Monetizing Online Video

As broadband adoption approaches 70% of online homes, the average number of video streams delivered per month has more than doubled over the past year. In addition to the well-documented rise of YouTube and the proliferation of video clips across MySpace’s network, other major websites from portals such as Yahoo!, MSN, and AOL, to network sites such as ABC.com, NBC.com, and CBS.com, now offer more online video content than ever before. Consumer demand for video has been fueled by increased penetration of broadband and its always-on, high-speed connection, social networking sites which enable users to easily post and share content, greater availability of professional content, and increased user comfort and savvy online. Additionally, advertisers have demonstrated strong interest in online video advertising, with demand often outstripping supply. US domestic online video advertising reached nearly $400 million in 2006 and could approach $700 million in 2007, 70% growth Y/Y, but still only 3.3% of total US online ad spending. By 2010, online video advertising will total $2.4 billion, or 7.4% of total US online ad spending. However, despite the steadily increasing popularity of online video and pent-up advertiser demand, monetizing video remains a challenge. Both Yahoo! and Google have recently indicated that they are experimenting with various advertising models, but neither company has yet determined the best way to monetize online video audiences. Google’s YouTube, the leading online video aggregator site, is currently only monetizing a fraction of its viewership, with advertisements appearing sparingly throughout the site. While online video holds compelling promise for content providers and aggregators, as well as advertisers, the path to monetization remains unclear.

There are two primary models through which online video content is currently being monetized: 1) a user supported model, with the user paying directly for access to video content via subscription or download fees; and 2) an advertising supported model which allows a user to view content for free, but with accompanying advertising. While the subscription or fee-based model will likely continue to be well suited for certain forms of premium, specialized content, the ad-supported model has much greater sustainability and will ultimately be the most common form of monetization.

Given video’s more interactive nature and a relatively limited supply of high-quality video inventory, CPMs for online video advertising typically carry a premium to standard display advertising or even rich media. Video ads in a targeted environment can command CPMs north of $40 while ads on more general, run-of-site portal inventory, may carry CPMs closer to $20-$25.

Despite generally negative sentiment around pre-roll ads, they remain the most common form of video advertising, at least for now. A pre-roll is typically a 15 or 30-second video advertisement which a user must play prior to viewing the selected video clip. Content sites including CNN.com and NYTimes.com, as well as larger portals MSN, AOL, and Yahoo!, currently use the pre-roll format extensively in monetizing online video. Despite its prevalence, pre-rolls remain controversial given the impact on the user experience. Google has noted in the past that it does not believe in pre-rolls and that they have traditionally not worked, but it has said it is looking at variations on the pre-roll in testing other formats. Furthermore, a recent poll conducted by Harris Interactive revealed that 42% of frequent YouTube watchers surveyed would view YouTube videos “a little less” if each clip had a pre-roll ad, and 31% would visit YouTube “a lot less” if pre-rolls accompanied each clip. Separate surveys from both Forrester and Advertising.com suggest that users find many pre-roll ads too long, with a 15- second spot preferred to a 30-second spot. From an advertiser and ad agency perspective, pre-rolls have proven to be a convenient transitional ad format as advertisers are often able to simply repurpose already-produced television advertisements for use on the web. However, marketers and their agencies will need to become more innovative going forward to differentiate online video ads from TV and be better able to fit them into shorter time slots. Marketers’ digital experts are increasingly challenging agencies to be more creative. Despite the noise around prerolls, their efficacy may depend in large part on the content behind them. For example, advertisers had good success with CBS.com’s March Madness last year because the exclusive content was highly compelling. There is a place for short pre-rolls (10-15 seconds) going forward on some professional content and a very limited amount of user-generated content. A recent Advertising.com study suggests that 15-second spots are preferred by customers over 30-second spots and have 20% higher play rates. The appropriateness of placement within specific content, however, may need to be determined on an individual basis.

Although the pre-roll remains the most common form of online video advertising, companies are testing other ways to monetize online video viewership. For example, ABC.com and NBC.com feature mini commercial breaks, or mid-rolls, which run during full episodes of shows available for online streaming. Each break typically lasts 30 seconds and the episodes may feature a single sponsor across all commercial breaks, or individual advertisers for each break. Similarly, Google has tested a mid-roll format during streaming episodes of Charlie Rose and other free content on Google Video. Mid-rolls can be effective and acceptable to users, but their use will likely be limited to long-form professional content, perhaps videos that are at least 20 minutes long. Post-rolls, or advertisements which appear following a program or clip, are also being tested by Google, MSN, and other providers. Google has suggested that it could do more with post-rolls going forward, but this format is less appealing to advertisers, even though it is often priced on a performance basis.

Many sites, including CNN, are also offering graphical ads alongside, or below, video clips which play within a media player. Overall, video providers and advertisers are still working to achieve the right balance between creating a satisfying user experience while offering a compelling and effective ad format.

Online video advertising can potentially provide advertisers with more effective results than existing rich media or, in some cases, traditional television commercials. Online video advertising, if well executed, can create a “lean-forward” experience, where the user is actively engaged with the message as opposed to typical television advertising where the viewer is more passive.

Online video ads have the potential to introduce interactivity into the relationship with the viewer, an element which has been a part of the fabric of online behavior, but uncommon to traditional television advertising. For example, an interactive video ad may compel a user to click on an ad, vote on or rate an ad or product, or submit a comment, all actions which raise the level of engagement with the advertisement. An October 2006 study published by PointRoll, a provider of online rich media, compared “average brand interaction time with and without interactivity using PointRoll technology,” and found that by adding interactivity to an online video ad, time spent with the ad increased 42% for retail advertisers, 52% for telecommunications advertisers, and 79% for finance advertisers. Time spent with entertainment advertisements increased only 1%, but this category had the highest time spent to begin with, at almost 15 seconds.

Online video advertising offers greater creative possibilities than traditional online formats such as banners, pop-ups, text ads, or even rich media. Furthermore, advertising agencies have a rich history of creating 15 and 30-second advertisements for television and many of these creative skills can be readily transferred to the online medium. In the near term, this familiarity has resulted in many advertisers porting their television creative over to the online channel as the ad unit is basically the same, though most realize that content created specifically for the Web will garner better results. However, as clients are becoming more attuned to the unique aspects of digital media, they are increasingly pushing their agencies to create compelling, web-specific advertising campaigns, rather than repurposing content from other media. The combination of the ROI-driven nature of online advertising and the creative possibilities of video advertising will ultimately yield more entertaining and effective advertisements.

