as Amazon Ads.

So, if it’s no longer possible to build a brand by repeatedly serving cheap performance ads, what is an online-first consumer company to do?

Ask Nykaa and its latest offering, Nykaaland.

Building a Big Bang brand ‘land’

Aditya kumar/Unsplash

Beauty retailer Nykaa is hosting a full-fledged carnival-like event in downtown Mumbai this November called Nykaaland. It’s promising stalls with beauty brands, good food, music, live entertainment, and Instagrammable spots for selfies. November to February is the peak season for outdoor flea markets, performances, and other events in Mumbai. The theme? “Alice In Wonderland meets Beautycore”. Nykaa is yet to release more details. From the name itself, though, it seems Nykaa is drawing inspiration from food-delivery app Zomato.

In 2018, Zomato launched Zomaland, an outdoor event with food stalls from partner restaurants, along with live entertainment. Zomato is a plain, simple restaurant directory and food-delivery company but it focused on building Zomaland like a carnival, with interactive games, DJs, comedians, and even neon signs reminiscent of American carnivals and circuses.

Until Zomaland, Indian retailers had never really hosted a carnival-like event. Live events were meant to be shopping festivals, not an expensive to-do with musicians and comedians. A good example is Big Bazaar’s Sabse Saste Din, which started out as a single-day shopping spree on Republic Day in the early 2000s. Eventually, it became a three-to-four-day shopping festival advertising up to 80% off at all of the supermarket’s outlets. Today, every major retailer has a marquee sale event, such as Amazon’s Prime Day, Flipkart’s Big Billion Day, and Nykaa’s Hot Pink Sale.

Discount-fuelled extravaganzas can get more customers and help clear inventory, but brand marketing is meant to achieve more than that. Zomaland helped Zomato cement its image as a young, fun brand that understands millennials’ wants and desires. It ties in well with their social media marketing, which is heavy on memes and the everyday lives of young working adults.

Nykaa’s social following is much bigger than Zomato’s, but most of it is focused on brand launches, tutorials, and sales announcements. It has been the lead sponsor of lifestyle magazine Femina’s annual Beauty Awards, but Nykaaland will be the company’s first major event (co-produced with BookMyShow).

Organising events is an expensive business. In the year that Zomato incorporated its subsidiary Zomato Entertainment, which houses Zomaland, its marketing expenses ballooned (pdf) by 15x to ₹1,213 crore (~$146 million). That was nearly half of its total (non-finance, non-wages) expenses for the year. In FY19, Zomato spent ₹71 lakh (~$86,000) on renting a venue and equipment for Zomaland; this rose to over ₹1 crore (~$120,000) the next year, Zomato Entertainment’s filings show. But most of its costs were for massive ‘events infrastructure and facilities’—worth ₹4.3 crore (~$520,000), which rose to ₹7 crore (~$850,000) the next year.

After the pandemic, Zomato brought back Zomaland late last year in partnership with Paytm Insider. But besides events, online retailers have tried several other brand marketing campaigns to acquire an audience directly. In 2019, Zomato launched video streaming on its app with 18 original, food-based shows called Zomato Originals. It shut the offering down soon after, but the company still runs a podcast with founder Deepinder Goyal called Breaking Bread. That same year, Flipkart also launched video streaming in-app; its last show aired sometime in 2021.

Then, there are virtual activities in the “metaverse”. In 2021-22, Gucci and Nike built real estate and sold virtual merch in the kids’ game Roblox.

But hosting a live, in-person event is a lot more labour-intensive and needs tons of cash, as Zomato’s example shows. Nykaa’s consolidated marketing expense has risen from ₹200 crore (~$24.14 million) in FY20 to ₹590 crore in FY23. Nykaa will attempt Nykaaland while dealing with an exodus: six senior executives have quit the company since April, including chief marketing officer Shalini Raghavan. Nykaa’s founder-CEO Falguni Nayar is taking over the marketing function.

Nykaa should invest in a real, direct connection with its core customer base. It is battling deep-pocketed competition in the online beauty business, from the K Raheja Corp’s Shoppers’ Stop to Reliance Industries’ Tira, Tata Cliq, Myntra, and now, Amazon’s beauty business. Everybody will be bombarding online users with search ads, Instagram Story ads, YouTube video ads, and all other forms of paid social media marketing.

There’s little to differentiate between retailers selling makeup and skincare. So, who will customers pick when they go shopping? Maybe the one that hosted a dreamy, Alice In Wonderland-style carnival on a sunny winter afternoon.

The movies are back. So are costs.

Tenor

PVR-Inox has had a washout start to the financial year. In the June 2023 quarter, the company slipped into the red, with a ₹44 crore loss after tax (pdf). This should have been a good result for the company:

• Sales of movie tickets and food were up 15% and 22% from the previous quarter.

• The average price of a ticket was ₹7 higher, and people spent ₹11 more per head on food & drink (vs. the previous quarter)

• Yet, 3.4 million more people came to the movies in this period.

So, what went wrong? Inflation.

Almost all of PVR-Inox’s fixed costs went up significantly quarter-on-quarter. It paid 5% more rent and 9% more in common area maintenance charges, a component of lease agreements with malls and other cinema locations. This was an extremely hot summer in North India, so the company’s electricity and utilities charges were up by a massive 39%. And to top it off, salaries also increased.

July will likely be a good month for PVR-Inox, with four back-to-back hits: Mission Impossible: 7, Barbie, Oppenheimer, and now Rocky Aur Rani Ki Prem Kahani, which has reportedly crossed ₹100 crore in domestic box office collections.

But all this will only be worth it if PVR-Inox minds these ballooning costs.

The company’s already working on it. Its management told analysts on an earnings call (pdf) last week. It is paying for newly-opened cinemas by share of revenue earned and not by minimum guarantees, an upfront amount of money promised to the landlord. “In some of our existing properties, which are underperforming where the rental cost is high, we are currently in discussions with some of our landlords and hopeful of getting some success there as well,” chief financial officer Nitin Sood said.

PVR-Inox is opening more cinemas, and the management says some costs, such as wages, will continue to rise. What will it take to make sure the profits keep rolling in? More hit films all year round. A couple of big hits a year is just not going to cut it. There may be a big boom month, like this July, but high fixed costs will eat into margins the rest of the year. Filmmakers will have to keep coming up with better movies all year round. If that doesn’t happen, we’ll be paying to watch trailers and reruns: PVR-Inox re-released the 2003 hit Koi… Mil Gaya in select theatres last week.

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Whispers of discontent: A moment of pride is turning ugly. Bomman and Bellie, the Kattunayakan community mahouts featured in The Elephant Whisperers, have sent a legal notice to the filmmakers Kartiki Gonsalves and Guneet Monga for unpaid dues, demanding ₹2 crore (~$240,000). The couple alleged they were promised a car, house, and money to fund their granddaughter’s education. The two women won an Oscar for best documentary short film last year, the first Indian production to get the award.

Hard times, tough measures: Influencers had negotiated a contract with the SAG-AFTRA actors’ union two years ago, hoping to become union members one day. That protection is coming back to bite them. The guild has asked influencers to stay away from work or risk losing future membership and union benefits. But many creators aren’t sure if it’s worth losing money today. They also aren’t sure if their current work technically violates the terms of the strike. Meanwhile, striking actors are using apps like Cameo to deliver birthday greetings for some cash in lean times.

‘A Goenka always pays his debts’: Seems to be Subhash Chandra's new credo. The Essel group promoter is settling an outstanding debt with JC Flowers Asset Reconstruction Company to buy back pledged shares in group companies, such as Dish TV, and other assets, including a central Delhi bungalow, Mint reported. Chandra and his son Punit Goenka are still barred from running listed companies or their subsidiaries. The Sony-Zee merger is delayed and the government is examining fraud allegations against the family.

Going all-in: No one can resist those sweet betting dollars, not even Disney. Its sports cable network ESPN is tying up with gambling company Penn Entertainment in a $2 billion deal. Penn’s betting portals in the US will be renamed ESPN Bet. As part of the deal, Penn is also selling Barstool Sports back to founder David Portnoy (who’s been posting about “coming back”).

Trumpet 🎺

Going ‘local’ sells. Ice-cream makers are doing it, even in print. Meta is advising brands to use personalised, local language ad copy for campaigns in the upcoming festive season. Can publishers be far behind?

Vogue India, arguably India’s most important fashion magazine, is also testing the waters with local language copy. Its latest issue features actor Sara Ali Khan on the cover with her name in Devanagari script (isn’t ‘Khan’ missing a nastaliq?). Khan’s interview for the cover story talks about her middle-class upbringing, so it makes sense to design the issue to be more ‘relatable’ with the use of Hindi in an otherwise super-premium magazine meant for rich, urban readers.

But the experiment has a problem: what about those Vogue readers who don’t read or speak Hindi? You can make the argument that Vogue’s current Indian readership is likely concentrated in Delhi and Mumbai, the hubs of the luxury fashion industry. Hindi isn’t an official language in Mumbai, though it is widely spoken and the script for Marathi and Hindi are similar. But this example shows how hard it can be to go ‘local’ in India, where so many languages are spoken.

This isn’t Vogue India’s first experiment with Hindi/Devanagari. In its April issue, it had actor Alia Bhatt on the cover with ‘India’ written in the script. That was presumably also to celebrate Dior’s first fashion show in India since the 1980s. And before that was the February issue featuring supermodel Naomi Campbell; her name was written in both Devanagari and English.

A magazine like Vogue will want to reach more rich Indians, many of whom aren’t part of elite Mumbai-Delhi circles. They may be living in smaller cities and state capitals where Hindi isn’t common. Affixing Hindi on the cover is hardly going to woo them; in some fiercely anti-Hindi states, it may just put them off.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again two weeks from now!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

You can divide the history of Indian social media into two distinct phases: pre- and post-TikTok. The Chinese short-video platform was the biggest disruption to the way Indians surfed the internet since the advent of Facebook and YouTube, all powered by cheap internet. Look around you—everybody is scrolling an endless aisle of 15-30-second videos all the time. How much time do you spend in a day watching short videos?

It’s unthinkable now to run a mass social media platform without some kind of short video front-and-centre. Which is why Meta launched Facebook Reels in India, two years after it rolled out Instagram Reels after India banned TikTok.

The question is: why?

Does Facebook really need Reels?

Sticker Mule/Unsplash

Once India banned TikTok in June 2020, Big Tech companies and homegrown startups alike scrambled to capture the spot it left behind. ShareChat launched Moj just days later, Instagram announced Reels the following month, and YouTube brought out Shorts in India in September. By the end of the year, several others had cropped up.

The competition is still wide open, although Instagram Reels and YouTube Shorts are somewhat in the lead just because they’re already such big platforms. Other pandemic babies, including Chingari and Mitron, are struggling or have simply faded away. And yet, two years later, Meta launched Facebook Reels, a product practically identical to Instagram Reels.

“Reels plays exceed 200 billion per day across Facebook and Instagram,” Meta CEO Mark Zuckerberg told investors in a call last week. “We're seeing good progress on Reels monetisation as well, with the annual revenue run-rate across our apps now exceeding $10 billion, up from $3 billion last fall.” Keep in mind, Meta does not break down Reels’ performance on Instagram and Facebook separately. Instagram Reels is older, but Facebook has a bigger user base worldwide, so it may be difficult to deduce which of the two apps drives more views and revenue from short videos.

Meta constantly shows Instagram Reels on Facebook and vice versa; several Reels on Instagram carry a disclaimer that the video is also cross-posted to Facebook.

But Meta is careful to point out that Reels is only part of Facebook’s video offerings. “Video on Facebook isn’t just about Reels; it also includes long-form video and live content,” Paras Sharma, director of content and community partnerships at Meta India, told The Impression. “It’s true that a lot of creators share their Reels from Instagram to Facebook,” he added. “The ability to watch Instagram Reels on Facebook has helped many Instagram creators reach more people – even for creators who don’t have an active Facebook profile.”

Sharma declined to share how many posts on Facebook Reels are actually Instagram Reels. But he did share examples of creators who’re making it big on Facebook Reels. Some, such as Aaditya Shukla and Ekta Sandhir, have 1-3 million followers each on Instagram but only about half or even a tenth of that follower base on Facebook. There are exceptions, though; YouTubers Ramneek Singh, YouNick Viral Vlogs, and Shuaib Khan have amassed over a million Facebook followers each by posting Reels.

It’s telling that regional language YouTubers have found more early success with Facebook Reels than transplants from Instagram. Facebook and YouTube are India’s biggest social media apps and they’re both the best digital way to reach India’s small town, mass consumer base. Instagram may have brought Reels in first, but YouTube beat Facebook to launch a short video app (Shorts) that this mass consumer is more likely to use. Meta probably knows this and that could explain why it finds value in replicating Reels on Facebook. A return check on YouTube, if you will.

Who’s Making Facebook Reels?

There are more than enough brands and creators making Reels on Instagram and placing vertical video ads in them. Are they doing the same on Facebook Reels?

“We usually just cross-post our Instagram Reels on to our Facebook profile,” Mehak Sagar Shahani, co-founder of wedding services company WedMeGood, told The Impression. The firm has 537,000 followers on Facebook and 1.4 million followers on Instagram. But even after accounting for the difference in following, WedMeGood’s Instagram Reels generally get a lot more views than Facebook Reels.

“The basic thing is that on Facebook as a medium, engagement is low now,” Shahani says. “It’s mostly a platform for older people and for people in tier-3 or smaller cities. So, Facebook Reels do better in comparison to Facebook posts, but it’s nothing compared to the performance of Instagram Reels.”

Because Facebook is no longer the urban, affluent user’s go-to social media platform, brands don’t seem to be too bothered with building a video strategy for Facebook Reels. “We keep reposting all our Instagram content to Facebook and make sure the pages are updated, but these Reels aren’t generating sales leads for us,” Amulya Vanga, a social media consultant and founder of Vanga Media, told The Impression. Her agency caters to architecture and design firms that have clients in big cities.

“None of my clients have come to me asking for a Facebook page, but then the customers they’re targeting are better served on Instagram than on Facebook. They’re looking for high-net-worth individuals who splurge on building and designing their homes and offices.” While handling her clients’ social media, Vanga noticed that Facebook’s algorithm doesn’t boost Reels in the platform’s feed. Instagram’s algorithm prioritises Reels over everything else.

Perhaps Facebook Reels does not hold as much value for brands that cater to urban, affluent Indians. Advertisers generally use Instagram as a means to reach that group of consumers, while Facebook’s wider, deeper reach into India makes it a more suitable platform for reaching small-town, ordinary people. Some creators are tapping into this opportunity.

“The 30+ year old audience is still new to Instagram, they don’t necessarily use it,” Siddik Ganiwala, co-founder of influencer marketing firm PowerHouse Media, told The Impression. “This is the audience that used to watch TikTok and they are mostly Facebook users. That’s why original, regional content is the only thing that works on Facebook Reels. You can monetise even if you have a thousand followers.” Rival platforms such as YouTube and Sharechat’s Moj only allow users to monetise if they have reached a milestone, such as a large number of followers or a significant viewership.

Instagram Reels has been criticised in the past for its glut of “elite”, polished content and followers who watch ordinary creators only to make fun of their videos for being “cringe”. In the last year, the platform has been promoting more small-town creators who make relatable videos in regional languages.

So, does Facebook need Reels? The platform’s daily and monthly active users are growing, but slowly (at 2-5% year-on-year for the last two quarters). Short videos will also be useful in engaging existing users and holding on to younger ones that may not be interested in Instagram. Besides, it’s another kind of ad inventory to offer advertisers.

“Given that Instagram Reels ads perform well, I’m guessing they introduced Facebook Reels to give advertisers an additional option to monetise,” WedMeGood’s Shahani said. “If you’re running vertical video ads, it just makes sense to have the same ad inventory on both Facebook and Instagram.”

Will Facebook Reels reach those who’re happier on YouTube and can’t be bothered with Instagram? All will fall in place if creators are able to grow a credible audience, Facebook’s loyal users get used to browsing videos, and the army of brands comes calling.

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Tenor

Broken streak: Snap Inc. is in trouble. Last week, Meta reported a massive 11.8% increase in advertising revenue for the June quarter, despite a 16% decline in ad prices. Alphabet reported a 7% rise in revenue, including a 4.4% increase in YouTube’s ad sales. But Snapchat’s quarterly revenue fell 4% (pdf), led by a massive 13% drop in its main market, North America. Variety argues that Snap’s ad business is just not as resilient as Meta’s and Google’s. Besides, its smaller scale and niche appeal among mostly younger users makes it vulnerable to advertising recessions, such as the one affecting Big Tech companies this past year.

Back home, local social media companies are also looking for ways to make money. Sharechat is testing out something called ‘Branded Shares’, a feature that lets a brand attach its ad to any piece of content shared from the platform via WhatsApp. You may remember that Sharechat first became popular as the home of good morning videos and shayaris that older folks love sharing on family WhatsApp groups. Maybe attaching an ad for soaps or kurtas to a cute short video or post may not be the best way to engage users.

Password police: It’s here. After Netflix, Disney+Hotstar is also cracking down on password sharing in India. Reuters reported the platform will allow paying Indian users to log in from only four devices at a time starting later this year. Besides, its cheaper subscription tiers will be restricted to just two devices at a time. Earlier this month, Netflix wrote to its India subscribers discouraging them from sharing passwords and asking them to verify which logged-in device was part of their password-sharing ‘household’.

Do you want to play a game? Netflix still wants you to. In the last two years, it has either acquired or partnered with gaming studios to launch over 50 games. But the company is taking a hands-off approach with these studios, The Verge reported. The platform has allowed studios like Night School and Ripstone to take the lead on the games they develop, even when they’re based on popular Netflix shows such as The Queen’s Gambit. It’s also pushing on with interactive titles. This month, the platform will release Choose Love, its first ever choose-your-adventure style romantic comedy. Netflix’s biggest hit in this genre by far is the 2018 film Black Mirror: Bandersnatch. Earlier this year, Wired had argued that Netflix will find it hard to get good at making games. Its most awaited release is Ustwo Games’ Monument Valley, coming 2024.

Remains of the day: We knew it was coming. PVR Inox hasn’t had a good start to the current financial year. Its revenues for the June quarter were over 16% lower than what both multiplex chains earned together this time a year ago (pdf). The company slipped into losses. Admits, occupancy rates, and even sales of food and drinks are down from this time a year ago. This quarter should be much better, though. There’s Barbenheimer: Barbie and Oppenheimer have made nearly ₹130 crore (~$1.58 million) at the box office so far. And Shahrukh Khan’s Jawan will release on September 7.

Trumpet 🎺

Fanta India/Instagram

What’s in a name? Advertising types love inventing new ones for mundane, everyday things. As they should. That’s what writing memorable ad copy is all about. All that matters in the end is that your phrase sticks the landing and clicks with your audience instantly.

In particular, brands and their ad agencies are under pressure to click with a Gen-Z audience. This is why we’re seeing a proliferation of ‘meme marketing’ and ad campaigns that invent ‘cool’ terms with the hope they’ll go viral enough to become an Urban Dictionary entry one day.

Unfortunately, that doesn’t happen most of the time. This latest campaign for Fanta India is a great example. The central idea is simple: when you’re snacking, grab a Fanta. But “Fnacking”? Even for a snack and a drink, that’s a mouthful. If the word you’re inventing is more cringe than cool, it’s not going to catch on with the Fellow Kids™. Maybe what the team here needed was Mean Girl Regina George to just step in and say “stop trying to make fetch fnacking happen, it’s not going to happen.”

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

Did you watch anime growing up?

Some of us may remember the Hindi version of the late-eighties hit Dragon Ball Z that Cartoon Network aired in India in the early 2000s. It was a hit with young boys who often recreated iconic moments from the series, such as Goku and Vegeta’s fights and when Goku turns Super Saiyan for the first time. Personally, I was a huge fan of Cardcaptor Sakura, a ‘90s anime series based on a shoujo manga (created for young girls) of the same name.

