2024: The Year of Niches, Mergers, and Rules

Good morning! As long-time subscribers of The Signal would know, in the last week of December we produce special editions capturing the year gone past. This year, we launched our weekly newsletter, The Impression, which keeps a keen eye on the business of media, entertainment, and the creator economy. Today, we bring you a special edition capturing what The Impression observed and wrote in 2023 and what might be in store in 2024. Plus, five must-listen podcasts we produced this year and, to keep you updated for the day, The Signal FYI—news you should know today. 

Programming note: This week we will publish special editions capturing the major events of 2023 that we covered in our weekly newsletters. Also a peek into what we expect in 2024. The regular edition of The Signal and The Signal Daily will return on January 3. 

The hardest part about writing about the media and entertainment business is that I, too, am a part of it. It’s also the reason why you won’t see very detailed reporting on the sector; journalists in particular have a blind spot for business models that directly affect their jobs. It’s harder still when you’re asked to write a recap of the year gone by and—even worse—offer predictions on where things are headed. 

In the last two editions, we ran through a recap of the stories and themes The Impression covered in the year gone by. In this special edition to close the year, here are my predictions on five themes in the business of media, entertainment, and content. As my colleague Roshni always says: hound me at the end of next year if these don’t come true.

Niches are cool 

This year, we explored how creators and platforms are investing in lucrative niches in content. US-based platform Crunchyroll is betting on a deep craze for anime in India to bring shows dubbed and subtitled in Indian languages. Streaming platforms like Discovery+ and Netflix are spending money to create true crime documentaries (with a dash of drama) for a maturing Indian audience. We’re also seeing creator monetisation platforms racing to profitability on the back of X-rated creators who tantalise their (largely male) audience into private chats and meetings. 

Next year onwards, we’ll see these and other niches grow into sizable businesses supporting mid-scale streaming platforms. Already, relatively niche platforms like DocuBay and Mubi are cultivating a particular consumer base: a documentary filmmaker tells me DocuBay is investing heavily in original true crime and other documentaries, while Mubi has been bringing critically-acclaimed and cult titles to India on its platform, apart from distributing critic favourites like Priscilla in theatres. 

Caveat: niches are cool, but the platforms hosting them may not survive on their own. I believe we will see more specialised platforms like Mubi and Crunchyroll cracking more bundling deals with larger players such as Amazon Prime Video and Tata Play for better reach. 

Ads are coming

I’m putting my neck out a little bit, but I’ll still go with it: by this time next year, Netflix will have introduced its ad tier to India. 

Amazon Prime Video has already begun clubbing all its video offerings, including the ad-supported miniTV, into one Prime Video platform. Subscriptions don’t have much more room to grow, and an ongoing consumer economy slowdown means few non-premium users will fork over hundreds of rupees a month to watch their favourite shows. Besides, now that JioCinema and Hotstar are racing to the bottom with free cricket, the one IP that could pull subscription revenue is already gone. 

Netflix is among the most expensive streaming services available in India and its slate of originals is aimed at a more premium, urban audience. But it’s already making a move to mass entertainment. It has snagged the streaming rights of some of the biggest box office hits this year including Animal and Jawan. Netflix has also signed up comedian Kapil Sharma to host a comedy show on the lines of Comedy Night With Kapil, which has long been one of Sony TV’s most-watched shows. This is precisely the sort of content that advertisers flock to. 

As Netflix joins the ads party, streaming will become a bigger threat to Google and Meta’s duopoly over Indian digital advertising; it’s already facing a threat from the rise of e-commerce ads, led by Amazon. 

Merger madness

We’re about to see more consolidation across streaming, news, social media, and other media and entertainment businesses in India. The global advertising market is going to be soft and largely sustained by election spending. Just last week, there was yet another round of layoffs at the Times Group and at ShareChat, which is in the process of raising funds.  

All eyes will be on two mega-mergers: Reliance’s purchase of Disney India and Sony India’s long-pending merger with Zee Entertainment. The latter, now on its last deadline extension, is likely to be dead in the water. Remember, Reliance was once interested in buying Zee but walked away from the deal. Without a deal in place, Sony and Zee will be left to battle the combined might of Reliance and Star in TV, sports, film, and streaming. We may see both parties explore other merger options, perhaps with regional media empires instead. 

Social media moolah

The battle for attention on social media has been reduced to short video, but that race is cooling off now. Instagram is a clear leader while YouTube figures out how to balance short and long-form videos on its algorithm. Homegrown short-video apps are nowhere near the race; the one possible contender was ShareChat-Moj but the company has been firing people and is finally raising funds, but at a fraction of its previous valuation.  

In the absence of any innovation in what constitutes ‘social media’, I believe we will see more homegrown TikTok copycats shut down next year. Or, to chase profits, they may shift focus to more X-rated content, a sure-fire way to attract paying customers. Last June, Chingari rubbished reports that said the app had pivoted to adult content after a failed flirtation with cryptocurrencies and NFTs. 