Online video advertising can potentially address an issue which has been a long-time complaint around traditional television advertising, the lack of measurability. Well designed, interactive online video advertisements will allow an advertiser to know exactly how many viewers played the advertisement and how many were compelled to click on a link or complete some other type of action. Sites which require a user to login should also be able to capture additional information and user history that can potentially help improve targeting for advertisers. The ability to measure the return on investment for an online video advertisement makes this form of video advertising a unique and attractive value proposition.

Greater monetization of online video faces several interrelated challenges. Effective monetization of online video will be based on the user experience, but both users and advertisers must be willing to experiment with new formats. While pre-rolls, mid-rolls, and post-rolls are currently in use, it is still too early to determine which ad formats will ultimately resonate best with users and advertisers. In order to better monetize online video viewership, online video aggregators and content sites must provide a compelling mix of substantially large audience sizes and high-quality inventory to advertisers. The most significant factor limiting the amount of high-quality online inventory available to advertisers, particularly on YouTube and MySpace, is the challenge online video aggregators face regarding the unauthorized use of copyrighted material. In order to qualify for the Safe Harbor provision under the Digital Millennium Copyright Act, a service provider must “not receive a financial benefit directly attributable to the infringing activity.” This prohibits YouTube, MySpace, and other video aggregators from monetizing any video content which is not expressly licensed to the site by the copyright holder. While YouTube and other aggregator sites are expected to ultimately make more headway with content partnerships, the amount of high quality inventory available could be limited in the near-term. Furthermore, given the wide range of subject matter and quality among user-generated videos, mainstream advertisers may maintain a cautious stance toward advertising in a UGC environment, opting instead for placement around higher quality professional content, of which there is relatively limited supply. Control over the context and environment in which a brand is presented is crucial to many clients, and YouTube and other sites with a large supply of user-generated content must address this concern in order to drive further monetization. Finally, a large percentage of high-quality online video content currently available is general news (CNN, MSNBC, NYTimes), sports (ESPN, FoxSports), or run-of-site type inventory that may not enable the degree of targeting many advertisers desire. A potential lack of both appropriate and targeted video inventory could prolong the path toward greater monetization.

Online video consumption will continue to grow rapidly over the coming months as users view many forms of content online, including full episodes of their favorite shows, music videos, news segments, sports highlights, and content created exclusively for the Web. There will be continued experimentation with various ad formats by Yahoo!, Google, and others, as advertising dollars shift to online video and content providers and aggregators strive to meet this demand with more compelling and effective advertising placements. The pre-roll format will continue to be the most common form of video advertising in the near-term, spots are expected to shorten in length, with a greater proportion of 10-15 second ads. Content providers and video aggregators may work to improve the quality of the video viewing experience to make ads more seamless and less disruptive. Mid-roll ads will likely continue to be used for long-form professional content, such as full-length programs on ABC.com, CBS.com, or NBC.com, though will likely be less common during short-form content. Streaming video on TV network sites may be more suitable for mid-rolls in part because it is most similar to a TV-like experience. While content licensing agreements are center-stage at the moment, relationships will be forged over the coming months as Google and others integrate better copyright detection technology. Ultimately these agreements should help grow the supply of professionally produced online video content, helping to meet advertiser demand for high-quality inventory. The monetization of user-generated content, however, will likely prove more challenging and develop more slowly. More dramatic organizational changes could occur within advertising agencies where barriers still often exist between the traditional creative teams responsible for television commercials and the online advertising teams responsible for rich media, banners and text ads. Greater cross-media cooperation within agencies should lead to higher quality video advertising created exclusively for the online channel, as opposed to television commercials that are simply repurposed on the Web.

Thanks comScore Networks & Lehman Brothers Research, February 2007.

Global Net Traffic Jan07

In January 2007, Microsoft sites remained the most trafficked site in terms of unique visitors globally while Google and Yahoo remained close second and third. Most of the Microsoft sites’ strength came from international markets as domestic UVs declined slightly YoY, and Microsoft Sites were the third most trafficked domestic site. The top 10 ranking is unchanged in January 2007 from December 2006. YoY, Fox Interactive Media continued to be the fastest growth site YoY as its traffic grew more than 4x compared to the year ago period, boosted by its MySpace property. Wikipedia sites also exhibited tremendous growth both YoY and sequentially in the recent months, to reach 189 million monthly UV in January 2007. Should this trend continue, Wikipedia is on track to become top 5 most trafficked sites globally in the next couple months.

Looking at Page Views, Google moved up and became the top site since December 2006 with YoY growth at 67%, while Yahoo Sites remained a strong number 2 despite the negative impact from AJAX. Fox Interactive Media remained the leader in PV growth rate with the contribution from MySpace, which contributed ~97-98% of total PVs. One noteworthy change among the top 10 sites was the rapid ramp-up recently at Facebook.com which garnered close to 14 billion PV in January 2007, a YoY growth of over 170%. Ranked 6th in terms of PVs is the NHN Corporation which is a Korean Internet company that runs the nation’s largest portal / search site www.Navor.com as well as the largest gaming platform Hangame.

In January 2007, Windows Live Space continued to be the dominant leader in the social networking category globally with monthly unique visitors at 110 million, up 22% YoY and 5% sequentially. Both Flickr.com and Facebook.com ramped up nicely in the past 6 months (both exhibited north of 100% YoY growth in January 2007) despite its ebbed flow in terms of unique visitors in the first half of 2006. MySpace.com is the second fastest growing social networking site globally on a YoY basis at 143%, but a deceleration from the 160% YoY growth level in December 2006. While HI5.com does not get tremendous traction in the domestic market, it has been growing nicely outside of the U.S. and reached 24 million UVs in January 2007. Hi5.com is a social networking site focusing mainly on established as well as the undiscovered art talents.
In January 2007, Youtube.com grew global UVs by 13x YoY to reach 134 million unique visitors, but the YoY growth marks a deceleration from the 20x level in December 2006 and 23x level in November 2006.
Thanks comScore & Bear, Stearns & Co. Inc. February 2007