These and other shows like Pokémon, Naruto, and Beyblade became regular fixtures for a generation of urban Indian fans (or otaku: a person obsessed with anime) in the 2000s. They sparked school fights over Pokémon Tazos and Beyblade spinning tops. And it all worked because Indian kids were watching these shows on TV in Indian languages, particularly Hindi.

Now, the kids have grown up. There’s also much, much more content vying for their attention. Where does anime go from here?

Sony’s Crunchyroll is trying to nudge more Indian audiences to embrace anime: from the kids who are now discovering older titles on TV to their parents, once fans, who might find joy in adult shows.

Crunchyroll is leaning hard on localising its offerings. The question is: what will be its bigger priority in India—wooing existing anime fans, or converting new ones to the genre?

Crunchyroll’s Search for the Desi Anime Viewer

Dex Ezekiel/Unsplash

At its first fan event in India since its launch, anime streaming platform Crunchyroll screened the first two episodes of the hit series Jujutsu Kaisen in a Mumbai multiplex. The show is already available in India on Netflix in the original Japanese with English subtitles, but Crunchyroll has dubbed it in Hindi for Indian audiences.

Hindi dubs of anime aren’t new. They’ve been around on Indian television since the early 2000s. But a lot has changed since then in the way Indians watch anime.

Then, Dragon Ball Z and Cardcaptor Sakura used to air on Cartoon Network, and later on its anime-focused offshoot Toonami (which shut down in 2018). In 2004, Sony launched the TV channel Animax with English and Hindi feeds. But it shut down the Hindi feed in 2006 to focus on urban audiences. Then, it sold the business to KC Global Media in 2020 and moved all anime content to its streaming platform, SonyLIV.

Today, almost all major streaming platforms in India are offering some anime. Netflix has a large number of popular titles, while Amazon Prime Video introduced KC Global’s Animax + Gem as a separate channel for subscription in May. Animax was also launched on Jio TV this year. Disney+ Hotstar, too, has a modest anime library. And on linear TV, Sony’s successor to Animax, called Sony YAY!, began airing the 2000s anime classic Naruto last year in Hindi, Tamil, Telugu, Malayalam, and Bangla.

So, why is Crunchyroll pushing its way in so late in the game? Until last year, the US-based platform didn’t even have subscription plans in Indian rupees. Platforms like Netflix already offer a number of anime titles it is marketing in India, along with evergreen hits like Beyblade and Pokémon.

It’s all about digging deeper into that local language market. Sony acquired Crunchyroll in 2021 for nearly $1.2 billion. Last year, the media conglomerate merged Crunchyroll with its main business. Now, it is betting India will help accelerate the anime platform’s growth.

“We really started to invest in the last 12 months, adding more content to the catalogue, adjusting to more locally relevant pricing, and expanding our dubs,” Crunchyroll’s chief operating officer Brady McCollum told The Impression in an interview. “We heard from fans that they’re looking for more dubs, so we started with Hindi dubs. We are actively working on Tamil and Telugu dubs, and you can expect them in the next few quarters.”

Apart from Jujutsu Kaisen, Crunchyroll is introducing Hindi dubbed versions of Dragon Ball Super, Masamune-kun’s Revenge, My Tiny Senpai, Rent-a-Girlfriend, and hot favourite Chainsaw Man.

Besides this, Crunchyroll also adjusted its subscription prices. In July last year, it slashed prices for its premium subscription from $7.99 a month to ₹79/month (just under $1/month). It now sells annual subscriptions for ₹999/year (~$12.20). Earlier this year, the platform introduced a Hindi user interface. It also signed up actors Tiger Shroff and Rashmika Mandanna to be the platform’s celebrity faces. Shroff, a hit with Hindi-speaking children, is also the face of Sony YAY!. Mandanna is popular among Telugu and Kannada audiences and has also worked in Tamil cinema.

While Crunchyroll has dubbed a relatively small number of shows in Hindi, it has more titles subtitled in Hindi. That shows how challenging it is to make local language dubs (and subs) your main differentiator.

Dubs aren’t easy

“There’s dubbing, and then there’s dubbing for anime,” Crunchryoll’s McCollum says. Getting an entire series dubbed in just one language takes considerable time and effort. First, a team must translate the script and prepare dialogues in the local language. A cast of voice actors need to be finalised. And actual recording, editing, mixing, and mastering can take a considerable period of time.

Then, there are things to consider for technical finesse. “Matching the dubs to the lip flaps is very important to fans,” McCollum explains. “For example, in Japanese, ‘Hello!’ is ‘Konnichiwa’, which has four syllables. So ideally, you’d have to translate that dialogue to something that matches the way the character’s mouth moves for those four syllables.” Besides, he says, fans of popular titles have strong opinions on who should be cast as the voice of their favourite characters. And many demand ‘simuldubs’ of their favourite shows—airing the dubbed version of a show on the same date as the original.

So far, all of Crunchyroll’s Hindi dubs are being released much after the originals. K-drama fans have been fuming at Netflix for releasing dubbed versions of the latest shows after an entire season has aired. But simuldubs are often not possible because a platform or distributor may not have local rights to get the show’s script in advance and prepare a dubbed version for simultaneous release.

Without simulcasts in Hindi and other Indian languages, Crunchyroll may not have enough to differentiate itself from other platforms also offering these titles (in English). Indian anime fans tend to be urban and may be comfortable watching their favourite show in English dubbing or even in the original Japanese with English subtitles. Their priority will be to watch the show the moment it is released.

But with local language dubs, Crunchyroll may be able to introduce anime to a wider audience, even if titles release weeks or months after the original. So, what’s Crunchyroll’s priority here? Wooing loyal, existing fans? Or acquiring new ones?

Picking priorities

If the priority is to become the main destination for all existing anime fans in India, Crunchyroll has a steep hill to climb. It’s competing with mainstream platforms like Netflix and Amazon Prime Video for teenage and older audiences, while children even have access to shows in their own languages on widely distributed television networks. Existing loyalists of the anime genre may not even be looking for Hindi, Tamil, or Telugu dubs of the latest anime; they will pay for a platform with the widest, most updated catalogue. Therefore, simulcasts (airing a show on the same day globally) and simuldubs are going to be crucial for Crunchyroll’s success with this audience in India.

However, there is another market opportunity here: to introduce newer folks to the anime genre. Shows that became popular on Indian television in the 2000s were aimed at children and young teens, and were mostly devoid of violence or adult themes. But contrary to popular perception (in India), anime isn’t just for kids. Shows like Jujutsu Kaisen and Chainsaw Man are recommended for older teens or adults only. By introducing these shows in Indian languages, Crunchyroll has a chance to introduce anime to adults as well.

Anime platforms like Crunchyroll can look to successful K-dramas for inspiration. I wrote in this edition of The Impression about how K-dramas in local languages have become part of family TV time in India. One big reason is that these TV shows are mostly about family relations and the ‘tradition vs. modernity’ theme that Indian audiences are familiar with.

But many popular anime titles have enough violence or adult content to put off Indian families.

That said, Crunchyroll has had early success in wooing “family” audiences. This May, it partnered with parent Sony to distribute the Japanese anime Suzume in theatres (while PVR distributed the film in India). The coming-of-age story of a young girl who saves Japan from disasters earned ₹10 crore (~$1.22 million) at the box office in a lean month. It was enough to inspire Sanjeev Bijli, executive director of multiplex chain PVR-Inox, to look for more Asian language titles to release in cinemas.

Suzume’s success may be the start of something new for Crunchyroll’s ambition to go deep in India. But streaming is still a fledgling industry here, and anime is only one of its niches. To get another generation of Indians hooked to anime, so much so that they grow up watching it in a variety of local languages, is a difficult task. Crunchyroll has its work cut out.

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Twitter tweet

Oops-enheimer: India’s film certification body is so notorious for cutting ‘objectionable’ content even from A-rated films, that Universal Pictures reportedly sent a self-censored version of Oppenheimer to be certified. This version has actress Florence Pugh in a CGI-d black dress with sex scenes blurred out or zoomed in. Despite this, the film is now facing backlash from people offended by a sex scene where Oppenheimer quotes the famous “I am become Death…” from the Bhagavad Gita. A government official has written a “letter” to the makers of the film asking for it to be deleted. India’s minister for information & broadcasting has asked the board to explain how the film was approved with this scene.

Invading territory: Why on earth does Twitter have a giant ‘X’ on its website and official headquarters? Owner Elon Musk is rebranding the social media platform to become an AI-powered “marketplace of ideas, goods, services, and opportunities”. What does that mean? Musk has previously said he wants to create a super-app along the lines of China’s WeChat. But as Bloomberg’s Matt Levine puts it, Musk could have launched one without spending $44 billion buying Twitter.

Meanwhile, TikTok is getting into several territories at once. It has launched music streaming in Indonesia and Brazil. It has introduced text posts with music and stickers, much like Instagram Stories. And it is planning to launch e-commerce operations in the US to sell cheap, China-made goods to compete with shopping apps Shein and Temu, The Wall Street Journal reported.

No thanks, I’m good: Streaming platforms are passing up on dinner table scraps. They’re refusing to pay for ‘niche’ movies that haven’t done well in theatres or are marred by political controversy, Mint reports. Nandita Das’ Zwigato, starring late-night host Kapil Sharma, has had no takers for a digital release. Platforms are also steering clear of Vipul Shah’s hit film The Kerala Story after it was criticised (and taken to court) for misinformation and hate speech.

Local content is anyway not the big money-maker for international platforms. An analysis by Variety found that Netflix still relies on US originals to draw audiences globally. In India, of the total number of hours audiences spent watching originals on Netflix, only 15.5% were for shows made locally. Only South Koreans are watching more local content on the platform than Americans.

It’s giving… panic: Spotify reported its earnings this week, and the numbers reflect the fiasco at its podcast division. The company made a €302 million (~$334 million) loss in the June 2023 quarter, mostly because it spent €91 million (~$100 million) on “efficiency expenses” in the quarter. That includes severance paid to laid-off employees and other expenses associated with recent cost-cutting measures, such as scaling back the podcasts division. Last month, the company fired 200 people and merged its podcasting acquisitions, Gimlet Media and Parcast, into Spotify Studios. It also cancelled a number of celebrity-studded podcast shows.

However, Spotify also had its biggest jump in premium subscribers ever this quarter. It now has an all-time high of 551 million monthly active users (pdf). Yet, the company’s shares fell over 14% after it announced the results.

Trumpet 🎺

BookMyShow/Instagram

We hung up on their sales teams and walked swiftly away from their credit card kiosks at the mall. Now, it seems banks are all out of ideas on how to push their credit cards.

This week, ticketing platform BookMyShow began selling tickets for comedian Trevor Noah’s first ever India tour. But for now, only people with a Kotak Mahindra Bank credit card can buy tickets. Sounds like a straightforward sponsorship deal, right?

Not entirely. You can register to buy a ticket early, but registration means you agree to be contacted by a Kotak Mahindra Bank sales representative. The landing page for the event says the bank call will get you started on a credit card application, but it’s unclear if you need to have one before you can buy early tickets to the show. Ticket sales will open for regular folks only 48 hours later.

Are people actually signing up for a credit card just to get tickets to this show? If yes, Kotak Mahindra Bank may have stumbled onto a genius funnel for sales leads. How soon before we see mandatory credit card sign-ups for concerts, movies, or even local marathon events? PS: if you know someone who got a Kotak Mahindra card for this, write to me!

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

The entertainment industry is still abuzz with speculation over last week’s big news break. The Wall Street Journal reported that Disney is seeking a buyer or partner for its India business. This includes Star India, a sprawling media empire with TV, movies, a streaming service, and more.

Many have dug into why Disney might want to get rid of Star just four years after inheriting it via its 2019 acquisition of 21st Century Fox. One big reason is the decline in Disney+ Hotstar’s fortunes ever since Star lost the streaming rights to the Indian Premier League, which brought in most of the streaming service’s paying customers. Bob Iger, who returned as Disney CEO in November after less than a year in retirement, is also keen to put his house in order rather than worrying about traditionally high-volume/low-profit markets like India.

But what of Disney’s existing business in India? Forget Star India and Hotstar; all’s not well with what Disney India has already.

Digging Under the House of Mouse

Evan Fitzer/Unsplash

Disney has tried to enter India a few times, starting with a joint venture with the KK Modi Group in 1993, which ended 10 years later. In 2006, Disney bought a stake in UTV, the movie and TV studio that Indian entrepreneur Ronnie Screwvala founded in 1990. It began with the acquisition of entertainment channel Hungama TV and ended with Screwvala selling the entire company to The Walt Disney Company (Southeast Asia) in 2012. Then, in 2019, Disney’s acquisition of Rupert Murdoch’s 21st Century Fox kicked in, and Star India became part of the House of Mouse.

But, in the last five years, Disney India (UTV) has had a steady decline in fortunes.

Harish Arjun/The Signal

In FY19, UTV had a big jump in net profits. This was for two reasons. One, it deferred tax expenses worth over ₹340 crore (~$41.4 million). Second, it nearly halved its cost of materials consumed: in this case, primarily the cost of producing movies and TV shows. But since then, there has been a steady decline in the size of the business.

In FY18 and FY19, Disney also shut down two UTV subsidiaries. Among them was gaming studio UTV Indiagames, which was best known for its cricket mobile games that were officially licensed by the International Cricket Council and the Indian Premier League. Hotstar was already becoming the number one online destination for sports, and Disney had a cricket gaming arm in the bag already. But it didn’t work out.

In 2015, NDTV reported that the gaming studio was shutting down. Disney had reportedly decided the studio’s revenue projections were unrealistic and that outsourcing game development made more business sense.

The result is clear: since then, UTV’s revenue from the gaming and interactive vertical has dropped to a negligible amount.

Harish Arjun/The Signal

But this isn’t just a Disney India problem.

A Shift in Priorities

In the 2010s, Disney struggled to make gaming work. This story in Collider has a timeline of the company’s failed attempts to run Disney Interactive before shutting down parts of the business and exiting in-house game development altogether in 2016.

But gaming wasn’t a particularly big part of the UTV business. Its bread and butter was movies and TV. And Disney took over, only to downsize or shut these down in the next few years.

In 2016, Disney exited the Hindi film production business entirely. It focused on Hollywood film distribution, TV, and licensing and merchandising, The Economic Times had reported then. The Ranbir Kapoor and Katrina Kaif starrer Jagga Jasoos (2017) was UTV Movies’ last Hindi production. As a result, revenue from the movies business fell from ₹337 crore in FY18 to just under ₹20 crore in FY22.

UTV’s television and media segment had been growing before the pandemic, but very slowly. However, once the pandemic hit, the division’s revenues fell by a third to ₹378 crore (it was just a little lesser in FY22). However, it improved its profit margin.

But the writing was soon on the wall. Disney began changing priorities and exiting the linear TV business altogether in Asian markets. In 2021, it shut down 18 TV channels in Hong Kong and Southeast Asia. It also retired the UTV brand of TV channels in India. In March this year, it switched off all its English general entertainment channels (GEC), including Star World. In June, the company closed its six remaining linear TV channels in Southeast Asia, Hong Kong, Taiwan, and Korea, moving all that content to Disney+ instead.

What’s left? Disney has licensed merchandise, part of the Disney Consumer Product business under UTV. But it has grown by just ₹4 crore in five years to ₹14.66 crore in FY22, UTV’s filings show.

The only thing that has ballooned is UTV’s support services business. The division offers financial, admin, and IT-related services to Disney’s group companies in India.

There’s an argument that perhaps Disney just doesn’t get the India market, and was unable to let UTV function in a way that worked for local preferences. Veteran media journalist Vanita Kohli-Khandekar spoke more about it in this episode of The Signal Daily.

But none of this should have mattered, because Disney had acquired Star.

Boarding the ‘Star’-ship

While UTV declined, Star India grew steadily across subscription, advertising, licensing, and the movie distribution businesses, consolidated filings show. Once the pandemic hit, everything took a beating (except subscription). But come FY22, everything is back to 1.6x to 2x of FY18 revenues. Only film distribution is still a fraction of pre-pandemic levels, a problem plaguing the entire movie business, from producers to exhibitors like PVR-Inox.

Meanwhile, Hotstar has grown steadily in India, reaching over ₹3,200 crore (~$390 million) in total revenue and over 40 million subscribers in FY22. That financial year was also its biggest year of growth: advertising revenue doubled, subscriptions grew 1.6x, and even relatively minor licensing revenue increased by a massive 15x.

But despite all these efforts, the business failed to make a profit. In FY21, it had made ₹600 crore (~$73 million) in losses after tax. It managed to nearly halve that to about ₹343 crore (~$41.7 million) in FY22. That was Hotstar’s final year of streaming the IPL, and FY23’s figures will likely look a lot worse. Disney reported it lost four million streaming subscribers globally, largely due to Indian users who abandoned Hotstar after IPL 2022.

Hotstar’s parent could have steadied the ship as its ad and subscription revenues from TV channels improved after the pandemic. But Star made significant losses after tax well before the pandemic. It posted a loss of ₹1,216 crore (~$148.1 million) in FY19 and ₹489 crore (~$60 million) in FY20, the first year after the merger with Disney kicked in.

The Wall Street Journal had reported that Star India is expecting to lose money in Disney’s financial year 2024 (from October 2023 to September 2024) and a 20% drop in revenue in the 12 months ending September 2023. Star aired IPL on television only this year, but a bruising fight for ads with rival Viacom18’s JioCinema meant it lost out on potential revenue, even airing some matches on free-to-air channels.

Meanwhile, Star didn’t seem to have a backup plan for its streaming service Hotstar once the IPL was gone. It did not consolidate on the live sports proposition by investing heavily in other properties, except in cricket. The fiction content pipeline was also a little dry. In this edition of The Intersection, I wrote about Hotstar’s changing priorities from expensive web shows to cheaper, TV-like content that isn’t behind paywall.

JioCinema, meanwhile, was ready with a plan to hold on to viewers it acquired during the IPL season. Since the end of the tournament, it has been releasing a new show or movie every Friday; it also brought premium libraries from HBO and Universal to the platform for ₹999/year.

So, who fumbled the ball? Disney already tore down one business it acquired under Iger’s leadership. UTV is a shadow of its former self, but it shouldn’t have mattered because Fox-Star was supposed to take its place. That, too, could not live up to the demands of the House of Mouse.

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Faris Mohammed/Unsplash

Cloud, Silver Lining: It’s been a rough couple of years, but India’s media and entertainment industry may still be good to go. It’s expected to grow 9.7% every year to be worth $73.6 billion by 2027, financial consulting firm PwC predicted in a report. This is despite a decline in advertising revenue worldwide because of dropping consumer spending. This week, Sony India reported its net profits grew 11% in FY23, although its advertising revenue fell. Some dealmaking may help these companies boost growth.

Speaking of which, now that Zee’s promoters are banned from holding top management positions in listed companies, Zee Entertainment has set up an “interim” committee to manage affairs. The fate of the Zee-Sony merger, meant to be run by Zee CEO Punit Goenka, still hangs in the balance.

That was fast: Whatever happened to the “Twitter killer”? The number of daily active users on Meta’s Threads, released earlier this month, has halved in just one week. Users are spending a lot less time on the app after the initial frenzy when 100 million people signed up in record time. Research firm Sensor Tower came to the same conclusion: after a golden 72-hour period, active users and time spent have been declining. The Musk vs. Zuckerberg cage match is still very much on. Here’s Musk, tweeting that Zuckerberg “doesn’t seem to care” about Threads because he’s stopped posting on it.

Snip Snip Police: They’re at it again. India wants to independently review all streaming content for “obscenity” before release, government officials told streaming services like Netflix and Disney, according to a Reuters report. The meeting was held last month and the government has proposed an independent panel to remove “unsuitable” content, much like the censor board does for films released in theatres. Platforms are objecting, but the officials have asked them to consider it. In a meeting this week, the minister for information & broadcasting drove home the point again.

