The nature of a beast (but to some an angel) called ‘Disruption’ is that, by definition, it is unpredictable. Businesses are constantly grappling with the challenges of identifying and confronting ‘Disrupters’. Unfortunately, the denizens of the ‘status quo’ recognise such disruptions only after the disruptive event.
The best example of a serial “Disruptor” is Steve Jobs and his company, Apple Inc. To describe Apple in its present state is akin to the proverbial blind men trying to describe an elephant. Depending on the context, Apple Inc can be variously described either as a computer hardware company or a mobile phone company or a music distribution company or a camera manufacturer or a computer software company or a digital store front or... or... (the list is constantly being updated!!). In the course of its relentless pursuit of innovation, Apple Inc has upset many business models in industries as varied as music, cameras, mobile phones, computer devices etc.
Similar to any other consumer facing industry, if not more, the film industry is also constantly confronting digital Disrupters in – film content, marketing and distribution.
Before I explain the possible digital disrupters in the three areas mentioned above, I would like to lay the background to my view of the Disrupters with some statistics. Year 2010 was an inflection point in the penetration of Internet users in India; the figure crossed the 100 million mark. However, the proportion of Broadband users within the universe of Internet users is abysmally small – approximately 10 million. For a country with our size (population of 1.2 billion), the potential penetration of true Broadband connectivity will unleash forces that are bound to impact and disrupt numerous industries across the spectrum.
Disruption in film content:
The race to get the audience’s attention is getting cluttered, with consumers having nearly ubiquitous access to many choices and niches. Consumer awareness will increase manifold in a digital world with response time to assess success or failure of a film shortening substantially. The top-down approach of consumers being in the receiving end will be replaced by a bottom-up approach, which places more prominence on consumer interest.The might of the forces, which cater to the mega-budget and box-office driven least common denominator will diminish significantly. This essentially implies a surge in production of niche films by independent producers that address selective audience. Low-budget, short-form content, which conveys a compelling story within a small period of time will find an audience with consumers “on the go” either on a smart phone or tablet.
Disruption in film marketing:
A connected audience implies that the channels for communication and marketing to consumers are well defined. Social media tools like Twitter, Facebook, Orkut, Google+ etc have become powerful media vehicles. The viral dissemination of opinions amongst film buffs will be the primary port of call for consumer decisions to watch a film. There will be robust Search/ Recommendation engines that will provide consumers the ability to discover and access films based on specific individual tastes.
Disruption in film distribution:
The power of theatre chains to dictate viewership windows will decrease substantially. The business model will include a mix of the current mega-budget films with high price points and numerous moderate-budget films with low price points. A digital world provides more shelf space for a longer period of time thereby enabling monetisation beyond the current short periods of one to two weeks.
Digital technology gives consumers the power to choose:
While the developed world is already facing the above disrupters, the developing world, especially India with its size and diversity, will straddle both the worlds (non-digital and digital) in the short term before transitioning completely to a digital environment.
Jagdish Kumar President, Media and Entertainment, Reliance Industries Ltd