Internet India

In the early days, the Internet industry in India lagged the U.S. due to government control on access. Videsh Sanchar Nigam Limited, which was state-owned at that time, launched Access Services in India in August 1995. For the first four years VSNL had the monopoly on access in the country providing mostly dial-up service. The limited bandwidth and slow speed restricted the quality of content that was available. During the first three years of VSNL's monopoly, the Internet subscriber base grew very slowly reaching 140,000 subscribers by the end of March 1998. Companies such as Rediff.com and Sify emerged and were able to provide quality localized content and service, but growth in Internet penetration was slow. In November 1998, the government ended VSNL's monopoly and allowed the entry of private companies into the access business. The entry of these players provided much needed competition and the resulting drop in prices spurred a surge in subscriber growth. Between March 1999 and March 2001 the subscriber base grew from 280,000 to 3 million (mostly dial up). The dot com bust happened in India as well and many Internet-based companies went under, reducing the quantity and quality of content/application available online. The classic chicken and egg situation emerged, whereby consumers had little motivation to go online since content/services were not available and hence business models could not be created on the back of low Internet penetration and critical mass of users. Surprisingly, a country known for its tech prowess is highly underdeveloped in its own infrastructure and adoption levels, PC penetration in India was in the low-single-digit per 1,000 people and currently stands at approximately 6 PCs per 1,000 people. The lack of compelling applications kept PC penetration at these abysmally low levels. Email/chat had been the primary reason for Internet access (and continues to be), but lack of ubiquitous access curbed the growth of this killer application. In the meantime, the mobile revolution was overtaking India with intense competition among carriers driving down plan prices. Lower prices and difficulty in obtaining landlines (which were still controlled by the government), significantly augmented the value proposition of mobile phones. This trend still continues, in the April-July 2006 time frame, mobile gross ads were 18.2 million while fixed line gross adds were only 0.58 million. The total number of mobile subs in India as of July 2006 was 111 million or 10% penetration of the total population. The ubiquity of cell phones drove the use of SMS as the leading method of communication and this still continues for both business and personal purposes.

Currently, the number of Internet users in India is pegged at approximately 45 million. The government has loosened its restrictions on access and private companies have entered the Internet market, thereby, driving growth. Of the 45 million online users, only approximately 10 million would be considered power users, i.e., someone who regularly uses the web for research and ecommerce. Approximately 70% of the population accesses the web from cafes. Most Internet subscribers in India continue to use dial up, although broadband is growing slowly. There are currently only 1.7 million broadband subscribers in the country versus approximately 40 million in China. The primary use of the web is for communication, and even then it lags the mobile phone. There are more than 100 million mobile phone users in India, and most of them use SMS as their primary means of communication. The current communications game seems to have been won by mobile, but the Internet has a natural advantage in the research/ecommerce function and can very well win round 2. Online advertising is expected to grow at a CAGR of 50% from 2005 to 2010; however, the absolute numbers are still small (expected to be around $57 million for fiscal year ending March 2007). We believe the actual growth could be much higher than anticipated, due to investments from global companies such as Yahoo! and Google, the emergence of ecommerce companies, significant venture funding over the last year, and additional monies being allocated to advertising and marketing. Ecommerce is expected to grow at a CAGR of 72% from 2005 to 2010; though as the absolute numbers are still small (expected to be about $500 million for fiscal year ending March 2007). Initial ecommerce companies had faltered on execution but the new entrants appear to have well thought out business plans, especially, online travel, matrimonial and jobs-based companies. Currently, credit cards are estimated at about 25 million in a country with a total population of more than one billion. According to PhoCusWright, online travel gross bookings in India totaled $295 million in 2005 and this should grow to approximately $2 billion by 2008. Companies such as Makemytrip.com (the largest travel portal in the country), InfoEdge (which owns naukri.com, the largest job portal) and Shaadi.com & Bharatmatromony.com (matrimonials) have paved the way with simple value propositions, that have resonated with Indian audiences. Due to the limited online population and the smaller subset of researchers and purchasers on the web, the concept of assisted Internet has taken root in India. This involves Internet-based companies opening retail storefronts throughout the country. Companies involved with jobs, matromonials and online discount brokerages have gained significant traction with this "clicks and bricks" strategy and continue to grow their physical presence. The Indian constitution recognizes 25 languages, while the total number of languages in the country exceed 1,600, causing significant fragmentation. Depending on the source, the number of English-speaking people in India ranges from 150 million-300 million. According to the 2006 National Readership Survey, the top-10 dailies in terms of readership were not in English. Most Internet companies have made efforts to offer content and services in other languages as well. Both Sify and Rediff offer their content and email in various languages (Rediff offers its email in 11 languages). The Internet behemoths - Yahoo!, Google and MSN also recognize this opportunity and are now offering search capabilities in Hindi. Service companies, especially the matrimonial companies, are expanding aggressively into different languages. What is really needed in India is a killer application that drives consumers not only to the web, but to obtain a broadband connection. The next killer application could be in education, ecommerce, entertainment or gaming. Companies such as Educomp are pioneering the use of digitized content in schools, although the current model works within the school network only. It has also developed an online strategy and recently launched Mathguru.com, which saw 2,500 registrations in two weeks of the launch. Once students (and parents) see the benefits of eLearning in their schools, there will be an increased motivation to have a PC at home. Through Sifymax.com, Sify is attempting to create an entertainment portal relying heavily on multimedia content. The site features a combination of exclusive and non-exclusive content for music, movies, lifestyle, business, sports, etc., and has given it the early mover advantage. Already the company is seeing about 130,000 clips viewed/downloaded everyday. The company has also created city-specific content for Bangalore and Mumbai. The government in India is emerging as the fourth largest buyer of information technology (after the telecom, manufacturing and banking and finance industries). It is estimated that the government accounts for approximately 15% of the IT spend in India. The maximum benefit will be from projects that drive Internet penetration deep into India's smaller towns and villages where 70% of India's population lives. The Indian Internet advertising and ecommerce industry is still small. There are several gating factors including broadband penetration, PC penetration and lack of compelling content/applications. The industry still has a way to go before it reaches critical mass. Yahoo! and Google are investing in and evangelizing the industry, but it will require a concerted effort from corporates and government to pave the way for strong, sustainable growth.
Thanks KAUFMAN BROS. RESEARCH, 2006.