Last month, India’s health ministry told streaming services to insert at least 50-second long anti-tobacco warnings at the start and in the middle of any scenes of tobacco consumption. Platforms are challenging the rules.

Rage Against the Machine: Actors have joined the writers’ strike in Hollywood. Last week, the actors’ negotiations with studios fell through over a list of unmet, common demands, including better compensation from streaming and pushback against AI. Variety argued that for the strike to end, studios will need to have a transparent industry standard for measuring viewership on streaming platforms. That data will determine how actors, writers, and other entertainment industry professionals are paid residuals every time their content is streamed. But studios, locked in competition and trying to make streaming profitable, are reluctant to make numbers public.

Trumpet 🎺

Twitter tweet

There is so much to explain in this one that I’ll just get right to it. American TikTok has discovered an old Japanese live-streaming trend called NPC (non-playing character) streaming. Young women go live on the app, cosplaying as the background character in a video game.

But the attraction (rather, fetish) is that a user sends a virtual gift to the live-streamer, and she responds with a pre-set action, sometimes also acknowledging your gift by calling out your name. So, an ice cream cone gift gets an “Ice cream, yum!” response, while a cowboy hat and moustache gets you a “Hee Haw!”.

This explanation delves a little more into why users enjoy such content. The bottomline: it’s a rush to feel like you’re controlling someone online.

For everybody else, this is a money churner. In just an hour-long livestream, a creator can be bombarded with hundreds of gifts. She keeps the money and the platform gets a cut, all to please some people looking for a reaction to a virtual rose, hat, or ice cream.

How soon before this kind of content becomes popular here? In India, virtual gifts are now everywhere on short-video platforms, from Instagram Reels to YouTube Shorts to homegrown apps like Sharechat’s Moj, in both live streams and regular videos. And if there’s anyone who’s always willing to pay on social media, it’s a man with a fetish.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Note: A previous version of this edition incorrectly stated the price of a JioCinema subscription as ₹999/month. It’s priced at ₹999/year.

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

When I’m headed to the movies, I like to make it in time for the previews. I’ve already seen it repeatedly on YouTube, but I’m really looking forward to watching the ‘prevue’ of Shahrukh Khan’s Jawan on the big screen. There aren’t even as many ads before the movie and in intermission anymore. You know the ones: the big Bollywood icon telling you to dial for help, the string of actors asking you to get dressed for a wedding. Or that evergreen jingle reminding you there’s nothing cosmetic in this toothpaste.

But less toothpaste in the movies is a warning sign of poor health—of the cinemas.

Cinema’s Toothpaste Test

Jake Hills/Unsplash

Manyavar, Vicco, and JustDial are just a few of the big, national brands that have consistently been advertising at the cinema hall. But, post-pandemic, the movie ads are drying up. India’s largest multiplex chain PVR-Inox is currently averaging about 12 minutes of ads in a movie, even though it has space for up to 19 minutes, the company told investors in a call (pdf).

Almost every other major metric measuring Indian cinemas’ performance is running below pre-pandemic levels – occupancy rates, footfalls, number of tickets sold. Now this year’s June quarter is also probably a washout after Bollywood delivered a string of flops including that mega disaster called Adipurush. Contrary to expectations, the latest Indiana Jones didn’t stick the landing either.

Cinema owners are upbeat about July at least. Tom Cruise’s Mission Impossible 7, Christopher Nolan’s Oppenheimer and Margot Robbie’s hyped Barbie are all releasing back-to-back this month. And they’re all running an IMAX version too, meaning cinemas have a chance to earn more from higher priced tickets.

Getting people back to the theatres and buying more tickets is a mission critical for the industry, but there is another crucial source of income that hinges on its success–ads.

Cinemas are barely earning from advertising since the pandemic. If you take PVR-Inox as a yardstick, advertisement income in FY23 was still 31% lower than what both multiplex chains earned together in FY20, per its latest reported earnings (pdf).

These dire straits have prompted another cinema business merger (of sorts). Last week, in-cinema advertising firm UFO Moviez announced two joint ventures (pdf) with Qube Cinema Technologies, which sells films distribution and screening tech and also delivers in-cinema ads. One of the JVs will focus on in-cinema advertising, combining the ad inventory in approximately 6,500 screens served by both companies, along with other ad spaces off-screen (say, displays in a theatre’s box office area) and on UFO Moviez’ Caravan Talkies, a movie screening on-the-wheels meant for rural areas.

Like the cinema owners, UFO Moviez has had a hard time since the pandemic. The company’s total income in FY23 was below what it earned even in FY19 and about 32% lower than total income earned in FY20, according to its latest available numbers (pdf). That’s pretty much in line with PVR-Inox’s drop in ad revenue too.

But unlike cinemas, the fortunes of firms like UFO Moviez aren’t directly linked to the box office success of individual films. Rather, they need a consistent run of hit films that brings audiences back and boosts advertisers’ confidence.

“So, while we mention the success of films like Pathaan in the last quarter and our expectations for Adipurush this quarter, it doesn't mean that these particular films will significantly contribute to our overall revenue,” UFO Moviez’ chief financial officer Ashish Malushte told investors in a call this May. “Our biggest challenge, and one we are handling well in my opinion, is to regain the trust of advertisers and bring them back to our medium.”

Movies are performing so patchily, it’s possible that this consistent period of good performance may not come for a long time. UFO Moviez’ management had said two factors were hurting their business the most. One, the drop in ad spends by the central government had eaten into their earnings and two, meeting minimum guarantees in ad revenue means a larger percentage of their total income was going to theatre owners.

“Cinema is a fragmented market,” Rajesh Mishra, executive director of UFO Moviez, told The Impression. “The whole idea of this JV is to offer more consolidated [advertising] inventory, give them wider coverage and more national reach.” Mishra added that as a JV, both companies will also have more feet on the ground, allowing them to reach out to potential advertisers more aggressively.

Naturally, a good fix for the time being is consolidating inventory. Qube Cinema has ad inventory in over 3,700 screens, primarily in Tamil Nadu, Andhra Pradesh, Karnataka, Kerala, and Telangana. UFO Moviez has about 3,300 screens in its ad network. Together, they might be able to withstand the overall slowdown in ad spending as well.

UFO Moviez’ Mishra says there is a very long tail of advertisers among smaller, regional brands who only place ads in theatres in one state or one city. While they’re still active, large brands with national reach are still not spending as much as they did pre-pandemic. One such set of advertisers are FMCG companies whose spending forms the bedrock of India’s advertising industry (especially TV). Mishra added that the September quarter looked promising, with several Bollywood and South Indian films lined up for release.

So, while the performance of stocks like PVR-Inox (down 1.6% year to date) could be a good way to check if the movies business is recovering, the real test is in the dealmaking and stock performance of companies like UFO Moviez (down over 15% year to date). Only when those toothpaste ads start rolling long enough before your favourite movie can you say, confidently, that cinema is back.

Telegram Tipsters lean into Threads

Chris Curry/Unsplash

Zuckerberg’s Twitter clone is on fire. Threads has hit 100 million sign-ups in a record five days, surpassing ChatGPT’s record as the fastest growing consumer-facing app. What might have helped is that anyone with an Instagram account can easily sign up for a Threads account. Naturally, that means droves of Insta-natives are coming to the text-first platform, mostly fashion folks and small-time celebrities. And then, there are finfluencers.

The big names like CA Rachana Ranade, Akshat Shrivastava, and Sharan Hegde have already racked up thousands of followers on Threads in a matter of days. But, Telegram traders are also showing up on the platform in droves. Threads’ search capabilities are nonexistent right now, but a cursory search for usual names and keywords throws up hundreds of options traders’ accounts offering stock market calls, posting screenshots of their supposed trade profits, and urging people to sign up for their courses and their Telegram channels.

Take options trader Aakanksha Gupta for example. She has over 150,000 followers on Twitter, about 41,000 on Instagram, and nearly 80,000 subscribers on her Telegram channel ‘Aakanksha Options Learning’. This channel is where she sells her options trading course (often with discounts for channel subscribers), offers trading targets on various indices, and posts screenshots of profits that her clients say they made on their trades. Since last week, she’s been posting on Threads where she already has 2,600 followers. She’s been posting a link to her Telegram channel on Threads along with a mix of quotes, some markets analysis, and testimonials from the students of her options trading courses.

On her Telegram channel, she’s told followers she’ll be posting a lot more on Threads. Here’s a message from her Telegram channel from earlier this week:

“Like this thread app so much…Going forward, will be putting knowledgeable content on it. I hope it doesn’t become gossip platform again 😂😂”

Apart from these known names, hundreds of telegram channel finfluencers are now on Threads, with a few thousand followers each. Many haven’t posted yet (like this account that has over 74,000 subscribers on its Telegram channel) or are mostly driving sign-ups to their Telegram channels (like Aakanksha Gupta) or their trading courses (like Apoorva Sharma and Abhishek Kar).

Add all this to the already long list of platforms regulators and exchanges must monitor for rule-breaking finfluencers. Threads is so new, it doesn’t have the standard disclosure features to indicate paid partnerships on the platform. The Advertising Standards Council of India made these disclosures for influencers mandatory last year (although these are guidelines).

Threads is too new for regulators too. Already, the National Stock Exchange has been issuing notes of caution against illegal brokers offering stock tips and guaranteed returns via messaging apps, Telegram channels, and custom websites. In the past few months, NSE has issued at least one such ‘Caution for Investors’ notice every week, sometimes multiple such notices on a single day.

Remember, Sebi has also been cracking down on finfluencers who offer investment advice without being registered investment advisors (read more about one such high-profile case in this edition of The Impression). Since then, these finfluencers have been scrambling to get hold of a Sebi registration licence, often using others’ licences and even ‘renting’ them out to dispense investment advice to clients. Aakanksha Gupta, for example, says she’s a research analyst with another Sebi-registered research analyst (not investment advisor) named Chaitanya Lapsia. There are no disclaimers about her Sebi-registration status on her Threads account. And Telegram channel operators have little in their bio except for a link – to their Telegram channels.

These are still very early days for Threads and there’s no guarantee the platform will even survive once the hype dies down (remember Clubhouse?). But until it’s around, finfluencers may have found one safe haven from prying (regulatory) eyes.

Last Scroll Down📲

GIPHY

No rest for the weary: Zee Entertainment’s owners can’t catch a break. Last month, Sebi banned owners Subhash Chandra and Punit Goenka from taking any key management position in any listed firm (pdf) over allegations the family siphoned off money using a web of subsidiaries. Then, Zee moved an appeal against the interim order and this week it was rejected. Zee needs to close its terribly delayed merger with Sony India, but it may have to do so without Zee chairman Punit Goenka at the helm. It’s a hard choice–get the merger done or hold on to the top job?

Not so hot on Star: Disney is looking for financial help on Star India. It is in early talks with potential investors about doing a joint venture or an outright sale, Wall Street Journal reported. Star India’s earnings for the year ending September 2023 are well below what Fox had projected when selling the business to Disney. One big reason–the loss of IPL rights after which subscribers are leaving Hotstar in droves.

Snakes and Ladders: Taxes are inevitable, but they can be unpredictable. The government has decided to impose 28% GST–-India’s highest tax slab–on all online real-money games. What’s more, this will be charged on the entire value of a real-money game’s prize pool, and not on the platform’s fees. Online poker, rummy and fantasy gaming companies say this will wreck the industry. Meanwhile, cinema owners are in luck; the food and drinks they sell in theatres will now be taxed at 5%, not 18%. But, if the food is sold in combination with a movie ticket, it will be taxed at 12%, the same rate as the ticket.

Hollywood Halt: It might all come to a screeching halt. Hollywood’s actors guild SAG-AFTRA might soon join the ongoing writers’ strike, the first time in 63 years that both groups of professionals halt work over disputes with big studios. The actors’ concerns are similar to writers’ – controlling the use of AI in filmmaking and better compensation terms from streaming services. A group of top studio CEOs is asking for a federal mediator to run talks with SAG-AFTRA and prevent the strike, Variety reported.

Ban-Ban: Is it better to ban an app or the entire internet?  India’s telecom regulator TRAI has floated a consultation paper (pdf), proposing rules that will let it selectively ban apps in times of ‘civil unrest’ as opposed to the entire internet. TRAI also wants to bring communication apps like WhatsApp and Signal under its licensing regime, rather than leaving them to follow the IT Act. Telecom companies support this; they say these apps act like telecom companies with their calling and messaging services, but they’re free of TRAI’s onerous licences.

Trumpet 🎺

‘Resurrecting’ a deceased music star isn’t an easy thing to do technically. In Moosewala’s case, the controversy surrounding his life and violent death makes it an even more complex decision. But here you have it: a tractor racing down a suspension bridge, a massive aircraft with “Moosa Forever’ emblazoned on it, and the man himself–Sidhu Moosewala singing to the camera atop a (CGI) skyscraper.

Chorni is Moosewala’s fourth posthumously released song. This one has a collaboration with R&B artist Divine. Since its release last weekend, the song is already number 1 on YouTube India’s trending music videos with over 14 million views.

Inside Motion Pictures worked on special effects for the video (they’ve worked on Moosewala’s other music videos too). Chorni has a long roster of special effects creators including a dedicated deepfake artist, and separate 3D model artists for Sidhu Moosewala and his tractor featured in the video.

Artists have lately been using deepfake technology to create richer, more varied videos. Among the earliest successful attempts was Kendrick Lamar’s The Heart Part 5 released in May last year; Lamar used deepfake technology to morph his face into the likeness of several controversial Black stars including OJ Simpson and Kanye West.

Official deepfake ‘resurrections’ of deceased artists are a little less common (we have seen holographic projections though). Moosewala’s family, too, is reportedly trying to put together a concert of the star using holograms. Until that happens, deepfake tech does the job. This is a short breakdown by deepfake artist Insight Keti on how the team featured a singing Sidhu Moosewala in another posthumous track Mera Naa.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

It’s been three months since we officially launched The Impression! Since then, this newsletter has covered a wide range of topics: from films and cinemas to streaming platforms’ business models, the business of social media and regional music, where the creator economy is going and how new regulations are changing it.

Do check out the previous editions. And If you like what you read, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

This week, let’s talk about love stories. Fans of the Korean musical sensation BTS will know the purple heart is a commonly used symbol for love, trust, and support. Korean culture has had a powerful impact on Indian audiences, carving a space especially among Gen-Z audiences with their music and, now, their K-dramas.

Now, we’re seeing the second-order effects of this ‘Hallyu Wave’. Indian films have long been associated with the Love Story™. The hero and the heroine meet, fall in love, face insurmountable odds, and fight against them to unite (or perhaps perish in the pursuit of love).

But relatable stories of young love on television have changed, not least because technology has transformed the way young people meet, fall in love, and build a relationship. Older (Hindi-speaking) Indian millennials may have fond memories of ’90s TV shows like Just Mohabbat or Hip Hip Hurray, and younger ones may have grown up watching MTV Splitsvilla or Dill Mill Gayye.

Today, producers are making stories of young love, mostly for OTT platforms. So, are Gen-Z folks and their families in smaller cities and towns not watching love stories in their local language on TV anymore?

They are. It’s just that they’re nearly all Korean.

K-dramas and the search for desi young love

Ravi Sharma/Unsplash

Korean dramas have already been popular among urban Indian audiences for a long time. Now, they’re seeping through to traditional audiences who haven’t ditched the TV for streaming just yet.

“Non-English consumption of Korean dramas has gone up,” Anil Khera, founder and CEO of Mumbai-based production house One Take Media, told The Impression. One Take Media owns the India rights to a vast library of Korean shows, which it dubs and distributes in Indian languages. It also operates a (mostly) K-drama OTT platform of its own called Playflix.

“When OTT platforms went from being a niche to penetrating Tier 2 and Tier 3 audiences, we decided to dub all our Korean shows in Hindi. Now, we are taking it to Tamil, Telugu, Kannada, and also exploring Bangla and northeast Indian languages,” he added. One Take Media’s clients range from TV channels, OTT aggregators of satellite TV providers, OTT platforms such as MX Player, and now, free ad-supported TV services such as Samsung TV Plus.

Since the initial days of bringing Korean IP to India (2016-17), Khera said the interest in dubbed K-dramas has risen dramatically. The first such spike in interest was during the lockdown and pandemic years (2020-21), when urban households began watching their children’s favourite Korean family dramas and love stories.

Since then, TV broadcasters are signing up for more Korean content. Tamil general entertainment channel Puthuyugam TV airs dubbed Korean dramas for its audience, while TV aggregators have a vast library of Korean shows or even a channel dedicated entirely to dubbed Korean dramas (including Airtel and Samsung TV Plus). Zee’s Gen-Z-focused channel Zing airs original Hindi shows focused on young love, but their biggest draw is the latest Korean dramas dubbed in Hindi. And if one were to go by their social media presence, they’re almost entirely marketing themselves as a channel for K-dramas in Hindi. An executive in the TV industry told The Impression that a to-be-launched Telugu general entertainment channel is also licensing Telugu-dubbed K-dramas for its programming.

“Broadcasters used to licence Korean content for a couple of months, but now they are signing them for up to a year,” said One Take Media’s Khera. “Mostly, general entertainment channels are building slots for dubbed versions of Korean shows in their regular programming, rather than launching a separate channel for them outright.”

General entertainment is TV’s largest genre when it comes to viewership, ad money, and the number of channels. In 2022, 72% of all TV content was made for general entertainment channels; about a fourth of it was in Hindi, as per the FICCI-EY Media & Entertainment report (pdf).

The demand for dubbed Korean dramas has grown so much that rights owners and production houses are scrambling to secure voiceover artists and sound studios. One Take Media said it now has vendors on retainer contracts who exclusively work on dubbing their K-dramas. Dubbing needs have caused other issues as well. Last month, Netflix irked fans when it postponed the release of two hot new K-dramas because their Hindi dubs weren’t immediately available, The Hindu reported. Episodes of the show released in one go in all other geographies.

For Korean shows about young love to become a part of Indian-language general entertainment signals a shift in their popularity. They’re no longer just a craze among young, urban, English-subtitles-watching streaming users. Regular Indians watching TV together with their families are also bingeing on them between episodes of their favourite local soap operas.

In hindsight, this is a no-brainer. Korean shows feature many more cultural similarities to Indian setups compared to shows from the US: conservative families, an urban-rural divide, and relatively shyer courtships. K-dramas are meant to be family entertainers, with characters seldom using explicit language, getting ‘too intimate’ with each other, or shown smoking and drinking, as is common in ‘edgy’ Indian streaming originals.

More importantly, compared to Indian ‘heroes’ in films and TV, Korean dramas offer a more progressive model of the male lead.

“Look at the way the boyfriend takes care of the girlfriend in Korean shows,” said Khera. “The boy is very caring, very gentle, very understanding. Girls really like that, they dream about boys like that. Also, the people in these shows are very young, very urban, very fashionable. The shows are aspirational.”

A model for ‘Young Love’

That aspirational quality for young people in relatively smaller cities and towns is also coming to stories of young love made in India. Among recent such shows are Pocket Aces’ Crushed and Sikhya Entertainment’s Gutar Gu, which depict young boys and men as caring and chivalrous rather than macho and ‘protective’ in the way such relationships are usually depicted in mainstream Indian pop culture. Also, both shows were set in smaller cities (Lucknow and Bhopal, respectively).

“We did a lot of primary research with young people, talking to audiences as they grow on your channel,” Aditi Shrivastava, co-founder of production house Pocket Aces, told The Impression. “The idea was that there is a lot of sibling-ness to relationships nowadays because you are figuring out life together. So, the intimacy and sex angle is actually really low in our show; the majority part of it is these other things. You’re figuring out how to expand your career together. In Crushed, you’re figuring out how to pass your exams together and do well in life.

Pocket Aces’ sub-brand Dice Media first became popular in 2016 with its hit romantic drama show Little Things, which dwelled on the daily ups and downs in the lives of a live-in couple, a rarity still in Indian society even among affluent, urban Indians.