We may see more wild pivots as Indian apps struggle for relevance and a moat. And those who can’t pivot will probably perish. There is only so much money investors will pump into a lost cause, especially in a funding winter. 

Who’s afraid of regulation? 

All these predictions are only frivolous in the face of the biggest threat to India’s media and entertainment industry: sweeping regulations. It’s clear now that the government wants complete control over platforms that host content. 

It is still accepting suggestions on a draft Broadcast Bill that proposes mini-Censor Boards for all streaming platforms. However, last week, it passed a new Telecom Bill without any debate as most members of the Opposition were suspended on flimsy grounds or not present. The bill is vague enough that Big Tech firms are worried about overt government control; already, Meta India’s policy head has alerted the company that the government might have granular control over individual messages on apps such as WhatsApp under undefined terms laid out in the new bill. This primer by the Internet Freedom Foundation breaks down all the problems in the legislation in great detail. 

It’s too much to expect that Big Tech firms such as Google, Meta, Amazon, and Netflix will quit India altogether. The Indian market is too large to ignore and perhaps that is precisely what the government is betting on. But if the internet comes under centralised control where user privacy and freedom of speech are no longer guaranteed, it will fundamentally change the business of media & entertainment in India. 

The outcome of the 2024 general elections will determine what that future will be. 

For Your Ears Only

This year we kicked-off a new podcast series on tech news and policy: TechTonic Shift, hosted by our very own Rajneil Kamath and Roshni Nair. In this series, we have bantered and deliberated over 20 episodes on how the world of tech is changing and us with it. 

With over 30k hits on Spotify and more than 2,500 followers, you have let us know that you have loved this podcast series. And so, we’ll be back with a second season next year. Until then, here are some of our and your favourite TechTonic Shift episodes.

Are Finfluencers Done For?

Financial literacy is an important skill to have for better savings, budgeting, and financial goals, yet only 27% of the Indian population is financially literate.

Enter financial influencers or ‘finfluencers’. Since the pandemic, finfluencers have become all the rage among the younger generation, which turns to social media for financial advice.

But there are concerns about the possible dangers posed by unregulated financial influencers who provide biased or deceptive guidance.

Recently, the SEBI proposed some regulations to oversee finfluencers. Will it affect their businesses? 

The Evolution of Dating Apps

Tinder, formerly Matchbox, gave unto the world the right swipe and left swipe. And modern dating hasn’t been the same since. According to Business Of Apps, over 300 million people worldwide use dating apps, which have proliferated in the hundreds. 

As the likes of dating conglomerate Match Group and its niche counterparts prioritise engagement over trust and safety, we indulge in some crystal ball gazing in this episode and discuss where hookups, companionship, and love may be headed. 

Can India Overtake China in High-Tech Manufacturing?

China’s loss is India’s gain. Or so the latter would hope. 

India is eyeing an opportunity as tech firms look to diversify beyond China. It’s leaving no stone unturned in courting everyone from contract manufacturing giants (Foxconn) to EV companies (Tesla). But the question is: can India dominate the global supply chain for high-end, precision, and emerging technologies?

The Autopilot Monster

Elon Musk made a big bet on autopilot cars and he really needs them to work. So far, his claims are just that: claims.

Self-driving cars have been a longtime fascination for automakers who want to eliminate "human error" from driving. Many years and billions of dollars in investments later, we are nowhere close to Level 5 or Complete Automation. In this episode, we ask if we should even have fully autonomous vehicles.

Season Finale: 2023 Tech Wrap

Lastly, if you haven’t been following TechTonic Shift, our season finale wraps up the biggest tech developments this year. 

AI is a no-brainer, yes, but sweeping changes have also taken place in the realms of social media, space tech and ride-hailing. Find out what they are in this episode.

In tomorrow’s edition: The best of The Signal Daily podcast.

FYI

Adding muscle: Billionaire Gautam Adani and his family will pump in ₹9,350 crore (~$1.12 billion) into Adani Green Energy to pay off debt and raise its renewables capacity to 45 GW by 2030.

Easing up: Market regulator Sebi may change its rules to allow infrastructure, venture capital, angel, and other alternative investment funds to pledge shares of investee companies.

Big carrot: Intel Corp will get a $3.2 billion grant from the Israel government to build a $25 billion semiconductor plant, which will be the biggest industrial investment by a company in the country.

Desert home: Indians bought properties worth $335 million in Dubai in the first six months of 2023. They had invested $541 million in 2022.

The pot’s swollen: Indian mutual funds now manage assets worth more than ₹50 lakh crore (~$601 billion).

Colour the biryani white: Saffron, the spice widely used in Indian sweets and dishes, will be in short supply and likely become expensive. Harvest in its largest producer, Iran, has halved due to climate change.  

Snapped up: Pharma giant AstraZeneca will acquire Shanghai-based cell therapy developer Gracell Biotechnologies for ~$1.2 billion.

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