Indian Railways Selects Sify for eTicketing

Indian Railways has selected Sify to provide online ticketing for IRCTC through Sify’s iWay chain of 3400 cybercafés across 154 cities. A pilot project has been launched in Delhi with 10 iWays and the final launch schedule is expected in Q1 2007. Rail travel is a big industry in India. The state run Indian Railways has a monopoly on rail travel in India transporting about 5 billion passengers every year. Due to the heavy demand for rail travel, ticketing has always been a cumbersome activity which entailed long waits in serpentine lines to reach a booking agent at the reservation center, as has been the author's experience in the past. Under this scenario, the value proposition for an online reservation system was simple and compelling, which led to the IRCTC ecommerce portal becoming the largest in Asia. Currently there are more than 1 million transacting users on the site, which handles more than 13,000 transactions every day. The site accounts for 1-2% of total rail tickets sold and this is expected to reach 10% of tickets sold in 2-3 years. With 3400 iWays in 154 cities (and growing), Sify owns the largest number of branded storefronts in India, providing it significant reach into smaller towns and cities. With a cybercafe within easy reach of millions of Indians, Sify has the opportunity to leverage the potential and significantly increase the monetization of its cafés. According to IRCTC, 31% of online tickets booked at their site are from non-metro cities, and about 47% are for non-premium seating (i.e., non air-conditioned coaches). This is a good illustration of the latent demand for online booking from small towns and across socio-economic classes. Additionally, travelers can pay cash for the ticket at the cybercafé and the supervisor will swipe a credit card to enable to transaction—this will circumvent the problem of low credit card and Internet banking penetration in India, which has been a bottleneck for ecommerce growth. Travelers will also be able to receive a printout of the tickets immediately. However, before a full scale launch, Sify will need to introduce training exercises for its franchisees, put systems and procedures in place and develop a marketing plan to target the population close to the cafés.
Thanks KAUFMAN BROS. RESEARCH, 2006.

Entertainment & Media - India

The Indian Entertainment and Media (E&M) industry is poised to grow at 19% compound annual growth rate (CAGR) to reach $18.6 billion by 2010 from its present size of $7.8 billion, according to 2005 annual edition of the FICCI - PricewaterhouseCoopers report Indian Entertainment and Media Industry-Unravelling the potential. Economic growth, rising income levels, consumerism, coupled with technological advancements and policy initiatives taken by the Indian government that are encouraging the inflow of investment, will prove to be the key drivers for the entertainment and media industry. The industry has been forecast to outperform the economic growth in each year, till 2010. “Two factors that will contribute to the growth of the industry are low media penetration in lower socio-economic classes and low ad spends” said Deepak Kapoor, Executive Director and Leader for PricewaterhouseCoopers’ Entertainment & Media Practice in India. “Today media penetration is poor in lower socio-economic classes, but efforts to increase it even slightly are likely to deliver much higher results, simply due to the absolute numbers being large,” he added. Strong economic growth, rising consumer spending and regulatory corrections are drawing foreign investments in most segments of the E&M industry, especially the print media. “The sector needs a consistent and uniform media policy for increase in investments. Also, the on-going threat of piracy, which continues to hinder investments in all sectors, needs efforts not just by the industry bodies, but by government, with empowered officers enforcing anti-piracy laws,” said Dr. Amit Mitra-Secretary General, FICCI. Commenting on the future of the industry, Deepak Kapoor said, “Convergence will play a crucial role in the development of the Indian entertainment and media industry where consumers will increasingly be calling the shots in a converged media world. Broadband access and Internet Protocol (IP) will be the technology enablers that will evolve this new breed of consumers, as opportunities for them to access and manipulate content and services will be overflowing, while their time and attention will be limited. Established approaches of pushing exclusive content through non-linear-channels or networks to mass or segmented audiences will no longer guarantee competitive advantage.”

Indian advertising spends as percentage of GDP, at 0.34%, is abysmally low, as opposed to other developed and developing countries, where the average is around 0.98%. Advertising revenues are vital for the growth of this industry. “While today the low ad spends may seem like a challenge before the E&M industry, it also throws open immense potential for growth,” points out the report. This potential can be estimated by the fact that “even if India was to reach the global average, the advertising revenues would at least double from the current level of around $2.9 billion,” as per the report. The year 2005 was marked by the entry of new players across all segments of the industry. The most prominent entry was that of the Reliance Group in both the filmed entertainment and radio segment. In the radio segment, companies have bid for FM licenses in 338 small towns and cities spread across the country in the second phase of liberalisation, and an overwhelming majority of these companies did not even have a presence in the entertainment and media space, let alone the radio sector, earlier.

Current size of Television industry is $3.3 billion, and projected size by 2010 is $9.5 billion (CAGR: 24%). Subscription revenues are projected to be the key growth driver for the Indian television industry over the next five years. Subscription revenues will increase both from the number of pay TV homes as well as increased subscription rates. The buoyancy of the Indian economy will drive the homes, both in rural and urban (second TV set homes) areas to buy televisions and subscribe for the pay services. New distribution platforms like DTH and IPTV will only increase the subscriber base and push up the subscription revenues.

Current size of Filmed entertainment industry is $1.5 billion, and projected size by 2010 is $3.4 billion (CAGR: 18%). Advancements in technology are helping the Indian film industry in all the spheres – film production, film exhibition and marketing. The industry is increasingly getting more corporatized. Several film production, distribution and exhibition companies are coming out with public issues. More theatres across the country are getting upgraded to multiplexes. And initiatives to set up more digital cinema halls in the country are already underway. This will not only improve the quality of prints and thereby make film viewing a more pleasurable experience, but also reduce piracy of prints.

Current size of Print media is $2.4 billion, and projected size by 2010 is $4.3 billion (CAGR: 12%). A booming Indian economy, growing need for content and government initiatives that have opened up the sector to foreign investment are driving growth in the print media. With the literate population on the rise, more people in rural and urban areas are reading newspapers and magazines today. Also, there is more interest in India amongst the global investor community. This leads to demand for more content from India. Foreign media too is evincing interest in investing in Indian publications. And the Internet today offers a new avenue to generate more advertising revenue.

Current size of Radio is $67 million, and projected size by 2010 is $267 million
(CAGR: 32%). The cheapest and oldest form of entertainment in the country, which was hitherto dominated by the AIR, is going to witness a sea-change very shortly. In 2005, the government announced three key policy initiatives which will drive growth in this sector - migration to a revenue share regime, allowing foreign investment into the segment and opening of licenses to private players. As many as 338 licenses are being given out by the Indian government for FM radio channels in 91 big and small towns and cities. This deluge of radio stations will result in rising need for content and professionals. New concepts like satellite, Internet and community radio have also begun to hit the market. Increasingly, radio is making a comeback in the lifestyles of Indians.

Current size of Music industry is $156 million, and projected size by 2010 is $164 million (CAGR: 1%). The industry has been plagued by piracy and had been showing very sluggish growth in the physical format over the last few years, both in India and globally. However, ‘mobile music’ and ‘licensed digital distribution’ services are projected to fuel the recovery of the music industry the world-over. The pace of growth in mobile music reflects the fact that consumers increasingly view their wireless device as an entertainment medium, using those devices to play games and listen to music, while carriers are actively promoting ancillary services such as ringtones to boost average revenue per user. Ringtones currently constitute the dominant component of the mobile music market. Licensed digital distribution services are also contributing significantly to growth in all regions.