This emphasis on ‘clean’ content that is still relatable for young people—who are online but live with conservative families in smaller cities—has made these shows a hit on streaming platforms, said Shrivastava. “You have parents who watch the shows. There is always a subtle, progressive push in all of our content without being preachy.”

Those subtle hints of progressivism become aspirational for smaller-town youngsters watching these love stories. “The idea is that when you are watching a conversation in a romance show, you should forget what the setting is because these conversations are universal,” said Shrivastava. “A couple in Varanasi may not be in a live-in relationship, but when they watch Dhruv and Kavya (from Little Things) discussing their relationship issues, the ‘live-in’ relationship is the aspirational part. All the other arguments, the stress of your job, the pressure of being long-distance—that is relatable to everybody who is young and in love.”

So, you have relatable stories of young love with a dash of aspiration, but ‘clean’ enough for the whole family to watch together. This is why traditional TV audiences are so drawn to K-dramas, even dubbed in the regional language of their choice, said One Take Media’s Khera. Hindi film producers, too, have been scouting projects that promise an all-in “family entertainer”, believing them to be safe bets in a tough box office (I wrote more about the strategy in this edition of The Impression).

Local web show producers aren’t just importing the winning K-drama formula, they’re also remaking the shows themselves. Last year, Pocket Aces acquired the rights to remake the Korean romantic hit Something In The Rain. The show is still being written, and casting will begin shortly.

“People have the misconception that if a story is simple, why does one need to adapt a foreign IP,” said Shrivastava. “But you are adapting a proven IP where the nuances of the character are already thought out. I would argue that in this genre, where the characters drive the story and not the plot, getting these nuances right is even more important.”

Television is still India’s largest medium of entertainment, but India’s young aren’t drawn to it. The FICCI-EY report quoted above found that during the pandemic years, TV viewership among 15-21-year-olds fell by 17% (a little higher than the overall drop in TV viewership in India). But Korean shows have their extremely elusive attention, and they’re also making their way into family TV time.

Perhaps that’s what TV needs to bring this generation of the young back to it: the sensitive, simple love story inspired by the best of Korean entertainment.

Last Scroll Down📲

visuals/Unsplash

Buyer, beware: The United States’ Federal Trade Commission has new guidelines on how brands should inform customers when they’ve paid a celebrity, influencer, or even a random buyer for a favourable review. Bottomline: ‘#ad’ on a caption isn’t enough. Influencers will need to replace disclaimers tucked away in the text with prominent, “unavoidable” texts within their videos. The FTC also wants to ban common practices such as suppressing negative reviews online. Back home, market regulator Sebi is finalising a discussion paper on guidelines for finfluencers.

Lost cause: Twitter lost its case against the Indian government last week. The Karnataka High Court dismissed its plea challenging the Indian government’s orders to take down tweets in the country. The court has also imposed a ₹50 lakh (~$61,000) fine on the social media company. Twitter had argued that these takedown notices don’t comply with India’s own IT Act. Twitter’s new owner Elon Musk said in a recent interview that upholding absolute free speech in countries like India wasn’t possible without endangering the company’s employees.

Too much, didn’t watch: We’re bursting at the seams with content. Variety reports that almost all major FAST (free, ad-supported TV) services have added more channels since the start of 2023. Three of them had no channels a year and a half ago; now, they have more than 400 combined. Bloomberg’s Lucas Shaw argued last week that traditional entertainment companies in the US may have permanently ceded ground to new media firms as the sheer volume of content being produced overwhelms audiences and divides their attention.

Down a notch: India’s national men’s cricket team finally has a new lead sponsor. Fantasy gaming app Dream11 is replacing beleaguered edtech startup BYJU’S on the blue jersey. Dream11 has reportedly paid a relatively paltry ₹358 crore (~$44 million) after BYJU’S ended its sponsorship contract a few months early. Last year, the BCCI had reportedly met to discuss the ₹86 crore (~$11 million) that BYJU’S allegedly still owed the cricketing body.

Copycat: While Twitter fights fires, Meta is grabbing the opportunity. It is launching a Twitter-like competitor called Instagram Threads this Thursday. Once live, Threads will join a list of would-be Twitter replacements, including Bluesky (backed by Twitter co-founder Jack Dorsey), Mastodon, and Indian app Koo. Meanwhile, Twitter began limiting how many tweets an account can see in a day, driving droves of users away to Bluesky and Mastodon.

Trumpet 🎺

puneetsuper_starrrr/Instagram

Can cringe be cool? What if it raised (and sank ratings) and even launched a merchandise business? Just ask Prakash Kumar aka Puneet Superstar aka Lord Puneet, the most prolific face of India’s meme culture.

Lord Puneet has been making videos since India had TikTok, but he shot to fame for his short, strange, meme-able short videos. In fact, many often embody that mad, self-destructive urge called ‘l’appel du vide or ‘A Call to the Void’. His videos are among the most popular meme formats on Indian social media.

Puneet Superstar has graduated from nearly three million followers on Instagram to a record-breaking appearance on reality TV show Bigg Boss OTT, where he was eliminated in just 24 hours. It has only fuelled his rise from the margins of meme culture to mainstream popularity. Reports suggest audience interest in Bigg Boss OTT on JioCinema may have slumped after his exit. And Puneet Superstar has his own line of ‘cringe’ T-shirts featuring iconic moments from his meme career, including the video that started it all: Lord Puneet screaming into the camera riding pillion on a bike.

For what it’s worth, the tees are priced at a premium, and one is already sold out. Could this be the beginning of the first successful consumer brand launched by a massy Indian influencer?

PS: this is a great early interview with Puneet Superstar on the Anurag Minus Verma podcast from 2021, just around the time he started to become a phenomenon.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

Are we in the Influencer Golden Age? Indian content creators started with humble, relatable vlogs, then graduated to subtle brand plugs in their videos. But then, the lockdown happened, and the so-called creator economy just exploded. We’re practically drowning in videos, podcasts, YouTube sketches, brand collabs, and entire series of branded content of all genres. Insta celebs have launched brands of their own or they’re showing up in web series and films. So, it was only a matter of time before they made their way to one of India’s biggest clients: the government.

Going Live with Government

BeerBiceps/Instagram

BeerBiceps aka Ranveer Allahbadia has been making videos on YouTube since 2015. This is his very first video, where he introduces himself as a 22-year-old engineering graduate and fitness trainer and talks about how he got fit. For two good years, his videos largely focused on fitness, with a smattering of dating advice.

But today, only one of BeerBiceps’ top 10 videos by views is fitness related. His fifth most popular video, with over 5.5 million views and counting, is from just 11 days ago. It’s an interview with India’s minister for external affairs, S Jaishankar. You’d think this is a massive departure from health food recipes and Tinder tips. But it’s in line with Allahbadia’s more recent emphasis on interviews and explainer videos on current affairs and culture.

In the last two weeks, Allahbadia has also done interviews with Piyush Goyal, who heads two cabinet ministries, and Rajeev Chandrasekhar, minister of state for the Ministry of Electronics and Information Technology (MeitY). The interviews are fairly long and touch on several subjects, from thoughts on Web3 and cryptocurrency to India’s foreign policy challenges to messages for India’s youth. But all three have sections plugging the achievements of the Narendra Modi-led government, notes on its leaders past and present, and defence from common criticism of those in power.

In short, these interviews seem to be branded content, just like a lot of other influencer videos. But the interviews don’t have any clear disclosures and appear “organic”. And all this is happening in the run-up to India’s general election scheduled for 2024.

These videos are also getting attention because it seems to be the first time that the central government is doing “branded” content with independent creators. And because there was no clarity on how exactly these government functionaries were appearing on a podcast talking about their political party, it got a little complicated.

Apar Gupta, lawyer and founder of the advocacy group Internet Freedom Foundation, pointed out that MeitY had issued a formal document to engage an influencer marketing agency. There were speculations that Allahbadia’s influencer management firm Monk Entertainment may have been officially appointed to make content for the government. If so, could it be the government was using public funds to market itself before the general elections?

This formal document (pdf) was issued in April, calling for social media or influencer management agencies to work for MyGov, a government platform run by MeitY. This is what the document says about the scope of work:

MyGov has released several tenders in the past for creative agencies and advertising firms. But this was the first time since it was set up in 2014 that it issued a call for influencer management firms.

Viraj Sheth, co-founder of Monk Entertainment, says the firm is not empanelled with MeitY or any other ministry. It’s unclear which agency, if any, was picked to fulfil this tender’s requirements. Getting that information will probably require a written request to MeitY under the Right To Information Act.

“MyGov gave us access to these ministers. Our podcasts are always produced by our in-house team,” Sheth told The Impression, adding that MyGov didn’t pay them or pick up any production costs, such as shooting or location costs. “We have a team of videographers and editors who take care of the production aspect of the podcast,” Sheth said. “We thought it would be interesting to have the cabinet ministers speak directly to the youth. Our goal is to be able to provide a platform where we bring in successful folks from various industries and present it to our audience.”

Fellow influencer Raj Shamani has also done interviews in the past two weeks with Madhya Pradesh chief minister Shivraj Singh Chouhan and Nitin Gadkari, Union minister of road transport and highways. Madhya Pradesh is going to the polls later this year.

Allahbadia’s episodes have done reasonably well: his interview with Piyush Goyal has over a million views, and the one with Chandrasekhar has over 200,000. Shamani’s interview with Gadkari has over two million views. And Sheth says Monk Entertainment is planning more for BeerBiceps. “We will be bringing on more political leaders from various other parties on our podcast as well.”

Another government collaboration to hit the papers this week was a campaign against misleading financial advice, featuring top finfluencer CA Rachana Ranade. This campaign, printed on the front pages of top newspapers, was odd because it seemed to warn against “fake” and “self-proclaimed experts”, asking people to only trust reliable advice.

Twitter tweet

But why would Ranade, an online finfluencer herself, feature as the face of this campaign? Markets regulator Sebi has already acted against other finfluencers for dispensing investment advice without mandatory registration (I wrote about it in this edition of The Impression).

YouTube didn’t pick a Sebi-registered investment advisor to front its campaign. To add to it all, the ad features a number of government logos, including MeitY (again!) and, inexplicably, the G20 Summit hosted in India. While this is an ad for YouTube (Ranade has done a previous campaign for the platform), there are no disclosures on whether there are any formal or informal contractual arrangements between Ranade, YouTube, and MeitY. MeitY’s Chandrasekhar quickly issued a clarification saying the campaign wasn’t an official ministry endorsement.

Ironically, the Advertising Standards Council of India issued guidelines on influencer marketing in February last year (pdf). Among its recommendations is using a “Paid Promotion” tag on YouTube or a “Paid Partnership” tag on Instagram, along with words like “Ad” or “Promotion” in captions.

But do you need to use this tag when no money changed hands for content and marketing? Sheth says MyGov simply gave Allahbadia access to the ministers. Allahbadia’s videos also now have a disclaimer saying these were part of an “unpaid” collaboration with MyGov.

There’s certainly no payment mandatory for access, but anyone in the content (or journalism) business will tell you that access usually comes with the expectation of mutual benefit. The interviewee gets softball questions that let them embellish their image, and the interviewer racks up the views and an audience. In such cases, the need for disclosures becomes a murky decision. Besides, such softball interviews with influencers or even journalists are hardly new. Startup founders, film actors, and established industrialists have been appearing on YouTube channels like BeerBiceps to promote themselves for some years now.

But what’s clear is that India’s creator economy has become important enough to become useful for political campaigning in the run-up to crucial elections. The BJP isn’t the only one appearing on viral YouTube channels. During his Bharat Jodo Yatra, opposition leader Rahul Gandhi did interviews with independent influencers, including Samdish Bhatia and Kamiya Jain (Curly Tales). Comedian Kunal Kamra interviewed Shiv Sena leader Sanjay Raut when Uddhav Thackeray was chief minister of Maharashtra.

Of course, it gives you a leg up in an election if you already run the central government and have the funds to empanel agencies for the job.

Mission: Rescue Cinemas

Shad Islam/Unsplash

This has not been a good month for the Hindi film industry and for cinemas. T-Series’ mega film Adipurush, reportedly Bollywood’s most expensive film at ₹600 crore, has flopped. Latest estimates suggest it made less than ₹300 crore at the box office. Theatres have now dropped prices for its 3D screenings to as low as ₹112 per ticket. But given widespread criticism of the film’s dialogues and visual effects, it looks like cheaper tickets aren’t going to bring in audiences. This is a lost cause.

That’s going to hurt cinema chains, especially the recently merged PVR Inox. The company’s stock was at a high on the eve of Adipurush’s release in anticipation that audiences would throng the theatres. Since then, the stock is down by about 8%.

Now, until the Shahrukh Khan-starrer Jawan and Salman Khan-led Tiger 3 release later this year, no Hindi film rivalling Adipurush’s size, scale, and hype is releasing anytime soon (one could maybe make an exception for Ranbir Kapoor’s Animal). What cinemas have to look forward to immediately are a bunch of highly anticipated Hollywood hits, including the latest instalments of Harrison Ford’s Indiana Jones and Tom Cruise’s Mission: Impossible franchises. That’s both a good thing and a bad thing.

The good thing is that Hollywood films have been more reliable at the box office than Hindi films lately (I wrote about this in detail in this edition of The Impression). But the problem is that tickets to 3D and IMAX-format Hollywood films tend to be far more expensive than those for Hindi films. Moreover, these films run more in multiplexes than in single-screen theatres. PVR Inox (and others) have been looking to get back to profits and, particularly, to pre-pandemic footfalls and occupancy rates. To do that, they need massy films with lower ticket prices and higher sales volumes. PVR has been offering lower prices and sales on tickets lately in an attempt to woo audiences.

But for this to really work, PVR Inox (and other cinemas) need more Prabhas and Shahrukh Khan starrers, not big-budget Tom Cruise IMAX productions. Where is the big-budget Bollywood crowd-pleaser? Maybe only Hollywood and Bollywood’s OG superstars can rescue Indian cinemas now.

What’s funny is that this exact same scenario is playing out in US theatres. A series of summer film releases have flopped at the American box office, including Pixar’s Elemental and DC’s The Flash, with collections below pre-pandemic levels. Just like in India, theatre owners there are relying on ageing superstars Ford and Cruise to spin their magic and get the cash registers ringing.

If you’ve seen Pathaan, there’s a post-credits scene that jokes exactly about this. Shahrukh Khan and Salman Khan, resting after a long fight on top of a train, joke about maybe taking a break after doing this backbreaking work for 30 years. But in the end they conclude, dripping with sarcasm: “bachchon pe nahi chhodh sakte” (can’t leave it to the kids).

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GIPHY

Video game supremacy: Studios just can’t get enough of video game IP. There is an animated series in the works on the pandemic-era breakout success Among Us at CBS Studios, Variety reported. Among Us is made by an independent gaming studio and only became popular in 2020, two years after it was first launched. The Wall Street Journal had argued that this is “golden age” of video game IP, and that films and shows based on globally loved games do a lot better than less appealing stories, such as Western folk tales that many cultures aren’t familiar with.

We want more: Direct-to-home company Tata Play has been selling OTT subscriptions to its TV channel subscribers. Now, it also wants the cord cutters. Tata Play MD & CEO Harit Nagpal told Mint that its OTT aggregator platform Tata Play Binge is now open to use for anybody with a smartphone or a smart TV, not just Tata Play subscribers. It’s also bringing in other premium OTT services like Apple TV+ to its bundle and even offering games. Bundling is the most important sales channel for subscription-based streaming services in India; it’s getting more and more important for premium OTT services (read more about it in this edition of The Impression).

Are you lonely? Short-video app Chingari will take your call now. The platform has rolled out a paid one-on-one video calling feature with what seems to be adult entertainers, Inc42 reported. Chingari defended itself, saying this was not a pivot to adult content but just one in a basket of features on the app, including web3 applications with its proprietary GARI token. Whether this is a pivot or not, Chingari will have a tough battle for success in NSFW content. Instagram, Snapchat, and even Twitter are way ahead in this niche too.

Screwing the client: Google may have been fooling its ad clients. New research has found that 80% of video ads Google serves on third-party websites violate its own terms and conditions,The Wall Street Journal reported. Google charges a premium but places these ads in poor-quality positions, such as muted videos or in auto-playing videos on the side of a website’s main content. Google has denied the claims, but large media agencies like UM Worldwide and clients like the US’ Centers for Medicare and Medicaid Services are concerned.

No money for news: These are tough times for news companies everywhere. ABP News shut down two regional channels, ABP Ganga and ABP Sanjha, and fired 47 staffers without prior notice, Newslaundry reported. The channel has been struggling for a while. Meanwhile, Canada has passed a new law directing Meta and Google to pay domestic news companies for links to their articles. Both companies have said they will probably restrict access to news from Canadian outlets on their platforms, including Google search results and the Facebook news feed.

Trumpet 🎺

T-Series has dropped yet another remake, sorry, “recreation”. And it’s getting it from Indian and Pakistani fans of Ali Sethi and Shae Gill’s Coke Studio Pakistan hit Pasoori, a rare achievement in these polarised times. It appears T-Series has officially licensed the song (presumably from Coke Studio) and has approval from its singer Ali Sethi.

T-Series isn’t new to getting hell for remakes. In April 2020, it sprung Masakali 2.0, a “recreation” of the cult classic song composed by AR Rahman and sung by Mohit Chauhan. Audiences had criticised that song too, as had Rahman himself (but subtly) in this tweet.

But, the fact is, remakes are almost always a safe bet, which is why they’ve become a big part of the successful music produced these days. Take a look at T-Series’ own YouTube channel. Of their top ten videos by views, six are remakes or recreations of older songs, including ‘90s Bollywood hit Aankh Maarey and Nusrat Fateh Ali Khan’s Aankh Uthi Mohabbat Ne Angrai Li. Clearly, remakes work. Even Sony Music India’s biggest hit on YouTube is a recreation of a Bengali folk song. Universal Music India’s biggest YouTube hits are Bollywood remixes from the 2000s, when the Hindi music industry first rode the remake high.

So, if you’re annoyed at the Pasoori remake, that’s fine. It’s already served its purpose; people are talking about the song and the upcoming film it’s in, called Satyaprem Ki Katha. But take a close look at that song you’ve been humming along to lately or working out to: it might be a remake.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

Have you ever checked out YouTube’s Music Charts & Insights page? If you have anything remotely to do with the business of music, you probably have this bookmarked. YouTube is India’s largest music discovery and streaming service by a massive margin, so this is what determines the fate of the music industry.

There are a few home truths about India’s music trends. One, Alka Yagnik is permanently India’s #1 artist on YouTube (followed by Udit Narayan). It’s probably going to take one more generation for her to lose the top spot.

Two, no matter when you check, the weekly list of trending and top music videos will almost always feature one Punjabi and one Bhojpuri music video. That’s the stranglehold regional independent music has on the Indian audience. Now, big music labels are jostling harder and harder for a share of this music segment, driving up costs. But, music streaming services aren’t exactly making big money in India. So, where is this path heading?

Labels chase regional music money. Is it even there?

Wave Music/Instagram

This week, Indians are listening to Bhojpuri sensations Khesari Lal Yadav and Shilpi Raj’s Aam Ke Swaad (the taste of mangoes) on YouTube. This track, produced by Bhojpuri music label Wave Music, is number 1 on India’s Trending music videos. It’s ahead of the latest music by T-Series, VYRL Originals (Universal Music), Zee Music, and other major labels.

Bollywood films seem to dominate Hindi music in India, but in this decade of YouTube’s domestic dominance, it is music in regional languages—Bhojpuri, Haryanvi, and of course Punjabi with a massive international appeal—are raking in the views and ad revenue on the platform. In the music streaming business, they are yet to catch up, but that hardly matters. The bulk of music consumption in India happens via the red play button on the ubiquitous Android phone.

