Submitted by admin on Mon, 07/03/2017 - 13:23

Despite the intense competition in the OTT space, Nickhil Jakatdar, Founder of the online video platform Vuclip feels that it has got its business model right, which will enable it to outlast many of its contemporaries.



Despite the intense competition in the Over-the-top (OTT) content space, online video company Vuclip feels that it has got its business model right, which will enable it to outlast many of its contemporaries. The company, described by its founder Nickhil Jakatdar as a “technology-led media company”, has around 4.5 million active users just in India and is present in more than 20 countries worldwide. By 2020, the company aims to have 100 million monthly active users across the markets where it has its presence. Ambitious goals indeed, but then no one has ever blamed Jakatdar of lacking in ambition.

Genesis of Vuclip

“Before Vuclip, all my start-ups were in the enterprise space. I wanted to do something in the consumer space. I was very intrigued when YouTube was acquired by Google in 2006. While YouTube was doing very well, the primary consumption was on the desktop.

We thought that it was only a matter of time before emerging markets like India will start consuming content on YouTube, but in this case the consumption will happen on mobile and not desktop,” explains Jakatdar.

The challenge before the team was to create an engaging mobile experience despite the challenges around streaming video on mobile such as lack of quality devices, network connectivity, high cost of data, etc.

“It has been a great journey with a lot of learnings. Our DNA is technology; we are all technologists and we tried to solve the technology challenges like how to deliver video even when the bandwidth is not that great. Over time we have had to keep changing the problem statement because the technical challenges have changed. How do you deliver a great video quality not having the size of the data piles too big, as otherwise you have to buy multiple data plans. We are still working on solving such issues. Additionally, part of the journey has also been about how to get the content right,” he reminisces.

One learning about content, says Jakatdar, is that it is important to not only rely on intuition but also look at the data available. “If you create content thinking this will work or this will not work, you will be surprised,” he says. “Consumers expect the providers to get the technology right but it is the content that they actually look for,” notes Jakatdar. He admits that Vuclip might not be the most creative, reiterating the point that they are technologists, but he points out that there are enough creative people in the industry.

“We said let’s understand the insights from our consumer base. We put data scientists to look into the problem and understand what type of content works. The answer varied from country to country,” said Jakatdar. For example, he pointed out that the Indian market is equivalent to 25 countries. “We come up with locally relevant content by looking at the data and deciding what is relevant in the market. We not only license content but also create our own original content for the market,” he informed us.

The big learning for the Vuclip team, in their 10-year journey, has been getting the business model right. “In a market like India, advertising is just starting to pick up. The conventional wisdom is that consumers do not like to pay, which is true but it is a lot more surmountable if you make the price point something that they care about and are already comfortable with. So, it is important to understand the right business model in each market,” said Jakatdar.

Partnership With PCCW

Originally banking on investments from a group of Silicon Valley investors, the company’s head-quarter’s is in Silicon Valley, the Vuclip management had a change of heart around 2015. Says Jakatdar, “Since most of our business interests lie in Asia and we have transitioned into a media company, we needed to find investors who understood this market and media.”

With Vuclip drawing interest from a number of investors, what was the deciding factor in favour of PCCW? The first reason, says Jakatdar, was that PCCW was the biggest paid TV operator in Hong Kong. The second; even PCCW had ambitions to move out of Hong Kong, which happily coincided with Vuclip’s plans for the region. “The third reason was that they have the mindset of an entrepreneur. Eight years before the deal, PCCW was new to the pay TV business and was the No. 4 player; today they are No. 1. The company knew how to disrupt the market and also understood the potential of getting disrupted by a new entrant in the market. This was a mindset that I personally was looking for because I wanted people who had the drive. Plus, Richard Li, the Chairman at PCCW, was the founder of Star TV. He is familiar with the bigger media play and his ambitions match ours. Now, I don’t have to deal with too many investors because that can slow you down,” he said.

India’s place in Vuclip’s Global Ambitions

Vuclip has been aggressively launching new content properties in the Indian market over the last few months. In the last three months, Vuclip has launched eight original content properties, including four in Telugu and four in Hindi (two of which have been directed by Vikram Bhatt) on Viu, it’s online video platform. The company has also signed eight new content series. “We have always had ambitions of being a global company,” says Jakatdar. “You need to build scale in the media space because investments are made into making original content; so the bigger base you have to spread it across, the better you can monetize it,” he added, further stating that India is a huge market and one worth investing in as a standalone market. “We are also present in 20 other markets where we will keep investing though our investments in India will also be high,” he noted. Commenting on the super competitive Indian market Jakatdar quips, “Everyone and their brother are in the OTT space (in India).

The Differentiator

Then what differentiates Vuclip? “If I remove my Vuclip hat and put on my consumer hat, the No. 1 thing I ask myself is, why should I download an app? It has to play a certain role in my life for me to download it and keep it. As a consumer I am not going to download and keep 30 apps. I might download five or 10 and then uninstall them. But, which one will I download and keep? For this the consumer needs to have a very clear idea about the value of the app,” explained Jakatdar.

He gives the example of Netflix, which he says has a very clear value proposition, namely, English language originals. “I will have one app which is the best cricket app, another one that gives me the best Bollywood content. So why should people come to Vuclip? We have not spent money on TV advertising but what we have done is created these niches in people’s minds about the value that Vuclip provides. We don’t want to be everything to everybody but we want people to know what we are good at,” he said, adding that Vuclip wants to be the go-to app for locally relevant content. “In the month of May, we drove north of a billion minutes in consumption,” he added proudly.


OTT: A Long Game

When asked why the company has not spent on advertising so far, especially considering how every other OTT player is spending aggressively to promote their platforms, Jakatdar remained nonchalant. Does this not put Vuclip in a competitive disadvantage? However, he does not seem to believe that is the case. “Our belief is that one should spend money on brand advertising, like TV, once you have the unit economics right; once you have a basic model working where consumers are coming and watching your content, you can then scale this working model,” he said, adding that the company will engage in marketing campaigns in the coming months. “What we find in many markets, including India, especially in the OTT space, is that a lot of people start with TV advertising and then try build their value proposition,” he added. Citing the example of Netflix, he pointed out that the platform had built its value proposition long back so it was not a problem for them.

Speaking about subscription, he said that India would slowly come around to a subscription model but that would not happen as long as there are players who continue to offer content for free.

“We believe in a freemium model where a certain amount of content is available for free while other content is behind a subscription paywall. In India, too, we believe that there will be a balance between freemium and subscription but if someone is going to provide content for free then no other model is going to work. For how long can this (providing free content) work? We are already seeing some players re-evaluating their business model.

Our view is that this is a long game and we have to stay true to the basics and get our value proposition right. There are some people spending a lot of brand dollars but these might not be around in six months or a year. On the other hand, there are some players who are spending less but spending it wisely. My view is that in three years, there will be only five OTT players who will concentrate on very specific niches,” says Jakatdar.


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