Current size of Live entertainment industry is $178 million, and projected size by 2010 is $400 million (CAGR: 18%). This segment of the entertainment industry, also known as event management, is growing at a fast and steady rate. While this industry is still evolving, Indian event managers have clearly demonstrated their capabilities in successfully managing several mega national and international events over the past few years. In fact, event managers are also developing properties around events. The growing number of corporate awards, television and sports events is helping this sector. With rising incomes, people are also spending more on wedding, parties and other personal functions. However, issues like high entertainment taxes in certain states, lack of world-class infrastructure and the unorganised nature of most event management companies continue to hinder growth of this industry.

Current size of Out-of-home advertising is $200 million, projected size by 2010 is $389 million (CAGR: 14%). Outdoor media sites in India are predominantly owned or operated by small, local players and are typically, directly marketed by them to advertisers and advertising agencies. However, this segment too is witnessing a sea-change with technological innovations. Growing billboard advertising is fuelled by technologies such as light-emitting diode (LED) video billboard. This is a segment that is seeing interesting technological innovations across the world and is likely to evolve in India too in the short-term.

Current size of Internet advertising is $22 million, and projected size by 2010 is $167 million (CAGR: 50%). An estimated 28 million Indians are currently hooked on to the Internet. And this rising number is leading to the growth of Internet advertising. The Internet is being used for a variety of reasons, besides work, such as chatting, leisure, doing transactions, writing blogs etc. This offers a huge opportunity to marketers to sell their products. And with broadband becoming increasingly popular, this segment is expected to grow by leaps and bounds.
Thanks FICCI-PWC Study on Indian Entertainment and Media Industry, March 2006

User Revolution: The New Advertising Ecosystem

The advertising world is going through a revolution, called the "User Revolution" as it is happening primarily with the consumers, who are taking control of content consumption and branding. This trend will likely cause a significant rise in prominence of the Internet as a major content consumption and marketing medium. The Internet has increasingly become a principal medium for community, communication, and entertainment, three areas that have collided together and are impacting each other's growth, generating a new type of activity called ‘communitainment’. The Internet has become a mainstream media outlet that now rivals traditional media for reach and advertising dollars. The proliferation of online and offline media outlets has resulted in shrinking television audiences and an increasingly fragmented media landscape. Search continues to gain ground, driven by the rise of search as the New Portal, the increasing use of search in branding campaigns, and the local search opportunity. Google's wide variety of non-search-related products creates a virtuous cycle of brand affinity that drives incremental search volume. Internet video ads could become a game changer for large brand advertisers, who are used to the 15- or 30-second TV commercial. Portals maintain the highest reach, but the fastest growing category of destinations is 'communitainment' sites such as MySpace and Facebook. Ad networks are experiencing increased demand due to increasing Internet fragmentation, desire for more targeted inventory, increasing usage of networks for branding, and increased site visibility. Agencies are rapidly evolving into more sophisticated, technology-savvy entities that combine best of breed offerings.

We are living through pivotal times in the advertising world, which is marked by the end of one era, the golden age of advertising that began after the end of World War II, and the beginning of a new era. This new era can also be termed a golden age, but not necessarily for the advertiser. It is the golden era for consumers, and it is already impacting advertising far more profoundly than any other development over the last 50 years. These changes are driven by User Revolution. Like many major social trends, the changes will not happen overnight, and the User Revolution, which has just begun, may last several years before the new regime is fully established and the old statues have all been toppled. Five-Year Growth Estimates for Internet Advertising is over 20% CAGR. For the Internet sector, the new era is a welcome change as the Internet's most important characteristics, flexibility and user control, are also the hallmarks of the User Revolution. In fact, the Web has been a major instigator of this user uprising. As such, the Internet will assume a premium position in the new regime of media consumption. Global online ad spending, now around $32 billion (in 2006), will exceed $80 billion by 2011. The uprising by the users is over control, control of the type of content users want, control of the place and time content is delivered, control of the advertisements that the users are willing to take, and control of the brands they want to create. Unlike most revolutions, where the masses revolt because of major hardship and grievances, the User Revolution was largely driven by the proliferation of media options, the emergence of the Internet, and the growing sophistication of consumers. In the new era, search will assume an even more central role; the distinction between traditional and new media will disappear; consumers will use an increasing and large number of Websites, TV channels, and other sources; consumers will design their own content and programming, and companies that enable and encourage this will prosper; social networking sites will continue to grow and potentially become the new portals; users will select most products and services they buy based heavily on reviews and ratings (by other users and experts), changing the impact of traditional ways of advertising; video will be the killer app of the Web, supplementing or taking over most other types of content; simplicity, speed, intuitiveness, and usefulness will be the key attributes of the successful media channels; and multi-tasking and multi-channel use will be the norm.
Companies to watch: Google (and YouTube), Yahoo!, Disney, News Corp., Time Warner, Microsoft, InterActive, Facebook, Craigslist, Brightcove, Yelp, SINA Corp., Baidu, aQuantive, ValueClick, 24/7 Media, Netflix , Wikipedia, MobiTV, Digg, and Hakia.
Thanks Piper Jaffray Research, February 2007.