This is why large music labels have been putting money into producing more and more regional language music. For example, Saregama launched its Hum Bhojpuri YouTube channel in 2019 and Saregama Haryanvi the very next year. Last year, the label announced it was setting aside ₹750 crore (~$91 million) to invest in new music; it also acquired a catalogue of 1,500 Telugu songs from regional music label Mango Music. Last week, it also launched Hum Bhojpuri’s FAST (free ad-supported TV) channel version on JioTV.

Meanwhile, Sony Music began producing Haryanvi and Bhojpuri music under the Sony Music Regional brand name in 2019. It has had only modest Bhojpuri success, with videos crossing 2-8 million views each. But in Haryanvi, it has hit the jackpot with tracks like Sumit Goswami’s Feelings (over 600 million views), and Raftaar and Rashmeet Kaur’s Ghana Kasoota (118 million views).

T-Series’ Haryanvi channel is also relatively newer, launched in 2018, although it has been producing Bhojpuri music for a long, long time. Meanwhile, Universal Music India signed a multi-year deal with a Mohali-based Punjabi label called Desi Melodies three years ago to exclusively distribute all their soundtracks. Desi Melodies’ biggest hits include Afsana Khan’s Titiliaan (starring Harrdy Sandhu and Sargun Mehta) and BPraak’s Filhall (starring Akshay Kumar and Nupur Sanon) with 892 million and 1.1 billion views each.

That’s still not as high as Desi Records’ 2020 Hayanvi track 52 Gaj Ka Daaman: it now has over 1.5 billion views on YouTube and became a viral sensation on short-video apps.

Clearly, the scales are slowly tilting towards non-film, independent, local language music. And everyone in the business now knows this.

“Yes, the big labels are now coming down to sign up Bhojpuri singers and actors,” Abhay Sinha, founder and CEO of Bhojpuri entertainment production house Yashi Films, told The Impression. “They will offer up to five times the going rate for a top singer and actor. That does drive up the competition and the cost of talent.”

But, Sinha says, Bhojpuri labels like his are simply focusing on looking for newer musical and acting talent. Thereby, they can ensure they keep up with growing demand without having to hike costs to the standards set by newer, deep-pocketed entrants.

What’s more, the top Bhojpuri stars don’t work exclusively with one label. The likes of Pavan Singh, Ritesh Pandey, Manoj Tiwari, Shilpi Raj, and Khesari Lal Yadav have music videos and movies with all major Bhojpuri labels, along with the national ones.

The Big Squeeze

So, the big national music labels want a piece of the regional action, and that is driving up music acquisition costs. But these costs have risen so much that Saregama says it is now having trouble finding music acquisition deals at a reasonable asking price.

“In fact, there is no catalogue deal that has happened anywhere in the market apart from the one single deal that we had done,” Saregama India’s managing director Vikram Mehra told investors in a call this May. “Just because the money is sitting with us, we are not going to pick up catalogues at bizarre prices.” Instead, Saregama will focus on picking up minority stakes in up-and-coming regional music companies.

Streaming accounts for almost all of the music industry’s revenues, with live performances coming in at a distant second. Of this streaming revenue, YouTube is the largest source of income for all big and small music labels.

Harish Arjun/The Signal

Harish Arjun/The Signal

Unlike other large markets, India’s music streaming industry is not driven by subscriptions. I’d written in a previous edition of The Impression about how Indian consumers are stubborn about wanting their entertainment to be free, even if that means watching a ton of ads.

Harish Arjun/The Signal

What this means is that music labels are ploughing in cash to acquire more and more songs, bidding against local rivals to snag top talent or striking deals with them. But streaming payouts remain extremely low in the Indian market. Music industry executives I spoke to told me the thumb rule is that most streaming platforms pay about 10-15 paise per stream, if not lower. And YouTube, as the largest platform, can pay as little as 1-2 paise per stream.

Saregama’s Mehra also said in the investor call quoted above that the average payout for a music label is about 10 paise per stream. Telecom operator-owned Airtel Wynk and JioSaavn are free to use. And in a recent interview, Spotify India managing director Amar Singh Batra said it was a challenge to get Indians to pay for music. Without paying subscribers, ad revenues are the only viable source of income for everyone, but it isn’t coming in quick enough for all major music streaming platforms. Instead, some of them are reportedly looking at ways to cut their payouts to music labels.

“Streaming companies don’t have much leverage when negotiating with large music labels,” Mairu Gupta, a senior music and sports media executive, told The Impression. “So, there is T-Series. And look at the artists that Universal Music and Sony Music represent. Can you run a music streaming service anywhere without the songs of Taylor Swift, Beyonce, Eminem, and Drake? So, if there is room to squeeze, it is only with smaller labels.”

And that squeeze may already be here, as prices plunge to 4-8 paise per stream for some regional and lesser-known music labels, a senior executive in the entertainment practice of a consulting firm told me. “Streaming platforms don’t have money to pay anymore,” he said. “There is no ad money coming in, so they want to rationalise costs and pay less per stream if possible. Some platforms like Gaana have gone subscription-only already. And if you see the ads playing on JioSaavn, they’re mostly for JioSaavn only.”

Saregama’s Mehra is hopeful that the “free tap” of music will soon be shut and that streaming platforms will manage to nudge Indians to pay for music streaming. But until the biggest platforms, especially YouTube, sign up for subscriptions, ad-supported free music will remain the dominant form of consumption. And the two-way squeeze between higher music costs and lower (or stagnating) streaming payouts will continue.

Local labels, however, are finding ways around it. One emerging channel is the rise of short video. “When YouTube ad revenue began falling by some 30% for us, we started getting revenue from Facebook Reels,” Yashi Films’ Sinha says. “So, we were able to keep growing our digital revenue.” Meta launched Facebook Reels India in March this year. Haryanvi songs Kacha Badam and Gypsy (Balam Thanedar) were among the top tracks in India on both Instagram Reels and Facebook Reels in 2022. Meta has licensing deals with almost all major labels for short-video properties across its apps.

New product launches like these offer some respite, but music labels are essentially on a treadmill. Any music video or song must rack up hundreds of millions of views and streams, and get monetised in as many ways as possible online for the producers to make some semblance of a profit.

For small, independent folks in the business, that means facing the heat and continually expanding their catalogue to where they can comfortably negotiate with streaming platforms. The dramatic rise of regional music’s popularity, especially in Haryanvi and Bhojpuri, should help. But they’ll always have to keep looking over their shoulder; ‘Big Music’ is in hot pursuit.

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Tenor

It’s not looking good: Zee Entertainment’s merger with Sony is on very precarious ground. Last week, markets regulator Sebi barred Zee’s promoters Subhash Chandra and Punit Goenka from taking any key managerial position of any listed company (or its subsidiaries). When they filed an appeal, Sebi responded with a 197-page reply documenting exactly how the Goenkas allegedly fooled banks and siphoned off crores of rupees, routing them to other Zee group companies and offering guarantees without telling the board. Reports suggest Sony is feeling jittery about the merger, although Sony denied this. What’s going to happen next? Remember: two years ago, Reliance Industries was also looking to buy a stake in Zee.

Down the drain: Cinemas just can’t catch a break. Bollywood’s big summer release Adipurush is shaping up to be a dud. On Day 4, film trade analysts estimated its daily box office collections had fallen by 75%. It’s already facing universal backlash for its weird dialogues and modifications to the original Ramayana plot. Early reactions to the films pushed PVR INOX shares down by over 3% on Friday; today, they are down another 1% already. PVR INOX needs a string of hits this year to turn around its corporate fortunes, and the Adipurush debacle is not helping. I wrote more about how this is the cinema business’ do-or-die year in this edition of The Impression. Maybe Karan Johar will come to Bollywood’s rescue?

That’s all, folks: Times Now’s chief editor and conservative primetime anchor Rahul Shivshankar has quit the news channel, Newslaundry reported. The reason for his departure isn’t known. Shivshankar rose to prominence at Times Now after its previous star anchor Arnab Goswami quit to start his own network, Republic TV. Shivshankar’s fellow primetime anchor Rubika Liyaqat also quit ABP News earlier this month to join Bharat 24 and launch her own YouTube channel.

Doctor’s orders: Parents, educators, and children’s healthcare professionals all warn that social media isn’t healthy for teenagers. But it’s hard to agree on a plan of action to protect the kids because no one has solid research on the effects of social media on teen minds, or even a definition of what social media is, reports The New York Times. Last year, a group of parents sued Meta for endangering children’s mental health with its addictive social media apps. This year, a number of US school districts also sued Google, Meta, and TikTok for ‘rewiring’ children’s brains.

Taken hostage: The Reddit Blackout is taking a turn for the worse. After major subreddits went private to protest Reddit’s plan to charge third-party apps for access to their APIs, some major subreddits have begun flooding their forums with porn to kill ad revenue and make it harder for users to browse content on the platform. Some others are flooding theirs with photos of British comedian John Oliver. Meanwhile, a hacker group called BlackCat is threatening to reveal confidential information on the social media network unless it is paid $4.5 million in ransom. It is also demanding that Reddit abide by the demands of the protesting Redditors.

Trumpet 🎺

Netflix/YouTube

Do we think about the ethics of what we are watching?

Our devices are so awash with content that we’re getting numb to choice. And perhaps now, only really messed up things excite us. Such as voyeuristic reality TV shows dissecting someone’s life. Or dramatised true crime documentaries meant to be binge-watched over a weekend. Or splashy pictures of our favourite celebrities caught in, well, human moments.

This is the subject of three episodes of Netflix’s cult classic Black Mirror, whose latest season was released this month. Joan is Awful, for example, deals with a world in which reality-style shows can be made on anyone’s life in real-time. All by harvesting intensely private details of their life via super-intrusive technology. It’s ironic that Netflix, a Big Tech firm with super-intrusive technology, has produced an episode with this theme. But the irony isn’t lost on them; in the episode, Joan is Awful streams on a Netflix knockoff service called ‘Streamberry’.

This meta, self-referential theme continues into the second episode called Loch Henry, about two young filmmakers shooting a documentary for ‘Streamberry’. The film follows the story of a gruesome serial killer in a small UK village, only to discover a dark family secret. Once again, the episode forces you to think about how the victims of horrific crimes feel when their trauma becomes nighttime entertainment for millions of viewers worldwide. Netflix had received backlash for its award-winning series Dahmer last year, mostly from the loved ones of the people Jeffrey Dahmer had killed.

Another episode, Mazey Day,is set in the not-so-distant past: the early 2000s with Nokia phones and dial-up internet. It follows the story of a paparazzi photographer who goes to insane lengths to grab a million-dollar shot of a troubled young actress and stumbles into a horrific situation. And while you feel disgust for the paparazzi and intense sympathy for their ‘victims’, the episode reminds us that we, the viewers, are why any of this is happening at all.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

“Senator, we run ads.”

This bemused one-line response from Mark Zuckerberg during his 2018 Congressional testimony launched a million memes (and a firm that teaches digital marketing). Surely a senior elected lawmaker should know how Facebook and other social media companies make money while staying free? Apparently not.

At any rate, social media companies are no longer relying on just ads to make money. They want our money directly, and they’re using increasingly creative ways to get us to spend. What’s more, this is already happening in India, which is everyone’s largest market by users but among the smallest by revenue. But platforms are rolling out user monetisation models such as virtual gifting, subscription-only content, and account verification, mostly on the back of the creator economy and businesses that rely on social media to make money or manage customer relationships.

Can social media make money directly from their massive Indian user base? That’s my first story for today.

Social media is coming for the ‘bag’

Aniket Narula/Unsplash

This month, Meta finally launched a paid ‘Verified’ programme in India. A blue tick on Facebook and Instagram will cost ₹699 ($8.5) per month via iOS and Android or a hundred rupees less if bought on the web (not rolled out yet). Still cheaper than Twitter Blue (₹900 a month on app stores, ₹650/month on web), but is it cheap enough?

On Twitter at least, blue ticks have lost their status symbol and instead become an object of ridicule and the preserve of bots. Just this week, blue-tick accounts were accused of tweeting in favour of Bajaj Finance in an apparent PR campaign (although Twitter influencer marketing campaigns are very commonplace). Twitter is also paying verified accounts a share of revenue from ads shown in their replies. But the catch is that only ads shown to verified accounts will count. Looks like the move is structured to try and push more users to pay up for a blue tick.

What sort of Indian users will pay for Meta Verified? If Twitter Blue’s rollout in India is anything to go by, businesses and large organisations will be among the first to sign up. Creators with a large audience base on Facebook and Instagram will probably also be in the queue. However, an important caveat: Meta is going to honour previously verified accounts. So, we’re not likely to see a bloodbath of lost blue ticks as we did on Twitter in India earlier this year. Verified accounts will also get access to more customer support (remember, Twitter fired most of its India team and has only one remaining office here).

But spending on verification makes sense most if you earn your living online. For content creators and businesses acquiring customers or engaging with them, a blue tick can be a business expense. Ditto for government functionaries and political party representatives who need social media for their campaigns.

But India is a notoriously low ARPU (average revenue per user) market. Meta’s Facebook, WhatsApp, and Instagram are among India's top five most-used apps, according to research firm Data.ai. Yet, Meta’s Asia-Pacific ARPU was a mere $4.61 in the quarter ended December 2022, compared with $58.77 for American and Canadian users (pdf). What’s more, almost all of the Asia-Pacific revenue was from ads, whereas 4% of US-Canada revenue for that quarter came from non-ad income.

Meta obviously wants to wean off just ad revenue. But there’s one more reason it needs Indian users to sign up to pay for services like Verified.

“We expect that user growth in the future will be primarily concentrated in those regions where ARPU is relatively lower, such that worldwide ARPU may decrease at a higher rate, or increase at a slower rate…,” Meta said in its annual report. India (along with Nigeria, the Philippines, and Bangladesh) contributed the most active users to Facebook and other Meta apps, but these users aren’t opening their wallets.

Introducing payments for access doesn’t always go as planned for social media companies. Take what’s happening with Reddit, for example.

Reddit has been looking for ways to jack up revenues as it prepares for an IPO. The messaging board is reportedly fixing sky-high prices for third-party apps to access its APIs. Reddit’s own app is not as popular as several third-party interfaces that are older and better designed, such as Apollo and Reddit Is Fun; they rely on Reddit APIs to function and sustain Reddit’s user base.

These apps are usually ad-funded and free to use, with some subscription plans, but high API charges will kill their ability to remain free. Several subreddits have gone ‘dark’ (set themselves to private) for 48 hours until June 14 in a concerted blackout of the platform. These include popular Indian subreddits like r/India and r/BollyBlindsNGossip.

Last month, Meta dedicated an event in Mumbai to popularise a bunch of other Instagram features. Among them was a number slides dedicated to Notes, a Stories-like feature that lets a user put up a text that any follower can view. Along with DMs (direct messages), Notes is the last frontier of apps that haven’t been monetised yet. “100 million teen accounts shared a Note in the past 90 days,” a senior Meta India executive told the press and creators’ meeting, also adding that “Notes trapping” (similar to thirst trapping but with an intriguing Note) was a new thing among younger users on the app. There doesn’t seem to be much independent documentation of this trend, but it’s clear that Insta wants to drive more usage to this feature.

So, will Indian users ever pay? There may be one way to make it happen: virtual gifts. All major social media platforms, from homegrown ShareChat/Moj to YouTube (in Shorts) to now Instagram, have slowly been rolling out virtual gifting to accounts of highly engaged or top content creators. Sending a gift (say, a sticker or a message of appreciation) has a very low entry point; it gives creators another stream of revenue, and platforms take a cut from every transaction. Instagram has been rolling out gifting in India since last month, and the cheapest costs about 10 stars (you must buy a minimum of 45 stars that cost ₹99 (~$1.2).

Meta has a similar feature on Facebook Reels. Instagram also has a subscription feature that allows users to pay to access paywalled content from creators. This revenue is also split between creators and the platform. But this hasn’t come to India yet. In an interview with me last month, Meta India’s head of content & community partnerships, Paras Sharma, indicated that this feature may not be on the top of the India team’s priority list.

Gifting has also worked for apps like Sharechat. Virtual gifting was a significant portion of its total revenue in the last financial year. There are other creative, low-cost ways to get users to pay up. For instance, Snapchat lets Indian users restore a broken “streak” (chain of private Snaps exchanged with another user) for as little as ₹9.

But these are low-cost, high-volume games. That means social media companies must change user behaviour to make it commonplace for users to purchase credits for virtual gifts or pay up for broken streams.

Just another feature for social media companies to push in the search for ARPU.

Speaking of Big Tech, The Signal is launching something new this weekend. My colleagues Roshni and Rajneil—polar opposites in their feelings about technology—will host TechTonic Shift, a no-nonsense conversation on all things tech. Check out the trailer here. You can listen to TechTonic Shift on Spotify and Amazon Music. Tune in starting this Saturday, June 17!

Audible India’s local redux

Audible/GIPHY

Audible India is piling on the local originals. This month, it is releasing a series of Hindi podcasts based on stories from the Marvel Cinematic Universe. These shows feature top Bollywood talent, starting with Marvel Wastelanders: Star-Lord, starring actor Saif Ali Khan. Another show based on Black Widow will star actor Kareena Kapoor.

Audible has been attempting to build a local connection with audiences in India ever since it launched here. The first attempt was in 2019 when it launched a free-to-listen app, Audible Suno. It, too, was packed with originals in Hindi starring the biggest Indian stars (Amitabh Bachchan, Diljit Dosanjh, Anurag Kashyap, among others). But two years later, Audible folded Suno into the main app, where its shows are still free to listen to.

Audible, like its podcasting rival Spotify, has been treading the line between being premium enough for its target audience but also packing in content with a lot of local flavour. However, it looks like doing both may be difficult. A look at the top charts of local audiobook rivals shows what actually sells among the Indian masses. On Kuku FM, Hindi romance shows like Ishq Ya Junoon and Ajab Sa Ishq top the charts with 20-30 million listens. On Pocket FM, Hindi adventure action originals such as Super Yoddha and Number Zero, are popular, along with romance shows like Ek Ladki Ko Dekha To and Silent Love.

Maybe Audible is on to something. Hindi action and adventure is clearly popular with mass Indian audiences. Besides, Marvel films are among the top earners at the Indian box office, as per PVR INOX’s latest presentation to investors (pdf). It helps that they’re dubbed in several Indian languages. “We continue to see significant increases in listening for non-English content, and regional languages are a key focus area for us going forward, including new Marathi, Tamil and Telugu titles,” Audible India head Shailesh Sawlani said in response to questions from The Impression. “In 2022, we saw 39% growth in paid member listening hours in India, and are also seeing exponential growth in our free tier.”

Audible’s best-performing genres are similar to local rivals’. “Over the past two years, our top five genres are self-development, Indian mythology, horror, romance, crime/thriller, and slice of life,” Sawlani said. “We also see a good share of listening from mythology and mytho-fiction, which includes titles and Originals from Devdutt Pattanaik, Kevin Missal, and Amish Tripathi.” Besides, romance show Little Things: When Dhruv met Kavya (a spinoff of Dice Media’s hit show Little Things) was the top-performing new release among podcasts for Audible India last year.

However, Audible has understood that “premium local” alone won’t cut it. In March, it announced a partnership with storytelling firm Pratilipi to adapt its bestselling titles into audiobooks and series for an 18-month licensing period. Among the titles are Hindi romance originals like Bepanah Ishq and Kothewali. What’s more, Audible offers Ranveer Allahabadia’s Hindi language podcast The Ranveer Show for free.

While Audible slowly scales up into romance and pulp fiction, remember that rival Spotify is cutting its investments in podcasting. Last week, the company cut 200 jobs, announced internally it was merging its acquisitions Gimlet and Parcast into Spotify Studios, and shifting focus to creator-led podcasts rather than slick in-house originals, according to The Wall Street Journal.

Meanwhile, back home, audio entertainment platforms are acquiring an audience using stories written, edited, narrated, and even uploaded by independent artists. Pocket FM is now hiring an in-house fiction writer. Production costs for these shows are usually low, often referred to as ‘professional user-generated content’ or PFGC.

