Columns

A year of digital disruption beckons

Paran Balakrishnan | Updated on December 25, 2019 Published on December 25, 2019

Tech revolution It remains to be seen which existing industries will survive and which new ones will blossom istockphoto   -  narvikk

There will be turbulence, churn in the auto, media and entertainment sectors — and generally speaking in the corporate world

When it was first mooted, it sounded like the next big thing. Who could argue private cars stand idle most of the time and that’s a colossal waste of an asset? What could be simpler than ordering a car on your smartphone only when you need it? Not wanting to lose out, the world’s top automakers flung funds into shared car and taxi services. GM launched Maven and Mercedes Benz and BMW jointly turned the ignition on Cars2Go. And for those who like two-wheelers, three years ago auto supplier giant Bosch revved up a scooter-sharing service Coup.

Changing track

Now, the auto industry giants are reversing from these New Age businesses. They’ve poured in money but discovered such businesses are cash-guzzlers and will need more funds than their shareholders will likely countenance. In fact, Mercedes has concluded their customers aren’t likely to jump on the ride-sharing or Uber, Ola, Lyft bandwagon and will still want to have their own vehicles for a while yet.

The auto industry’s dilemma is being replicated in scores of different industries.

Disruption is the hallmark of our age. But as we approach another year, the view’s still murky of which existing industries will survive and which new ones will be forged by the heat of the technological revolution.

In the auto industry, for instance, various unknowns are emerging. The only certainty everyone’s agreed on is that it’ll be a long time before driverless cars will be able to cruise India’s Wild West streets and highways.

Beyond that, the question is will it be car-sharing, hire-taxis, or electric vehicles or a combination? The Indian auto industry, like its international counterpart, is struggling with all these options. Bajaj has just launched its first electric scooter and MG Motor India is taking bookings for its ZS EV.

Kia has started working on an electric vehicle for Asia but may not bring it to India yet. Meanwhile, two-wheeler start-ups are also moving rapidly. Ather Energy’s opening a giant 400,000 sq ft plant in Hosur where it will make both scooters and lithium-ion batteries. So far, it’s only launched in Bangaluru and Chennai, though it aims to rollout in 30 cities. Nearly 50 other two-wheeler start-ups are also joining the road race, and more newcomers are expected it, turning it into a survival of the fittest road contest.

Great uncertainty can also lead to huge opportunities. So, we have Ola Cabs — or rather the Ola Group — reaching out in new directions. Ola’s already a multinational but now it’s making a hugely ambitious move to London in the new year. Uber has already 45,000 taxis in London, and two other companies, Bolt and Kapten have between 10,000-15,000 vehicles each, so the rivalry’s fierce. Ola Electric’s also got far-reaching plans for the future and is getting into tie-ups with BSES to launch battery-swapping stations.

Electric-charging stations are the other great opportunity of the moment. Tata Power has already put up 85 charging stations and plans to have 500 across a string of cities by end 2020. It will also put up 100 in Maharashtra. The company’s looking to tie up with oil marketing companies to put up these stations. Batteries are the key to the electric transportation future but therein likes an additional uncertainty. Nobody knows which system will triumph finally — charging stations or battery swapping as championed by India’s electric-vehicle pioneer Chetan Maini.

Hazy picture

Shift from automobiles to media and entertainment. Here again, the screen picture is showing huge growth but also even bigger uncertainty. Tiktok, which launched in 2017, now has 120 million active users in this country — 40 per cent of its global users. Tiktok and Facebook are battling both in India and globally for the youth market, though Tiktok suffered a setback mid-year when the Madras High Court declared some of its content unsuitable for children.

Move on now to the country’s over-the-top (OTT) platforms where Hotstar is leading the way. Hotstar scored an enviable increase in viewing numbers this year. It had 400 million downloads this year, double what it had in 2018. Video consumption was also up hugely and viewers stayed on the platform twice as long as the year before. Hotstar’s driven massively by sports content and the 2018 IPL final was watched by 10.3 million viewers concurrently. That rose to 25.3 million viewers concurrently for this year’s Cricket World Cup semi-final between India and New Zealand.

The OTT story has also been about the rise of regional content. Hotstar’s India Watch Report says this year 50 per cent of its viewers clicked on Hindi programmes while regional languages comprised 30 per cent of viewership. English-language viewers came in at a meagre 10 per cent of the total. The three most-viewed regional languages are Tamil, Telugu and Bengali. Says one analyst: “Demand will explode in the regional space. Everyone’s doing so much more in the regional sphere. The audience is just so familiar with content in their language.”

Perhaps then, it’s not that surprising more viewers are tuning into OTT platforms in smaller towns. Hotstar says 54 per cent of its viewers were from non-metro cities year. That’s risen in 2019 to 63 per cent. Female viewers now form 45 per cent of the platform’s viewers.

For now, companies are still pouring loads of cash into OTT platforms though some are saving by commissioning fewer exclusive OTT programmes. The big lesson that’s emerged clearly this year, though, is that people are willing to pay for content. Says an analyst: “Subscriptions are the way forward.”

The platforms will also be reaching out to greater numbers of viewers because the telcos are offering more bundling at considerably cheaper rates and that’s a trend likely to increase sharply in the coming year. Of course, there is a rider: the mobile companies have just raised rates substantially, and with the economy in a downturn, that could have a negative impact on OTT viewership.

So on the cusp of this new year, the only thing we can say confidently is that there’ll be more turbulence and churn not only in the auto, media and entertainment world. Looking around, it’s clear that it’s going to be the same story in other corporate spheres. Just hang on to your hats — and have a good year ahead.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on December 25, 2019
This article is closed for comments.
Please Email the Editor