Retailers Open-Up Customer Blogs

E-commerce sites are letting customers post comments, reviews, and even photos, and in the process, finding out a lot about their products. It has been six months since Macy's opened its Web site to customer comments and reviews, and Peter Sachse, the chairman and chief executive of macys.com, regularly finds himself surprised by what the company is learning from its clientele. The site now gets upward of 350 reviews a day, some full of praise, others with serious concerns. "ChicChix" tells other shoe buyers that the Jessica Simpson Ladonna pumps run a half-size small, while "jcamp" says Calvin Klein sheets and duvet covers don't need fabric softeners. "Our site has become like a social network. It's the ultimate word of mouth," says Sachse, whose macys.com is a division of Federated Department Stores. Retailers are taking a page from MySpace. They know that customers, especially the younger and more Net-savvy, want to be heard, and they also want to hear what others like them think. So increasingly, retailers are opening up their Web sites to customers, letting them post product reviews, ratings, and in some cases photos and videos. The result is that customer reviews are emerging as a prime place to visit for online shoppers. Marketing companies have longed for years to have a window on how consumers use their products, in order to develop product innovations and improve marketing. Procter & Gamble (PG), for example, follows mothers for weeks at a time to see how they use Tide detergent and Olay skin-care creams. P&G has even had women strap video cameras to their heads to see what they do moment by moment. Now, as more and more retailers have opened up their sites over the past year, they have been able to listen in on conversations that couldn't even take place before. Customer feedback is opening the eyes of the industry, changing the way they market, manufacture, and merchandise. In one recent example from Macy's, consumers complained that a metal toothbrush holder was rusting countertops. Sachse and his staff took notice, and promptly pulled the item from the site. Customer reviews have long been part of cutting-edge sites like Amazon.com and Netflix, but the practice is spreading dramatically these days to a broader array of retailers. By the end of 2006, 43% of e-commerce sites offered customer reviews and ratings, almost double the 23% figure at the end of 2005, according to New York research firm MarketingSherpa. In a survey of more than 1,300 people, MarketingSherpa also found that as much as 50% of customers aged 18 to 34 have posted a comment or a review on products they have bought or used. "That's substantially more than the 34% who said they have downloaded music files," says Stefan Tornquist, the firm's research director. A huge part of the reason for this success is the confluence of social computing and the success of sites such as FaceBook, MySpace, and YouTube. People obviously love to chat and share details and snapshots of their lives. And customer reviews let folks do just that. What's more, the reviews empower customers to influence how another person sitting in another corner of the world shops. "In the past, people could just share information with their neighbors, but now people can influence the global village by sharing their experiences on the Internet," says Brett Hurt, founder and CEO Austin (Tex.)-based Bazaar Voice, which manages customer reviews for several retailers. The results have taken many retailers by surprise. Take Petco, which operates 800 pet-supply stores nationally. The site launched customer reviews in October, 2005, and within weeks noticed that folks who clicked on the highest customer-rated products were 49% more likely to buy something. And they spend 63% more than shoppers who clicked on options like "top-sellers" or "lowest-priced." Petco also noticed that customers are drawn to top customer-rated pet toys and items, even if they weren't necessarily planning to buy them. "Clearly people trust someone else's opinion that is independent of the manufacturer or the retailer," says John Lazarchic, vice-president of e-commerce at Petco, which soon made the customer-rated feature the default search button at the site. Petco's experience isn't unique. According to a study conducted by eVoc Insights, a customer experience consulting firm, 47% of consumers need to consult reviews before making an online purchase. And 63% of shoppers are more likely to purchase from a site if it has ratings and reviews. One reason that most retailers dragged their feet in letting customers post a comment or a review was fear of negative feedback. But Sucharita Mulpuru, a senior retail analyst at Forrester Research (FORR), found that 80% of all customer reviews on e-commerce sites are positive. What's more, Petco's Lazarchic says negative reviews not only help the retailer quickly address a defect or a poorly manufactured item, they also help decrease the number of returns. "Customers have lofty ideas of what certain expensive products will do for their pets, and if it doesn't meet their need, they return it," says Lazarchic. "But reviews give a realistic view of a product and its attributes, and people are less likely to return if it doesn't meet imaginary expectations." Another concern that slowed retailers from getting into the game: They were worried about hiring the staff to manage the surfeit of reviews and the content. "You do want to see the good, bad, and the ugly out there, but most consumers don't want to see profanity or rants," says Patti Freeman Evans, senior retail analyst at Jupiter Research in New York. In the past 18 months, companies like BazaarVoice and PowerReviews have emerged as leaders among companies that build review functionality for these sites and manage the process for retailers. "These new outfits offer what is essentially plug-and-play," says Evans. Sometimes, the reviews contain small surprises. For years, outdoor fishing and hunting gear retailer Bass Pro Shops has sold a holder that stores a fish hook when you're not fishing. At $3.99 for a pack of four, the XPS hook holder wasn't an item the company heard much about. Then Bass Pro Shops opened its Web site to customer feedback and got dozens of complaints about the product with specific details, including one spot where the hook holder tends to crack and how it barely lasted a week for some buyers. It quickly became the worst-rated product on the site. "It was such an inexpensive item that when it broke, people just didn't bother bringing it back or even telling us about the problem, so we never knew about it," says David Seifert, director of operations at Bass Pro Shops in Springfield, Mo. The manufacturer of the hook holder is now fixing the faulty product and will replace it with a new one this summer. Some online retailers are pushing into MySpace territory. Evogear, which sells snowboards and sports equipment, started letting customers post photos of themselves along with their reviews of the product they were showing off. Now, 25% of the reviews include images. "Once the photos get published on our Web site, customers pass links to their friends, and it takes on its own viral-marketing aspect," says Nathan Decker, director of e-commerce at Seattle-based Evogear. Others, such as Golf Smith, one of the largest golf retailers on the Internet, are in the process of introducing video uploads on their sites, so customers can share their experience with products they buy, à la YouTube. These online reviews are having quite an effect offline, too. Canadian supermarket chain Loblaw, which started gathering online reviews a year ago, is using the Internet customer ratings and reviews for in-store signs. For instance, the store's in-house President's Choice Vegetable Lasagna was one of the highest-rated frozen foods on its Web site. Now, its stores promote the fact that 160 out of 177 customers gave it 4.5 out of 5 stars, and that 90% of the customers would recommend the product to a friend. The sign also quotes a customer's review: "Even my vegetable-hating 17-year-old son enjoyed it." Petco's Lazarchic says that his company's physical stores will also soon show the online customer ratings. "Why should a customer in the actual store be left out of ratings?" he asks. After seeing a 500% increase in click-throughs from e-mail that promoted the ratings, Petco now plans to add them to the Sunday circulars that go out with newspapers. Now that's consumer-generated content at its most influential.
Thanks Pallavi Gogoi, Contributing Writer for BusinessWeek.com.

India - An Undernourished Nation?