Audible is also slowly pricing itself at par with homegrown competitors like Kuku FM (both at ₹199/month). Now, it needs Saif All Khan and some good old local ishq and action to make it worth a user’s while. Which one will be a more compelling reason to pay?

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GIPHY

Nightmare on Dalal Street: The Zee-Sony mega merger has hit a massive snag. Markets regulator Sebi has barred Zee’s promoters Subhash Chandra and Punit Goenka from holding any managerial or director positions in any listed companies (or their subsidiaries). The order (pdf) pertains to a relatively old case: the Goenkas are accused of siphoning off over ₹140 crore (~$17 million) via a loan from Yes Bank. Last month, Sebi had passed an interim order (pdf) against the Goenkas for allegedly siphoning funds from a gold refinery in the same manner—using a web of interconnected subsidiaries and associate companies. Zee has moved the Securities Appellate Tribunal against Sebi’s order. Without a stay, the merger will be in limbo; Punit Goenka is supposed to lead the Zee-Sony combine as CEO.

‘…the worst of times’: Indian advertising must brace for impact. According to a report by advertising major groupM, India’s ad industry will grow only 12% in 2023, as against an expected 16.8%. A global slowdown is hurting the ads business worldwide. India’s biggest ad medium is television, and it is expected to grow slower than before this year. There are bright spots, though. US media companies are expecting political ads to boost growth in the run-up to the elections next year.

Season of breakups: Regulators aren’t rushing to bless any unions. The US Federal Trade Commission (FTC) is filing an injunction to prevent Microsoft’s acquisition of gaming firm Activision Blizzard. The FTC had filed a case against the deal last year, saying it would give Microsoft unprecedented control over how non-Xbox users access games published by Activision. Last month, the European Union’s antitrust regulator approved the deal after Microsoft announced it will make top Activision games like Call of Duty available to rival gaming platforms. However, the UK’s Competition & Markets Authority has also blocked the deal.

Meanwhile, the EU’s antitrust regulator may also ask Google to break up its digital ads business and sell off parts of it, The Wall Street Journal reported. The US Justice Department had filed a similar antitrust suit against Google in January this year. Along with Meta, Google holds a near-duopoly on the digital ads industry worldwide.

The Writer Strikes Back: Hollywood’s ongoing writers’ guild strike is beginning to hurt big-budget global releases. Disney is reportedly delaying several Marvel movies and TV shows that were set to release starting next year. These include Avengers: Kang Dynasty and Avengers: Secret Wars. James Cameron’s Avatar 3 and Avatar 4 are also delayed by a year each.

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Bhavesh Kaware @properytransactionguru

You’ve followed finfluencers, gotten tips from skinfluencers, admired momfluencers… maybe you even have a favourite petfluencer.

Now, there’s a new gig in town: property brokers (brofluencers? propfluencers?)

This reel by Mumbai-based property broker Bhavesh Kaware has inspired memes, copycats, even a song by musician Yashraj Mukhate. Kaware is already doing brand collabs. No, not with real estate developers. This one is with India Today Group’s radio channel Ishq FM, and this one has Kaware promoting YouTube India (that too on Instagram).

But he isn’t the only one taking to Instagram to promote the properties in their portfolio.

Among the earliest adopters was Mumbai-based Rafique Merchant, who became famous for his comically frequent “Wow!” and “Amazing!” for mediocre ‘luxury’ properties in his videos. He does paid partnerships with developers to promote their projects. Several others are taking to Reels to get an audience—more memes than real information or serious business. Check out this young man targeting Indian home buyers in Dubai, and this Mumbai-based property brokerage firm.

I’m not sure how many property brokers are actually selling multicrore rupee luxury properties via Instagram. Most large real estate developers like Lodha, Godrej, and Prestige Group run ads on Facebook and Instagram, but these are largely static performance ads served in the feed or between stories. Indian real estate isn’t big on influencer marketing yet, but it just might embrace it now.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

A gadget that can read or listen to anything and live-translate it into your language? That’s one of those ubiquitous science fiction tropes. For instance, Doctor Who’s time travelling phone booth, Tardis, doubles as a real-time translator. Douglas Adams (true to form) has a literal fish for a translator in The Hitchhiker’s Guide To The Galaxy: he named it the Babel Fish. Star Trek’s Universal Translator comes closest to a realistic translation device, but even that is more fiction than science.

You may not be on the USS Enterprise, but there are growing use cases for some form of live translation, especially in entertainment. You might want to attend a concert with your K-pop stan daughter and finally understand the lyrics to her favourite act. Maybe you want to watch a standup comedy show in another language that your friends speak, but it would be nice to be able to laugh along with them. Or at least keep up with the context.

One such tech contender in India is a Gurgaon-based company called Cinedubs. Its pitch is a proprietary technology that lets you watch a film in a theatre in a language of your choice. Cinedubs is in a very early stage and focused on a mobile app. All you need is a pair of headphones, and you can sit with your friends in Chennai and watch their favourite Tamil film, but with Hindi dialogues right in your ears.

How does it work? More importantly, is there a large, scalable market for such a solution?

Now Showing: Dubbed films, right in your ear

blocks/Unsplash

Film dubbing has made a massive comeback over the last few years, thanks to the popularity of South Indian language films in north Indian markets. It is now standard practice for big budget releases to be dubbed in 5-6 Indian languages. Hindi cinema caught up later, but Marvel/DC superhero films have been doing it for a lot longer. This year’s FICCI-EY Media & Entertainment report (pdf) estimates that the average cost of dubbing a film has gone up from ₹5 lakh (~$6,000) a film to ₹20-30 lakh (~$24-36k) over the past decade. More than a third of the Hindi film box office revenue last year came from Hindi dubbed versions of South Indian language films.

Love Dhanush but don’t know Tamil except “dei” and “po”? Same here. But that’s no problem anymore, because all of Dhanush’s films release in theatres near me in Hindi, and on my favourite OTT app with English subtitles.

Cinedubs, launched in 2021, is trying to solve a subset of this problem. “Let’s say you’re in a city whose native language you don’t know,” co-founder Aditya Kashyap explains. “Or you’re one half of a couple that speaks different native languages. You want to catch the latest Friday release close to home, but you’re a Tamilian living in Chandigarh and the film is not playing in Tamil anywhere. Cinedubs can help with that.”

Cinedubs solves this with its mobile app and proprietary tech called 3D CFI. A user downloads the dubbed soundtrack of a film on the Cinedubs app; it’s saved on their phone. When they walk into the theatre and the movie begins playing, the app listens to the audio for about five seconds and recognises exactly what frame of the film is playing. It forwards to that exact point in the dubbed audio on the user’s phone. You plug in your headphones and watch the same film as everyone else. Only the audio in your ears will be different.

Cinedubs uses something called ‘3D CFI’ technology to accurately recognise which frame a film is playing at, just via audio. This is crucial because dubbing is only useful when it is perfectly synced with video. 3D CFI is Cinedubs’ invention, and the company has applied for a patent on the technology in India and the US. Cinedubs co-founder (and Kashyap’s brother Vineet Kashyap) developed 3D CFI.

“In every moment in a film, or even in real life, there are many different sounds playing in one go,” Kashyap explains. “There is dialogue, background music, the sounds of an explosion, or some object being moved. Each of these sounds have their own frequency. And when you combine them all together, the combination of these frequencies becomes a unique timestamp for every frame in a film. This is how Cinedubs is able to correctly identify what frame of the film is playing.”

But isn’t it odd listening to a film on headphones while watching it in a theatre? Doesn’t the dialogue playing on theatre systems interfere with that in the headphones?

“In theatres, audio systems have many speaker channels,” Kashyap explains. “Only some of them are dedicated to the dialogue. The rest relay other background sounds. So when you’re listening to the dubbed version via headphones, the original dialogue is unlikely to interfere, even on a cheap device.” Besides, he says, dubbed tracks don’t just have dialogues; they also (ideally) have all other background sounds from the movie to ensure that the viewing experience isn’t disrupted. Cinedubs gets its dubbed files from a film’s producers.

Cinedubs was launched in 2021, is bootstrapped, and has over 35,000 users for now. Most of them are in India, downloading Indian language dubbing for Indian films. The first was R Madhavan-starrer Rocketry: The Nambi Effect last year; Madhavan is also an investor in the company and its brand ambassador. Kashyap says the app has a small number of users in foreign markets, mostly among the South Asian diaspora in the US, UK, and Canada. Some also watched last year’s Telugu adventure film Vikrant Rona in Spanish dubbing.

Cinedubs is now betting on bigger films (and trailers of big titles) to familiarise people with the product. Next up: T-Series’ Adipurush, releasing next week in five Indian languages. This year, it had trailers of films like Pathaan, the highest-grossing Bollywood film in a long time (but the producers turned down a deal for the movie). The company is also in talks with international production houses, including Warner Bros. Discovery and Paramount.

But the process is slow because (a) the user base is still small, and (b) producers worry about piracy because the Cinedubs app downloads the film’s dubbed audio track on a user’s mobile, making it available offline. “We have safeguards in place to prevent users from downloading or otherwise recording the file and sharing it,” Kashyap says. “For example, the downloaded file will not play if headphones aren’t plugged in. So no one can record the audio from another device.”

What are the possibilities?

A Star Trek-like universal translator isn’t just useful for cinema. In fact, there may arguably be a small set of film-goers for whom this app makes sense. Most people watch films in their own language or travel to a theatre to see a version dubbed in their language. Cinema penetration in India isn’t high enough, and subtitling and dubbing films is now getting commonplace. Kashyap does have anecdotes, but they are niche examples: multilingual friends watching a Kannada movie together in four different languages, or a North Indian-South Indian husband-wife duo who finally go to the movies together armed with Cinedubs.

But Kashyap has a clear vision: “Producers won’t have to release dubbed versions in individual cinemas, distributors will not need to pay for expensive DCPs (digital cinema packages) for each language version of a new film, and viewers will not be forced to drive to a specific theatre to watch a film in the language of their choice,” he says. Bear in mind that Indian cinemas have a bigger problem. They need to bring in more viewers and get a regular supply of films that do good business (I covered this in a previous edition of The Impression).

More films are releasing in even more languages now, but Bollywood has been having trouble taking dubbed versions of Hindi films to the Tamil- and Telugu-speaking masses. This, when names like Pushpa and Rocky Bhai from KGF have become household names in towns and villages in Hindi-speaking states. An app could help bridge that divide among big city folks with a large Hindi-speaking migrant population in the South. Will it help solve the bigger problem?

There are more applications for translation and dubbing in the entertainment business. Gaming is an example; Indian studios are working on immersive, multiplayer, role-playing games set in Indian mythology. Technology that can let players tune into the gameplay’s audio in a language of their choice could potentially boost the reach of a title across the country (and internationally). Big Tech companies understand this. Earlier this year, Google announced a ‘Machine Translation’ service that will allow game developers to translate in-game text almost instantly, and for free.

We may not be close to a universal translator that works across the galaxy yet, but if India wants to export media/entertainment technology that people can use globally, it’s worth trying to invent some version of the Babel Fish.

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Tenor

No ‘likes’: Meta’s shareholders voted against a proposal to inquire into the company’s role in spreading hate speech in India. The proposal was submitted by a consortium of NGOs, including India’s Internet Freedom Foundation and Eko, among others. Eko had submitted a similar proposal opposing Google’s plans to open data centres in countries with rampant human rights violations such as Saudi Arabia. Other shareholders demanded Google reconsider plans in countries like India, where internet shutdowns are increasingly common. Google’s parent Alphabet has opposed the proposal.

Reality wars: Meanwhile, Meta is fighting Apple for dominance over the nascent AR/VR headset business. Meta’s Quest 3 seems heavily focused on gaming, in line with the company’s metaverse business efforts. Meanwhile, Apple’s Vision Pro (priced at a whopping $3,499) seems more like an immersive way to browse the internet and maybe watch movies.

Not backing down: There’s a fight brewing for IMAX screens in the US between two ardent purists of the medium—actor Tom Cruise and director Christopher Nolan. According to Puck, Cruise is upset that exhibitors are allotting all IMAX screens to Nolan’s upcoming Oppenheimer from July 21 onwards, slashing the exclusive window of the actor’s upcoming Mission Impossible 7 just ten days after release. He is now reportedly demanding exhibitors give his film more time in non-IMAX screens. Since the pandemic, big budget Hollywood films are releasing in quick succession, potentially eating into each other’s business.

Not happening: News veteran Malini Parthasarathy has resigned as chairperson of The Hindu Group. In a tweet, she said that space for editorial views was shrinking and hinted at a disagreement with the Board. According to The News Minute, she had proposed becoming editorial director of the group but was turned down. Parthasarathy has been criticised for appearing close to the Union government and the BJP; in 2021, The Hindu Group’s director N Ram distanced himself from Parthasarathy’s visit to Prime Minister Narendra Modi.

Onto the bandwagon: Journalist and TV anchor Faye D’Souza has launched a news aggregation app, Beatroot. The app promises ‘nutritious’ news that’s good for the reader. It’s currently open to a limited number of downloads. Beetroot seems to be a natural extension of the news aggregation D’Souza has been doing on her Instagram account. However, other apps like InShorts are already well entrenched in the news aggregation business.

No can’t do: Streaming platforms including Netflix and Amazon are planning a legal challenge to a new government rule asking them to insert anti-tobacco warnings on their content. India’s health ministry has asked for nearly minute-long disclaimers bookending all films and series that feature people smoking or using tobacco. Platforms say this will discourage foreign producers from releasing their work in India. Besides, everyone will have to go back and edit millions of hours of already available content.

Beefing up: Reddit is trimming costs and raking in the cash to get profitable in time for a public listing. It is laying off 5% of its workforce and has jacked up fees for access to its APIs. It’s widely being seen as a move to kill third-party apps. Reddit has its own app, but it’s a lot less popular than a bevy of third party apps. This move has upset Redditors so much that several large subreddits are staging a 48-hour blackout.

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Twitter tweet

Doctor vs. Ffinfluencer is not a common Twitter showdown. But Monday afternoon became a moshpit on Indian Twitter as original finbro Ankur Warikoo posted a long thread on his fitness journey, complete with suggestions for protein and other supplements.

The thread included affiliate links to these products, although Warikoo said he plans to donate this affiliate income towards the education of underprivileged children.

Warikoo’s tweets were soon picked up by healthcare professionals such as Dr Cyriac Abby Philips, popular on Twitter as ‘@theliverdr’. He particularly took objection to recommendations like curcumin (haldi) and ashwagandha supplements, pointing out that these can cause liver damage. That soon devolved into a lengthy back-and-forth between Warikoo and Philips.

Still, the memes mocking Warikoo’s seemingly-sudden pivot from crypto recommendations to protein shakes came in thick and fast (this one is in Hindi). That’s probably because just a couple of weeks ago, finfluencer PR Sundar settled a case (with a hefty fine) with markets regulator Sebi for offering unauthorised investment advice. Finfluencers have been running for cover ever since. I covered the fallout of this incident in last week’s edition of The Impression.

From Vauld to Whey, Warikoo’s come a long way. All this shows is that being an influencer now is getting harder and harder; there’s always pesky meme accounts and aggressive fact-checkers waiting to pounce.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

A Rolls-Royce costs between ₹6 crore-₹10 crore ($725,000-$1.2 million) in India, depending on the model. It sold just over 6,000 units worldwide last year. One of them might have been bought by PR Sundar, an options trader and ‘finfluencer’.

Twitter tweet

Sundar is known as much for his options trading courses as he is for his ostentatious lifestyle: a Mercedes, a penthouse, and a laundry list of luxury purchases planned for the future, including private jets.

Sundar isn’t a standalone case. Several well-known (and upcoming) finfluencers market their trading courses using the veneer of their success—cars, houses, and cash. All that is in jeopardy now, thanks to markets regulator Sebi. But will it force the biggest names to mend their ways?

Have finfluencers run their ‘course’?

Ian Talmacs/Unsplash

Indian FinTwit has been in turmoil since this Sebi order (pdf) hit a hallowed name—PR Sundar. The regulator has accused Sundar, his wife Mangayarkarasi, and their firm Mansun Consultancy Pvt Ltd of offering investment advice for money without being Sebi-registered investment advisors. Sundar was offering paying subscribers on his Telegram channel “Daily calls” on what market positions to take.

Sundar settled the case, but has been banned from the markets for a year. He posted a pensive but defiant note on his Twitter handle days after the order was passed.

Twitter tweet

Since then, finfluencers are ducking for cover. Several have been deleting old tweets, presumably those that could be seen as an investment advisory violation. Telegram channels have fallen silent, and some finfluencers are reportedly taking down their trading workshops and courses from platforms like Rigi.

In fact, Rigi soon issued a statement saying anyone selling a finance or trading course on the platform will need to have a Sebi registration number. That rules out almost every finfluencer using the platform over the last few years. Rigi allows a content creator to not just upload finance courses but also run paywalled Telegram channels. These are breeding grounds for stock tips, technical calls, and pump-and-dump schemes that finfluencers have been accused of profiting from. Just last month, Sebi fined one such Telegram channel called ‘bullrun2017’ (pdf).

But how much impact will the PR Sundar case have on India’s biggest finfluencers? One can, for example, sign up for courses and workshops by CA Rachana Ranade and Akshat Shrivastava on their respective websites; they don’t sell them through platforms like Rigi (they don’t need to). These range from ₹4,000 a course to more elaborate lecture series priced at ₹40,000+.

Shrivastava sells “discussion series” and courses starting at ₹10,000, which even come with material to understand India’s economy, supplied by his wife Ayushi Chand, a deputy director in the Ministry of Finance. (On his part, entrepreneur Ankur Warikoo only has courses on non-financial subjects, like how to set up a startup and use YouTube effectively as a creator).

Even Sundar’s courses and workshops are in full swing. According to his website, his next in-person workshop will be held in Bengaluru in late June. He charges ₹55,000 for a workshop. Sundar’s company Mansun Consultancy has been minting money, at least until the last financial year.

Harish Arjun/The Signal

Now, none of these courses claim to offer a daily stock tip or market position of the day, but many do come with one-on-one calls/Zoom sessions. Can Sebi monitor what goes on during such calls? Unlikely, unless they receive a complaint from a disgruntled customer.

In the meantime, Sebi’s order is unlikely to affect the business models of big-name finfluencers, especially if they are not relying on another platform like Telegram or Rigi to acquire customers. It may, however, discourage those just starting out or getting prominent ones from resorting to easy growth hacks, such as offering the ‘Hot Stock Tip of the Day’. For what it’s worth, there are only 1,326 Sebi-registered investment advisors in India (as of May 2023). No major finfluencer is on that list.

I’m not sure if Sundar ever did buy a Rolls-Royce. In one tweet, he had said he would rather buy the car in Dubai, where it’s a lot cheaper. But he, his wife, and Mansun are now paying over ₹6 crore (~$730,000) in penalties to settle with Sebi. That’s about the cost of an entry-level Rolls-Royce in India.

Will the real award ceremony please stand up?

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There is a glut of content on our mobile phones and TV screens. So much so that film producers now have to market their titles far more aggressively just to get the audience’s attention. This pressure is now driving them to rely on questionable metrics and dubious ‘awards’ for a marketing plank.

Take the 2023 Cannes Film Festival, for example. A few Indian films premiered at the world’s most prestigious film festival, including Kanu Behl’s Agra (produced by Saregama’s Yoodlee Films) and Anurag Kashyap’s Kennedy (produced by Zee Studios). As with almost all films at Cannes, these two are also marketing themselves on how long of a standing ovation they got.

Competing on the number of minutes a film got a standing ovation for is a funny trend, and its origins are unclear. But the record for the longest ovation is 22 minutes, for Guillermo del Toro’s Pan’s Labyrinth (2006). Bear in mind that both Agra and Kennedy are being screened in non-competitive sections of the Cannes festival, so this appreciation for both films isn’t coming from some festival jury. Anyone invited to the festival (or with press accreditation) can attend a non-competitive film screening, and tickets reportedly cost upwards of $6,000 each.