The prevalence of underweight among children in India is amongst the highest in the world, and nearly double that of Sub-Saharan Africa. In 1998/99, 47% of children under three were underweight or severely underweight, and a further 26% were mildly underweight such that, in total, underweight afflicted almost three-quarters of Indian children. Levels of malnutrition have declined modestly, with the prevalence of underweight among children under three falling by 11% between 1992/93 and 1998/99. However, this lags far behind that achieved by countries with similar economic growth rates. Undernutrition, both protein-energy malnutrition and micronutrient deficiencies, directly affects many aspects of children’s development. In particular, it retards their physical and cognitive growth and increases susceptibility to infection, further increasing the probability of malnutrition. Child malnutrition is responsible for 22% of India’s burden of disease. Undernutrition also undermines educational attainment, and productivity, with adverse implications for income and economic growth. Most growth retardation occurs by the age of two, and is largely irreversible. Underweight prevalence is higher in rural areas (50%) than in urban areas (38%); higher among girls (48.9%) than among boys (45.5%); higher among scheduled castes (53.2%) and scheduled tribes (56.2%) than among other castes (44.1%); and, although underweight is pervasive throughout the wealth distribution, the prevalence of underweight reaches as high as 60% in the lowest wealth quintile. Moreover, during the 1990s, urban-rural, inter-caste, male-female and inter-quintile inequalities in nutritional status widened. There is also large inter-state variation in the patterns and trends in underweight. In six states, at least one in two children are underweight, namely Maharashtra, Orissa, Bihar, Madhya Pradesh, Uttar Pradesh, and Rajasthan. The four latter states account for more than 43% of all underweight children in India. Moreover, the prevalence in underweight is falling more slowly in the high prevalence states. Finally, the demographic and socioeconomic patterns at the state level do not necessarily mirror those at the national level and nutrition policy should take cognizance of these variations. Undernutrition is concentrated in a relatively small number of districts and villages with a mere 10% of villages and districts accounting for 27-28% of all underweight children, and a quarter of districts and villages accounting for more than half of all underweight children. Micronutrient deficiencies are also widespread in India. More than 75% of preschool children suffer from iron deficiency anemia (IDA) and 57% of preschool children have sub-clinical Vitamin A deficiency (VAD). Iodine deficiency is endemic in 85% of districts. Progress in reducing the prevalence of micronutrient deficiencies in India has been slow. As with underweight, the prevalence of different micronutrient deficiencies varies widely across states. In general, in lowincome agricultural Asian countries, the physical impairment associated with malnutrition is estimated to cost more than 2-3% of GDP per annum - even without considering the long-term productivity losses associated with developmental and cognitive impairment. Iron deficiency in adults has been estimated to decrease productivity by 5-17%, depending on the nature of the work performed. Other data from ten developing countries have shown that the median loss in reduced work capacity associated with anemia during adulthood is equivalent to 0.6% of GDP, while an additional 3.4% of GDP is lost due to the effects on cognitive development attributable to anemia during childhood. Micronutrient deficiencies alone may cost India US$2.5 billion annually, and that the productivity losses (manual work only) from stunting, iodine deficiency and iron deficiency together are responsible for a total productivity loss of almost 3% of GDP. Whether undernutrition is measured as the prevalence of underweight, stunting or wasting, it is clear that the nutritional situation in India is amongst the worst in the world. India’s prevalence of underweight (47%) compares to Bangladesh (48%) and Nepal (48%), but is much higher than all other countries within South Asia and far higher than the averages for other regions of the world. High prevalence combined with India’s large population means that of the 150 million malnourished children aged under five in the world, more than a third live in India. The decline of the prevalence of underweight during the 1990s has also been less rapid than in most other countries with similar socioeconomic or geographical characteristics. Despite an average annual increase in per capita GDP of 5.3%, the average annual prevalence of underweight in India fell at a rate of only 1.5%. In some other countries, underweight prevalence fell by more than 5%, even though annual growth in per capita GDP was around 2% or less. In China, the prevalence of child underweight fell at an annual rate of more than 8%, backed by a 12% annual growth rate. In Bangladesh, despite economic growth that lagged behind that of India, the prevalence of underweight declined at a higher rate (3.5%). Thanks The World Bank, HNP, August 2005.

US - Immigration

The century between 1820 and 1920 defined America as a nation of immigrants or a “melting pot.” During this century, more than 33 million people entered the ports of the United States. Immigrants from Europe came in massive waves until the era of open immigration ended with the passage of the 1921 Emergency Quota Act. By the end of the first three decades of immigration, the census of 1850 finds that almost 10% of Americans was foreign born. The share of the foreign-born population fluctuated around 13-15% between 1860 and 1920, but immigrants and their children represented 30-40% of the white population. With the passage of the Immigration Act of 1965, immigration rose steadily during the last three decades. However, this recent wave of immigration pales in comparison to that of the earlier waves in duration and in terms of the share of aggregate population. By significantly increasing the unskilled to skilled labor endowment ratio, immigration contributed to the growth and spread of factory production in the second industrial period in the U.S. between 1860 and 1920. The form of unskilled technology in manufacturing was embodied in the form of a factory system based on division of labor. Immigration had a significant impact on the shift in manufacturing from artisans to factories. Firms in counties with a significantly higher share of foreign-born population were much more likely to organize as factories than as artisans. The diversity of immigrants also seems to have contributed to the rise of a factory system based on division of labor. In the United States, the factory system of production arose in rural New England between 1820 and 1840 to take advantage of that region’s abundance in unskilled native women and children. However, because the supply of native unskilled workers was limited and too homogenous, the industrial revolution in the Unites States would have been much more muted without immigrants. Immigrants not only significantly increased the unskilled to skilled labor endowment, but they also increased the diversity of skills and worker attributes important for division of labor in factories. In addition, immigration and division of labor significantly contributed to urbanization. What lessons and insights emerge from history for understanding the impact of immigration on the American economy today? The experience of the era of mass immigration points to the great absorptive capacity of the American economy. While immigration may lower the wages of natives in the short run, the long-run impact of immigration is likely to have been much more positive as indicated by the secular rise in long-run real wages. The source of this great absorptive capacity of the American economy lies in its ability to develop and implement technologies which favor changing factor endowment conditions. In addition, history teaches that these induced technological changes have had a major impact on the geographic landscape of the American economy.
Thanks NBER WP 12900