But you’ll be forgiven for thinking that any film going to Cannes has won some prestigious recognition. The lines between the Competition section and others, such as Director’s Fortnight and Un Certain Regard, are blurry for ordinary viewers. It’s true that most films are still screened before being admitted, even in non-competitive sections. But from what I understand from conversations with film writers and directors, the selection process also hinges on a filmmaker's existing relationships with the people associated with the festival. If your film has premiered at Cannes in the past, you’re more likely to get another invite.

Back home, something similar is happening with the Dadasaheb Phalke awards. The original award is given by the Ministry of Information and Broadcasting to one individual every year, someone with a lifetime of achievements in cinema. Previous recipients include Rajinikanth, Manna Dey, Amitabh Bachchan, and Satyajit Ray; the first ever recipient was actress Devika Rani of Bombay Talkies (the studio, not the anthology film) fame.

Two other award functions have been using Phalke’s name to recognise films, but they have nothing to do with the official award. One, called the Dadasaheb Phalke Film Foundation, handed out awards to a long list of films, TV shows, and actors just last week. Winners included Anupama (Best Serial), Rocket Boys (Best OTT Series), Anupam Kher (Best Actor), and Mahima Chaudhary (Most Inspiring Actor), among others. The other, called the Dadasaheb Phalke International Film Festival, seems to have official backing, with a letter of appreciation from Home Minister Amit Shah adorning its website. But the festival is run by a private entity: it’s founded by Anil Mishra, who is also an advisor to the Central Board of Film Certification. Phalke’s grandson Chandrasekhar Pusalkar is the festival jury’s president, and Mishra’s son Abhishek Mishra is the festival CEO. It was at this event where Vivek Agnihotri’s film The Kashmir Files won an award for Best Film, sparking a series of fact-checks.

Nevertheless, awards and film festival premieres are a crucial marketing tool. And as more and more content bays for our attention, these little achievements (‘real’ or not) may become the difference between a hit and a flop.

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Annie Spratt/Unsplash

Who’s responsible? Today is Meta’s annual general meeting. Out of 13 proposals by shareholders, one named Proposal Seven is related to India. It alleges that Meta has become a tool of propaganda, hate speech, and political bias in India, the company’s largest market (by number of users). Shareholders and civil liberties organisations who have floated the document are proposing that Meta commission an independent inquiry into its business decisions and whether the company encouraged hate speech in India. In October last year, Meta’s Oversight Board also said hate speech against minorities is one of the strategic objectives deciding what cases against Meta it will review.

Beating records: JioCinema and Star India are both going to town with record viewership numbers. Star got 482 million viewers for the tournament’s first 66 matches, an all-time high, the network said, citing data from the Broadcast Audience Research Council (BARC) India. It hasn’t released data for the final few matches yet. Meanwhile, JioCinema broke global sports live-streaming records with 32 million concurrent viewers at one point during the IPL final. Will Star and Reliance also make profits off IPL? This story in Business Standard lays out the math, demonstrating how hard it will be to earn handsome returns on these pricey IPL rights.

Ready Player One: Video games are taking over the movie business. Hollywood producers have gone from adapting old Western literature and folk tales to bringing video games like The Last of Us, Super Mario Bros, and Sonic The Hedgehog to life in big-budget films. These bets are clearly paying off. To date, The Super Mario Bros Movie has grossed over $1 billion worldwide.

I’m offended: Indian authorities have been trying to moral police the content on OTT platforms for a long time. While domestic creators are just getting comfortable with self-censorship, state morality is hurting international content, Livemint reports. Platforms like Netflix and Disney+Hotstar (when it had HBO Originals) have begun receiving complaints from viewers about abusive language or other obscenities in American titles they offer. Executives say they’re stuck. They don’t want to offend the government, but they also don’t want to piss off paying subscribers by censoring premium content.

Meanwhile, the UK is demanding that platforms make sure all their content complies with media regulator Ofcom’s ‘impartiality’ norms. But Netflix and Disney+ say this requirement is ‘nebulous’; Netflix is even threatening to purge its UK catalogue in protest.

Spiralling: Financial services firm Fidelity has marked down the value of its stake in Twitter Inc. once again. It says the social media platform is now worth just a third of the $44 billion that Elon Musk paid to buy it last year. Twitter is struggling with serious issues; just last week, its tech weaknesses were on public display during Ron DeSantis’ disastrous presidential campaign launch.

Trumpet 🎺

This week, HBO delivered a devastating finale to Succession (no spoilers here!). Followers of the Roy family saga are already calling it among the greatest shows HBO has ever made. But apart from a cinematic legacy, the show has had an outsized influence on conversations around luxury fashion, giving birth to the now-abused term ‘quiet luxury’. Several Instagram accounts dedicated to breaking down the costume design of Succession have defined it as the discreet use of luxury brands, such as $250 plain T-shirts and $600 baseball caps with no obvious logos or brand markers.

Succession is now such a phenomenon it seems to have caught fashion marketeers’ fancy in India too. So much so that Reliance’s AJIO Luxe e-commerce website has an entire (mobile only) landing page dedicated to the fashion of Succession and its theme of ‘quiet luxury’. The show’s stills redirect to brands Reliance franchises in India, including Tom Ford, Bottega Veneta, Emporio Armani, and even Kate Spade and Scotch & Soda, probably the sort of brands the Roys wouldn’t want to be anywhere near.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

How many films can you watch in a weekend? A month? A year?

There was a time when even the most avid film buff wouldn’t watch more than one movie—almost always the Friday blockbuster—a week. Maybe a rerun of an old favourite on TV on a Sunday afternoon. Or watch Sooryavansham airing (yet again) on Set Max.

Now, there are endless films to choose from. Old, new, massy, niche, feature-length, shorts, documentaries, award winners, and every other conceivable category and type of film you can think of. During the pandemic, OTT platforms became endless spouts of content, and we got accustomed to watching big-ticket releases at home, on our TVs and mobile phones.

This glut is hurting the economics of filmmaking, especially in the Hindi film industry. And it’s having a cascading effect on everyone involved in the business of films.

Lights… Camera… Sell!

Iconic still from sci-fi hit ‘Le Voyage dans la Lune’ (1902); YouTube/Bill Brass Quintet

The pandemic years opened an unexpected opportunity for film producers. People were stuck at home, and the privileged among us spent a lot of that time glued to online entertainment. Viewership for OTT platforms swelled.

Content boomed. Flush with cash, platforms began acquiring all the films and shows they could lay their hands on. Lockdown restrictions made it hard to commission and shoot new content, so they turned to what was already ready for sale—films. In 2020-21, movies starring some of the biggest stars were released direct-to-OTT, including Akshay Kumar’s Laxmii, Sushant Singh Rajput’s last film Dil Bechara (Hotstar), Suriya’s Soorarai Pottru, and Amitabh Bachchan-Ayushman Khurana starrer Gulabo Sitabo (Amazon Prime), among many others. Platforms bid against one another for these films, and many paid as much as ₹80-100 crore ($9-12 million), sometimes even more, for individual titles.

That gold rush is now gone. Theatres have reopened, but as I wrote in last week’s edition of The Impression, they are struggling to attract audiences and make money. Meanwhile, OTT platforms are realising India is not a lucrative market for subscriptions, and they cannot afford to spend big money on individual films. Besides, they no longer need to invest to lure Indian audiences to the small screen. We’re already hooked.

So, filmmakers have gone from being spoiled for choice to contending with a buyer’s market.

“Who’s buying a direct-to-OTT film these days?” the head of a large Hindi film production studio asked me. She spoke to The Impression off the record. “I don’t know anybody who has a massive original film lineup. Original shows, yes. But not films. All platforms now want the big theatrical release.”

Streaming platforms are now asking producers to release their films in theatres first, even if it is limited to a few screens in big city markets, according to producers I spoke to.

There are a few reasons for this. One, as I mentioned above, platforms are no longer in a race to just fill up their content libraries. They’ve got Indian audiences hooked to streaming. Now, they want content that will keep them hooked.

Two, there is so much content that it is all getting lost in the crowd. Getting your content discovered by your intended audience is one of the biggest challenges in streaming right now. It has led to an increase in marketing budgets as platforms try to get the word out about their upcoming movies and shows. Not just online, but also in expensive, traditional ad spaces like roadside billboards. But a movie released in theatres already has a modicum of the audience’s attention. It gets an initial viewership and maybe even some word of mouth. It will usually feature a well-known star. All this saves the platform the headache of marketing an original film from scratch.

Three, OTT platforms want to moderate the prices they are paying for films and find a metric to anchor the price of digital rights. Box-office collection is one of the best ways to do it. Occupancy rates and ticket sales help a platform determine what premium (if any) it should pay to acquire a film.

Producers and studio heads who spoke to The Impression said platforms are either foregoing original films or drastically cutting their slates. For instance, Netflix India has slots for only 5-6 original films this year. It released 16 original films in 2020 and 15 the following year. Disney+Hotstar isn’t commissioning any original films for now (it also gets movies from sister concern Fox Star Studios). Rival SonyLIV is not in the business of original films; and post Sony’s merger with Zee, priorities for original films might shift at Zee5 too.

Cost control

Film producers are then left with two choices: to bid aggressively for one of the limited slots on an OTT platform’s slate, or produce a film that will make money in theatres first.

That is easier said than done.

“Earlier, even with the performance of a film on its opening Friday, you could estimate how much business it will do [in theatres],” says Priti Shahani, founder of production house Tusk Tale Films. She previously ran Junglee Films, the film production house of The Times Group. “Now, those opening-week predictions are gone.”

Without the ability to predict if a film will do well, producers are feeling their way through in the dark as they decide what to make a film on, and with whom. Tried-and-tested Hindi cinema formulae are flopping, including previously-bankable star names and film genres. Yet, producers are driven more than ever towards old, familiar themes and faces in an attempt to secure theatrical success. That’s because there are no takers for risk—the stakes in theatres are too high, and OTT platforms also want to back only winners.

One way to ensure a film runs successfully in theatres is to budget it smartly and recover the investment via early box-office collections. But budgets are swelling, because titles continue to flop and demand contracts both online and offline.

Here’s where star fees pose a problem.

“With everyone looking for a big name for their film, there are now just those five names, and 500 people are chasing them,” Shahani says. “Naturally, supply-demand dictates that these names will hike their prices, and that’s understandable. The question, then, is what kind of story can you mount on that budget.”

You could invest in a newcomer and try to make them a star, but that is a long, difficult process, a film producer told me, requesting anonymity. “Frankly, the audience and the media is more interested in the lives and glamour of star kids than in outsiders and newcomers. How do I, as a producer, work against that?”

Top actors in the Hindi film industry are jacking up fees, making films more expensive to make. And that lowers producers’ ability to experiment with stories or genres. For example, Shahani says the genre most likely to work right now is a ‘family entertainer’.

Finally, all of this is underscored by rising ticket prices. PVR-INOX, the country’s largest multiplex chain, said its average ticket price was 16% higher this past financial year than in 2020, according to its investor presentation (pdf). To compensate for lower footfalls, cinemas have no option but to increase prices. But higher prices are driving away audiences that are cutting discretionary spending to combat inflation.

“India is a price-sensitive, volume-driven market. How will mass audiences come to cinemas when ticket prices keep rising? But then, as producers, we can’t do anything about it. We can’t tell the exhibitors how to price the tickets of our movies,” the film producer quoted above says.

Producers say families will buy expensive tickets for a movie that’s worth it—one that has their favourite stars and a story that entertains everyone equally. So, films will have to get bigger, more expensive, and narrate catch-all storylines.

In all this, the small, niche movie has effectively lost distribution. OTT platforms are unlikely to take such films now, and such titles may also not make money in theatres. Even in the boom years, smaller films were lost in OTT platforms’ tsunami of content. In the past few months, Hindi films with new actors and unconventional narrative styles, such as Almost Pyaar With DJ Mohabbat, Zwigato, and Bheed have flopped. But some like The Kerala Story—criticised for vilifying Muslims with its inaccurate storyline—have done roaring business.

Déjà vu

This kind of disruption has happened before. Back in 2007-08, TV channels dedicated to showing films competed to acquire satellite rights to big hits. In the mid- to-late-2000s, TV broadcasters went big on films. Erstwhile UTV had announced a TV channel dedicated to action films; US production giant MGM launched an English movie channel here in 2008; even kids channels Cartoon Network and Pogo began airing more Bollywood films to keep children glued to the screen.

“In those days, satellite rights would be 40-45% of a film’s total revenue,” Shahani explains. “These channels were racing to get films, so they were outbidding one another and driving up prices. Audiences were also getting comfortable with watching a movie at home on TV. So, the film’s trailer became crucial. Audiences can gauge very quickly from a trailer if they will like a film. If the trailer doesn’t work, they won’t go to theatres. They’ll be thinking, “Okay, this will be on TV or online soon. I’ll watch it then.” That’s exactly what’s happening now, but on OTT platforms.

Eventually, new film stars were launched, new blockbusters hit the cinemas, and the business of films was back on track.

Will Hindi films recover once again? Some say it’s just the lockdown hangover and a matter of time.

“People had not met each other for two years in the lockdown. So, when it was lifted, tourism, hotels, travel, everything went ‘boom’,” Dimple Kharbanda, founder of production house Kangra Talkies, told The Impression. “People were looking for activities that let them spend time with families, friends, that kind of emotional outpouring. Since the pandemic, people are very distracted. They want to think twice before going to cinemas. But the thing is, the cinematic experience is the number one outdoor experience even today. This is temporary; it will all settle down in some time.”

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Credit: Imgflip

Same-same but different: Two rival Indian ad agencies have entered very similar ad campaigns for the Cannes Lions Award this year. Both use the ‘social experiment’ advertising device to market the exact same product: a mosquito repellent. Dentsu’s Suraksha ka Kaala Teeka campaign for Reckitt Benckiser’s Mortein reimagines the traditional ‘kaala teeka’ to ward off the evil eye as a mosquito repellent that wards off malaria from young children.

VMLY&R’s Aarogya Bindu campaign for local rival Maruti Plastorub’s Maxx Flash uses an identical concept. Both insist they devised their campaigns after studying the nuances of the mosquito repellent category.

We sell ads: Messaging app Snapchat is scaling up its India ad sales team and hiring senior leadership here in an attempt to monetise its teen and young adult user base, Snap Inc.’s APAC head Ajit Mohan said. Mohan’s pitch is that Snapchat’s users aren’t present on any other platform, and the social media platform can charge advertisers a premium for that exclusivity. In a previous edition of The Impression, I wrote about what Snapchat needs to do to succeed in India.

Clean-up act: Lots has happened with streaming companies this week. HBO Max officially renamed itself ‘Max’, a questionable decision to drop the more hallowed ‘HBO’ just as it airs the Succession series finale. Warner Bros Discovery has also inexplicably purged the platform of some well-loved shows, including Westworld and a bunch of Adult Swim series. Meanwhile, Netflix has finally introduced its anti-password sharing features to US subscribers. Almost all streaming companies have promised shareholders they will turn profitable by next year, but a Variety analysis shows many are unlikely to keep that promise because they still don’t have expenses under control. Back home, the Sony-Zee merger may be up against yet another legal hurdle.

The sound of music…: …is now (legally) AI-generated. Universal Music Group, the world’s largest music label, has signed a deal with a sound ‘wellness’ company, Endel, to use AI for the artists it manages. UMG and Endel want to publish AI-generated ‘soundscapes’ for relaxing or studying using the voices of their artists, such as The Weeknd and Ariana Grande.

Indian music labels are also getting creative about monetising their IP. Older music labels such as Saregama and Shemaroo are banking on nostalgia to keep spinning money from their libraries of yesteryear hits, offering them for recreations, stage shows, or simply raking in ad $$$ from repeat YouTube views of vintage movies and music videos.

OK Google, write me an ad: If you’re a brand manager, you could soon do without a large creative team. At least that’s the Google-Meta-Amazon pitch. Big Tech firms are going to offer AI tools to advertisers that automatically generate ad creatives using content they are provided. There are already countless AI-based tools to generate ad copies, headlines, and captions; most are free. This week, Adobe also introduced a Photoshop feature called ‘Generative Fill’ that lets users change images using text prompts. In March, rival photo editing software Canva also introduced major AI tools to make editing and creating images easier.

This is goodbye: Longtime NDTV news anchor Sarah Jacob unexpectedly quit the channel this week, posting a farewell note on Twitter. This was a day after she anchored a segment titled ‘How PM Shows Respect Towards Women’, showing Prime Minister Modi bowing in front of a woman who greeted him on his Australia visit. It also carried other stories of how Modi has shown reverence for women, such as his mother, in the past. Many criticised the segment as obsequious. Jacob’s resignation follows a long line of top-level exits from NDTV, including its star Hindi anchor Ravish Kumar after the Adani Group took over the channel.

Trumpet 🎺

Instagram/Nandita Das

Quick, what comes to your mind when I say ‘Cannes’? Beaches along the French Riviera? ‘Artsy’ films for snobby geniuses? Your favourite Aishwarya Rai red carpet look?

A lot of buzz around this year’s Cannes Film Festival, much like for previous editions, is around the designer looks of the biggest stars from India and abroad. But actor and filmmaker Nandita Das seems dismayed. In an Instagram post, she reminisced about the years Cannes was a “festival of films and not of clothes”.

Das’ post highlights how much Cannes has changed in just the last five years. It has always evoked images of niche, even esoteric cinema discussed among the world’s most influential filmmakers, but the focus is shifting to new forms of entertainment. First, in 2017, Netflix entered two of its original films in competition at Cannes for the first time. Then last year, TikTok became an official festival partner and launched a short film festival. This year, there is more grumbling about a variety of influencers showing up at Cannes, including Masoom Minawala (for Tata group’s Titan), Kusha Kapila (for Dr Sheth’s and Airbnb) and Ranveer Allahabadia aka BeerBiceps (for Brut India).

But why are people so cut up about this? Fashion and beauty brands have been bringing their ambassadors to the festival for years. Luxury fashion brands are increasingly relying on the Cannes red carpet to launch new collections.

Cannes may be a film festival, but it’s also in the business of attention. Back then, the big bucks were in cerebral celebrations of cinema. Now, they’re in branded red carpet looks and Insta celebrities.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

If someone shared this newsletter with you or if you’ve found the online version, hit the button below to subscribe now—it’s free! You can unsubscribe anytime.

One of my few happy moments during the lockdown was getting a chance to watch Tenet on the big IMAX screen. It was a surreal experience, straight out of a dystopian film: everybody nervously taking seats one apart from another, all masked up, with no popcorn or drinks. A family near me was covered head to toe in PPE suits. But when the lights went out and the opening credits began to roll, I forgot about the horrific reality we had been living for the past year. I would go on to watch the film two more times in theatres, partly because I missed the experience (and partly because it took three tries to figure out what the hell was going on in Tenet).

Theatre owners would be thrilled to hear such stories. Ever since pandemic restrictions were lifted, they have been trying hard to get customers back to cinema halls, reminding them of the smell of warm popcorn and the thrill of the big screen.

It’s not exactly working.

PVR-INOX’s do-or-die year

Karen Zhao/Unsplash

PVR and INOX are India’s largest multiplex chains, and together, they are the largest by a significant margin. This week, the merged PVR INOX Ltd reported its first quarterly earnings. The merged entity reported revenues of ₹3,829.7 crore (~$465 million) for the financial year ended March 2023 (FY23) and an Ebitda margin of nearly 30%. Ebitda stands for earnings before interest, tax, depreciation, and amortisation.

On the face of it, PVR and INOX together are in a better position to lead the recovery of the cinemas business than they were apart. Now, they can stop competing for locations for their new multiplexes, footfalls, and additional crucial lines of revenue, such as in-movie advertising.

“Like we’ve guided, the bulk of the synergies will come from revenue,” PVR’s management said in an investor call yesterday. “Advertising [revenue] is one number lagging behind, but this will not change dramatically.”

That’s great, and it underlines why this merger made good business sense for both parties. But other operational metrics of the PVR-INOX combine seem to be in dire straits.

The merged business reported a loss (after tax) of ₹336.4 crore (~$41 million) for the financial year. Compared to the pre-pandemic financial year, admits and the occupancy rate for the merged entity were down by 16% and 21%, respectively. But the average ticket price grew, which means PVR INOX is making more money by selling more expensive tickets to a shrinking audience. PVR and INOX together sold over 27.5 billion tickets in FY23, but that was 3% lower than what they sold in FY20, just before the pandemic.

Malls and real-estate developers have also rescinded all concessions they had made on rent for their tenants, so PVR INOX’s rental costs are up 40% year-on-year, along with a steep increase in employee compensation and utilities.

To clean up the combined operations, PVR INOX is shutting down 50 screens. The management says these are mostly theatres that have “lived the end of their life cycles” and are located in malls, shopping centres, and other locations that are losing relevance in their neighbourhoods. To compensate for this, PVR INOX is adding 150-175 screens in the year ending March 2024.

Herein lies the shift in the business.

Thirty-eight percent of these planned screen openings will be in southern India, as per PVR INOX’s investor presentation. And of the 168 screens it has opened so far in FY23, 74 (or 44%) are also in south India (followed by north India). Why is this? It’s got to do with the ongoing turmoil in the Hindi film industry.

In the last 12 months or so, Hindi films are barely making money in theatres, barring one or two big hits. That has led to what PVR INOX management calls “volatility” in Hindi box office collections. From ₹531.4 crore (~$64.5 million) in the June 2022 quarter, PVR INOX’s Hindi film collections fell to ₹335.5 crore (~$41 million) in the next quarter, then back up nearly 30% in the next quarter, and then back down by about 10% in the quarter ended March 2023. It’s becoming hard for cinemas to rely on the earnings from Hindi films, because only a few are actually making money.

So, other Indian language films are doing the heavy lifting. A stream of hit films in Tamil, Telugu, Kannada, Malayalam, Punjabi, and Marathi are helping cinemas keep revenues steady.

This is a problem for PVR INOX. Regional films mostly earn from other theatres, including single screens.

A look at PVR INOX’s numbers shows the split. The multiplex chain comprised at least 40% of the total gross box office collections of recent, highly anticipated Hindi releases like Tu Jhoothi Main Makkaar, Shehzada, and Selfiee. It is an even bigger contributor to English film collections such as Avatar: The Way of Water and Ant-Man and the Wasp: Quantumania (about 50-60%). But for the year’s biggest Tamil and Telugu releases like Varisu and Waltair Veerayya, PVR INOX accounted for barely 10-15% of total revenue from ticket sales.

Clearly, PVR INOX is missing out on the audience that filmmakers are profiting from. That explains why it’s opening so many more screens in south India, while equally focusing on the north. It wants a bigger piece of the southern-language box office collections pie.

But that doesn’t mean the Hindi film industry will cease to be the multiplex’s mainstay. “...last year has been very volatile but we don’t see this continuing,” Ajay Bijli, MD of PVR INOX said in the investor call cited above. “This is something we are very confident [about, that] the supply and quality of movies connecting with the audience is already happening, and on the demand side consumers will continue to go out and entertain themselves. The number one form of entertainment out of home is still cinemas. This is just an aberration we have had, a post-Covid symptom of the last 12-14 months. But it will improve, there is no question about it.”

PVR INOX has identified a content pipeline it’s excited about, but it leans heavily on big-budget English films and Indian non-Hindi films. In particular, theatres are hoping the cash registers will ring through June and July with the release of Fast X, the tenth instalment of the Fast & Furious franchise, along with Barbie, Oppenheimer, the latest Indiana Jones, and a couple of Marvel/DC superhero films. Somewhere in there are also Hindi titles like Adipurush (which was viciously mocked for its terrible trailer last year), Animal, and Maidaan.

Hindi films need to bring in more footfalls and higher occupancy, or PVR INOX will be in financial trouble.

“We have a robust pipeline of screens handover this year. But we want the volatility in the film industry to settle, so we have delayed all new handovers that are coming up,” the company’s management said in the investor call. This is the year to invest some, then wait and watch if the recovery they’re hoping for comes through.

That is in line with the company’s stated focus for the year—profitable growth. Usually, mega mergers of top players in an almost-oligopolistic industry should come with endless cash and big spending to corner more of the market. But that’s not what PVR INOX is doing. Instead, its management says it is going through “every expense line item with a fine-toothed comb” to find any savings it can.

And the company wants to quickly move off debt and finance its anticipated ₹700 crore (~$85 million) annual capital expenditure through internal accruals. While the PVR management didn’t offer a clear timeline of when it will become profitable, it said it hoped to close FY24 with lower net debt. The company wants to hit ₹5,000-6,000 crore ($600-730 million) in total revenue by the end of FY24, or nearly 1.5x of what it made in the year gone by.

That’s a tall order. Every major operating metric will need to reverse course: footfalls, number of tickets sold, occupancy rates, and box-office collections across languages. Already, PVR INOX tickets have gotten more expensive over the past year, even as Indians cut discretionary spending to deal with rising inflation.

Most of all, it will need everyone in the Hindi film industry to put their best foot forward and make films so good that they make you want to ditch your mobile phone and TV and go watch them in a cinema hall, with the smell of warm popcorn and the bright lights of the big screen.

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Peter Lawrence/Unsplash

News is breaking: It’s been an action-packed week for news organisations. Vice Media filed for bankruptcy, and the company’s chief reconstruction officer said the downfall happened because it raised too much money, at too high a valuation, and then spent it all on non-starter growth plans. Meanwhile, Austin Russell, the founder of auto tech company Luminar Technologies, has acquired the publisher of Forbes magazine. Rumours have it that the transaction may be funded by Russian money. New York Times Co. and News Corp reported a drop in their ad revenues for the quarter gone by.

Meger leaders: Sony-Zee has announced leadership changes as it races to complete its merger. Longtime Sony India executive Danish Khan will now lead the digital business, which includes SonyLIV and Studio NEXT. Meanwhile, another Sony India veteran, Neeraj Vyas, will take over the company’s Hindi language TV business. Livemint had first reported the reshuffle.

It’s through: Europe’s antitrust commission has cleared the Microsoft-Activision deal, even as the tech behemoth appeals a rejection from the UK’s Competition and Markets Authority (CMA). Microsoft has suggested that CMA’s stance is hurting large businesses’ confidence in the UK. The US regulator is also yet to approve the deal. Earlier this year, Microsoft had promised to licence Activision’s biggest games, such as Call Of Duty, to rival gaming platforms.

We want change: Dish TV’s minority shareholders are demanding an extraordinary general meeting to pick a new board of directors and appoint new management that can whip the company back into shape. They have also flagged poor decisions by the current leadership, including an investment in OTT platform Watcho. Shares of Dish TV are down by over 17% year to date, and it has been making losses since 2019.

Search for leads: Conversion rates of paid search ads have decreased across industries in the US, while the cost per lead has risen steadily, as per a Search Engine Land analysis. Conversion rates fell most for advertisers in the apparel, fashion, and jewellery industries, but cost per click remained the same.

The OTT police…: …is at it again. Members of a parliamentary panel told executives of top streaming platforms to stop airing “obscene” content and abusive language. Last month, the Delhi High Court granted the Ministry of Electronics and IT time to draft rules for OTT content. It all started with an FIR against TVF series College Romance; the Delhi High Court allowed the complaint to be registered and said the series was “obscene, profane, and vulgar”.

Trumpet 🎺

Instagram: Gujarat Titans

In a first for the Indian Premier League (IPL), Gujarat Titans wore a lavender-coloured kit to support the fight against cancer. Some fans gushed over the colour, while others were unhappy with the change, arguing that blue suited the boys better. Nevertheless, it’s a nice gesture for a noble cause.

But many are mocking it. They’re pointing out that the IPL, and legendary cricketers, are raking in big ad money from companies that sell gutka and pan masala—among the leading causes of cancer in India. This season, fans were taken aback to see Virender Sehwag and Sunil Gavaskar in an ad for gutka brand Kamla Pasand, promoting a surrogate mouth freshener product. Pan masala ads have dominated ad volumes during the IPL this year; their share is double last year's. KP Pan Foods is one of the top advertisers this year, as it was last year too. So much for cancer awareness.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!

Good afternoon!

Welcome to The Impression, your weekly primer on the business of media, entertainment, and content.

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Last week the Federation of Indian Chambers of Commerce & Industry (FICCI) held its annual three-day media and entertainment conference called FICCI Frames in Mumbai. This is one of the largest industry body meetings and like all conferences, it has its fair share of agenda setting by sponsors and crystal ball gazing with a mostly optimistic bent. This year’s sponsors and lead speakers included Amazon Prime Video’s new country head Sushant Sreeram and Netflix India’s VP for content, Monika Shergill.

This year, all conversations were held in the backdrop of one comparison—how the M&E industry is pre- and post-pandemic. And there is both good and bad news.

Go big or go home

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First, the good news. Indians want to be entertained, and they’re lapping up more content than ever before—movies, music, and online video (but not TV, more on that in a bit). According to this year’s FICCI-EY Media & Entertainment report (pdf) Indians spent more time than anyone else on the planet watching online sports and entertainment and listened to more music (in hours) than the global average in 2022.

But, there is bad news. Indians don’t want to pay for content. The industry has known this for a while, but has been trying to ignore it as it goes about building premium subscription businesses, from OTT platforms with prestige shows to ad-free music streaming. But post-pandemic, the reality is clear. Subscription revenues (or direct consumer payments) in all major genres are growing slowly; and in most cases, they are below pre-pandemic (2019) levels, according to the FICCI report.

Harish Arjun/The Signal

Digital subscriptions (mostly comprising OTT subscriptions) have grown, but a lot of that is attributed to bundling - the process of offering OTT subscriptions for free as part of a bundled offering with a telecom company, a cable TV provider, or some other aggregator. I wrote about this in detail in the very first edition of The Impression. People I spoke to in the streaming business had told me they expected bundling to become the dominant way of selling subscriptions. Direct-to-consumer in the streaming business may be dying, at least in India.

The bigger concern for media companies is the shift in television, India’s biggest mass medium. Indians watched less TV in 2022 and overall impressions on all TV channels fell for a second year in row, from 1.73 trillion in 2020, to 1.59 in 2021 and 1.47 in 2022. Middle class viewers are not switching on TVs as much as they used to. The biggest drop was among NCCS CDE households, a consumer classification of homes with four consumer durables or less. And among age groups, 22-40 year olds turned away from TV the most. So, the bulk of the Indian consumer pyramid is slowly losing interest in television as social media, OTT platforms, gaming, and other forms of entertainment compete for attention.

FICCI and EY predict that the number of households with paid TV channel subscriptions will continue to decline, and that newer TV consumers will come for free-to-air channels such as DD FreeDish. Meanwhile, higher income households will ditch cable for ‘bidirectional TV’—set top boxes that double up as a streaming aggregator and a broadband provider. Linear television is getting replaced on both ends - and most of it is by households who want to watch for free.

This makes the debate over the future of the SVOD (subscription video on demand) vs AVOD (advertising video on demand) models in streaming very clear. “AVOD has already won the race, that discussion is over,” former Balaji Telefilms’ group CEO Nachiket Pantvaidya said during one session of the conference. “The biggest content investment today is being given away for free - the IPL. It means someone is doing some math somewhere.”

Harish Arjun/The Signal

Let’s look at music. YouTube is almost every Indian’s go-to platform to look for a song or build a playlist. The proportion of people who pay for music streaming subscriptions is abysmally low in India although it has grown from around three million in 2021 to four-five million last year. But, 200 million people use music streaming in India. FICCI & EY estimate this paying user base will, at best, double to eight million by 2025, with ₹3.5 billion ($42.65 million) in subscription revenue. This paying subscriber base is not going to be more than 3-5% of all music consumers, and that’s after including both streaming subscribers and people paying for concerts and merchandise. Until YouTube is around, and telecom companies offer music streaming for free (JioSaavn, Airtel Wynk), there’s not much hope for the likes of Spotify or Gaana to build a subscription-only business at scale. Since late last year, Spotify has been scaling up its ad sales team in India.

Film theatres are also struggling to get business back to pre-pandemic levels. Occupancy rates at the country’s biggest (PVR) and second-biggest (INOX) multiplex chains are still below pre-pandemic levels. PVR’s is at 29% for the 9 months ended December 2022 (pdf), while Inox is at 23% for the same time period (pdf). Hindi films, in particular, earned less at the box office in 2022 than they did in 2019, pre-pandemic. And because of lower ticket sales, people are also watching these films less when they premiere on TV. Impressions for TV movie channels were down across the board in 2022 (compared to 2020) and FICCI & EY report that the satellite rights of films are cheaper now.

Contenders, assemble

If consumers won’t pay, ads are the only way to keep business running. But the fragmentation of audiences in the sheer number of entertainment options is hurting media and entertainment businesses’ ability to earn from ads. A single music streaming service, OTT platform, or TV broadcaster cannot build audiences to a scale where ad revenues are strong enough to turn profits.

Streaming platforms are already toying with far-out ideas to make money. At the FICCI Frames conference, a panel discussion on how to monetise OTT content quickly turned into ideas on how to effectively get into e-commerce and sell customers everything from soap to games to gadgets in a bid to increase their lifetime value to the platform. The only voice to hold out against that line of thinking was Praveen Chaudhary, head of retention and growth for Warner Bros Discovery’s APAC arm. “I’m not so sure about e-commerce and content coming together. I don’t think I shop to get to know content and I don’t watch content to get to know brands,” he said.

Can this work? I don’t know. But there may be an easier way than hawking soaps in the middle of an eight-episode series – consolidate. India’s M&E industry is seeing more consolidation, more partnerships, and more dealmaking than before. Since 2019, both the number of reported M&A deals in this industry and their cumulative deal value have risen steadily, as per data from the FICCI report.

Harish Arjun/The Signal

Some of these are mega-deals that are changing the shape of the industry. The Sony-Zee merger is among the biggest—the merged business led by Zee CEO Punit Goenka is expected to be worth $10 billion, with $1.5 billion in cash balances alone. Together, Sony and Zee will have so much influence over India’s TV business that the Competition Commission of India had them sell three of their combined TV channels before merging. Zee and Sony also have a streaming app each, have market leading music labels, and run movie production and distribution businesses. Zee also has a large news business in TV, digital, and print.

The other mega deal was the merger of PVR and INOX, which created India’s largest exhibitor, leaving Carnival Cinemas and the Indian arm of French chain Cinépolis at a very distant second and third respectively. The merged PVR INOX’s market capitalisation is just over ₹142 billion (~$1.73 billion). Together, they have an even more commanding position on exhibitor revenues from films released in theatres, pricing power on tickets, and control over in-cinema advertising.

We may see more mega deals and consolidation in social media, streaming, and audio. Music streaming app Gaana has been on the block for some time, and Amazon India is in talks to acquire streaming platform MX Player.

And those who aren’t selling the business are at least making concessions on independence. South Indian languages-focused OTT platform aha was among the few that strictly kept away from any telecom or OTT bundling deals, but last month it bit the bullet and signed up to be a part of Tata Play Binge, satellite cable service Tata Play’s OTT aggregator.

As media companies aggregate content across formats and media, they will have a lot more ad inventory to sell either directly or through programmatic networks. Airtel and Jio, for instance, have already built separate ad businesses that offer inventory on everything ranging from customer apps to music streaming platforms to the content on satellite TV channels, and in Jio’s case, its streaming apps JioCinema and Voot.

More consolidation, more aggregated audiences, and more ad inventory sold in bulk always carries the risk of more fraud. FICCI & EY estimated that digital ad fraud in India was worth ₹43 billion ($520 million) in 2022 alone, and reduced return on ad spends by 11%.

Interestingly, this is the first time in a few years that FICCI has put a number to the extent of ad fraud in India. It’s odd, considering digital advertising has overtaken traditional media here, and ad fraud is globally its number one problem; ad veteran Bob Hoffman has written a book called Adscam accusing online advertising of birthing “one of history’s greatest frauds”.

Last Scroll Down📲

Free Walking Tour Salzburg/Unsplash

What’s up WhatsApp: People are getting inundated with WhatsApp scam calls and messages, and unsolicited marketing texts from brands using WhatsApp for Business. One of these is a job-offer scam where someone with an international number calls you on WhatsApp to offer a “part time” job of liking videos and reviewing products online. Government officials are promising to look into it, and Meta is trying to get the situation under control with a ‘Stay Safe’ campaign guiding users on how to protect themselves from such scams. Great, now can they add a ‘Block Brand’ button in the app too?

Grabbing the bag: Two big media businesses reported earnings this past week. Apple reported $94.8 billion net total sales for the quarter ended March 2023, declining slightly year on year. Of this, its services revenue (Apple Music, cloud, other Apple subscriptions, and advertising revenue) grew to $20.9 billion, a record high for the company (pdf). But Apple’s management said in an investor call that it is facing “macroeconomic headwinds” in digital advertising and that the services business is growing because of subscriptions to services like Apple Pay. Meanwhile, Warner Bros Discovery reported a massive jump in quarterly revenues to $10.7 billion, but it turned more than $1 billion in losses despite making $50 million in adjusted Ebitda (earnings before interest, taxes, depreciation, and amortisation) from the streaming business this quarter (pdf). CEO David Zaslav promised in an investor call that the US streaming business will be profitable this year.

Let the music play: The Indian Performing Rights Society (IPRS) has won a landmark case against private Indian radio channels. The Bombay High Court has ruled that FM radio stations must pay royalties to music composers every time they play their songs. IPRS collects royalties on behalf of its members—composers, lyricists, and publishers. The defendants in this case were Jagran Prakashan group’s Radio City and Rajasthan Patrika’s FM Tadka channels (High Court judgement pdf).

One-two punch: SEBI isn’t letting up on the finfluencers’ business. First, it asked brokers and mutual funds to stop using finfluencers in marketing campaigns because they could be offering misleading advice. Its new advertising code (pdf) requires registered investment advisors to pay ₹3,000 (~$37) for permission to speak at public events or run an ad. India FinTwit is grumbling, largely because no such regulations exist for your finance creator yet.

Twitter tweet

Studio state of mind: Platform exclusivity is dying. Amazon is setting up a new vertical to distribute Prime Video’s original movies and series to other media outlets. It already releases at least one marquee film in theatres every year. This distribution business will be run via Amazon MGM Studios, set up after it acquired MGM Studios in 2022. Meanwhile, Spotify is also planning to offer its original podcasts (made by Gimlet) on other platforms.

Loosen the purse strings: Indian FMCG companies are planning to raise their advertising spends back to pre-pandemic levels as their margins improve. Managements of companies such as Hindustan Unilever, Dabur India, Tata Consumer Products, and Marico told investors in respective earnings calls that they want to keep the momentum going on their marketing budgets in the coming months. The FMCG sector is India’s largest advertiser by volume and value, especially in television.

Trumpet 🎺

Instagram: Sunita Kapoor

Hindi film actor Sonam Kapoor was at King Charles’ coronation in London last week, talking about the “unity” of the Commonwealth and building a “more peaceful, sustainable, and prosperous future for everyone”. While there was chatter that she might perform at the event, Kapoor merely made a few remarks and proceeded to introduce a musical performance on stage.

Indians love to see their actors represent the country internationally—Aishwarya Rai’s Cannes appearances and Deepika Padukone for Louis Vuitton are among the best examples—but this one drew more ridicule than praise.

It’s unclear why any Indian would choose to reminisce about the legacy of the British colonial empire at their current monarch’s coronation. And Kapoor’s performance reminds me of another iconic moment between an Indian actor and the British royal family. Shilpa Shetty had famously met Queen Elizabeth in 2007 when she won the UK reality TV show Big Brother. And she was heavily criticised for her decision to curtsy before the queen in a sari rather than going for the traditional namaste.

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you.

Thanks for reading, and see you again next Wednesday!