Online Ad Agencies - Challenges

Online ad agencies are an essential partner to advertisers, providing a variety of necessary services including generating creative campaign ideas, managing media buying activities, and facilitating measurement of an ad’s effectiveness. Online ad agencies are likely to witness increased demand in the international markets, and from rising demand for sophisticated and technology intensive rich media, and continued secular growth in online advertising and search. Most of an ad agency’s cost is its people, suggesting limited operating leverage. Traditional offline agency operating margins are between 10% and 20% in the U.S., while margins are usually higher in the international markets. Online ad agencies are facing a shortage of talent, resulting in rapidly increasing labor costs. When the Internet industry experienced a downturn in 2001-02, it triggered an exodus of talent from the interactive advertising industry, leaving experienced personnel in short supply. With the recent growth in online advertising, demand for talent far outstrips supply, driving up the costs for recruiting and retaining talent. The sector is likely to witness increased consolidation due to several factors. Advertisers are becoming increasingly interested in cross-media campaigns and one-stop shop solutions. Recently, publishers like the New York Times (NYT) and Disney (DIS) have combined their ad sales force across all media channels at the request of advertisers. Second, there are scale and business advantages to consolidation. One way to address the labor shortage is to acquire teams of online agency talent. In addition to scaling technology and back office, ad agencies have traditionally diversified risk by moving to a holding company structure. To date, consolidation has already resulted in a scarcity of large independent online ad agency pure plays. Disintermediation and competition look like the Sector’s greatest risks. Internet giants like Google and Yahoo! are increasingly offering automated services for advertisers that could disintermediate similar services provided by online ad service companies. For examples, Google currently provides Google Analytics, broad match function, ROI tracking, campaign tools, and all the technology and services that are often provided by online agencies and technology providers. Competition is another risk as much of value provided by online ad agencies are its people, and the ability to attract, retain, and motivate marketing talent is an ongoing challenge for its players. Top 20 Online Ad Agencies are: Avenue A/Razorfish, Sapient, Digitas, Agency.com, OgilvyInteractive, Grey Interactive, Modem Media, Organic, Tribal DDB, R/GA, AKQA, LeapFrog Online, TMP Worldwide, FCBi, Critical Mass, Digital Impact, Arc Worldwide, Euro RSCG 4D, IconNicholson.
Thanks CIBC World Markets, February 2007.

Internet Video: Credit Suisse Perspective

Internet video has revolutionized TV viewing, and also considerably slowed down the Internet. The proliferation of Internet video is likely to drive demand for bandwidth. Compared to email, documents and mp3 files, a simple video file requires more bandwidth to transmit. As total Internet bandwidth demand continues to grow, industry pricing dynamics and profitability should improve. Level 3 and Equinix are emerging as the leading telecom services providers. Increasing Internet usage per subscriber in a more stable wholesale bandwidth pricing environment presents challenges for cable operators. Specifically, cable faces potential margin pressure/higher capex from increasing backbone costs, in addition to increasing capex requirements in the local loop. As bandwidth consumption grows, peripheral infrastructure will prove insufficient, driving an upgrade cycle in PCs, storage, graphics, displays, MPU power, etc. Although video is perceived to be only a consumer application, the more powerful benefit of video could be in the office environment – vis-à-vis next generation teleconferencing, which is likely to be the next productivity cycle in corporate America. Tech equipment companies like Ciena and Cisco seem well positioned to take advantage from increased network spending. Investments in optical equipment will likely be required to upgrade and build the capacity required to carry the impending wave of video traffic.
Thanks to Credit Suisse Research, February 2007.

Get Rich or Die Tryin

Let me take the pleasure of introducing my dear friend, Rich Hecker, a proverbial entrepreneur by birth. Actually, Rich needs no introduction. He is a fairly well known personality in the digital media circle, having previously co-founded ClickZen Worldwide together with Ruchit Shah, almost seven years ago. Since then, they went separate ways and are currently working together again on an exciting new idea www.mediarfp.com. ClickZen was a boutique ad network that had closed considerable business even in a terrible market. The company was started with just $800 in 2000, and yet managed to close more than a seven figure sales milestone. When ClickZen was founded, both parties were 15 and 16 respectively. MediaRFP is a simple website-based platform connecting buyers and sellers of Internet advertising and advertising-related services with each other via an RFP process. Essentially it is creating a bazaar or flea market for online advertising. Additionally, both advertisers and websites (publishers) can post RFP's for service providers (i.e.Web Design, SEO, Ad Serving). If you think you know enough about Rich, hold on, this is just the beginning. His other baby, http://www.aquamediadirect.com/, is an online interactive advertising company, which Rich co-founded with Tom Doyle, an industry veteran with more than 20 years of sales, marketing and public relations experience. Before joining Aqua Media Direct Tom was CEO of Pivotal Media LLC, a full service sales, public relations, web development, and business consulting company. In the early Internet advertising industry, Tom helped to establish a successful site representation company, Go4Media. Aqua Media Direct hand picks its publishers for their content and audiences, to provide advertisers with pure fluid options for reaching their identified target demographics. Paul Mush is the VP of Sales for Aqua Media Direct. Paul's focus since 1995 has been exclusively on Internet advertising related start-ups. A recent project was creating an online lawyer directory for Nolo Press, the premier consumer legal book publisher. Watch this space for more on Rich and his creative ideas.

Media start-up to launch $300 online product

R Raghavendra TNNBangalore:

If Reuters proved that Wall Street could be covered from Airport Road in Bangalore, a city-based startup is adding a new twist to the outsourcing story. Midola, a publishing outsourcing company, has set out to prove that a global publication along with a strong online presence, can be conceptualised and published in India and sold to subscribers in US and Europe.After buying the title called Global Custody Review (http://www.gcronweb.com/), which catered to the post-trade securities market, from a UKbased publisher in September 2005, entrepreneur Nidhi Devanur (previously from iVega Corporation, Saint Life Bio Pharma) decided to turnaround the product. The goal was to have a global magazine from India. An investment of approximately $700,000, two years, 35 people and four issues later, this company is now set to take its content online for a fee — $300 per year.So far, Midola has spent most of its time generating a database of 10,000 customers in the post-trade securities market across US and Europe. They included people in securities, consultants, analysts, custodians, sub-custodians and leading banks. Last year, it published and shipped four editions of Global Custody Review for free to these prospective customers.The first impact of creating this database came to light when Midola tested its beta version of the online portal in November and December of 2006. “The beta launch gave us customers who were ready to pay $300 for a year long access to the online version of GCR. Two banks in Italy and the Dubai Financial Corporation were among those who signed up,’’ says Devanur.The physical shipping of the product was just a teaser. It was an effort to show what was coming and now the online version (set to be launched this month) is set to bring in the actual moolah for Midola. In the US, it takes about $3.5 to print a book and another $2 to mail it.In India, it takes a dollar each for these tasks. Devanur’s investment so far has been mainly used for printing and mailing these copies as well getting the best worldwide authorities on the subject to participate in the content. In fact, the editorial team extends even in Europe, while a separate 16-member team is going after advertisement and sales efforts abroad.Midola is on the look out for next round of funding to the tune of about $1 million. “We want to launch the portal and capitalize on the changing consumer behaviour pattern from print to online. We intend to launch similar peer-to-peer online properties catering to different industries,’’ says Ravi Srinivas, who spearheads Midola's Planning and Corporate Strategy initiatives.

Thanks to Times of India, Bangalore Edition, 2nd Jan 2007