Tata Sky Plus: End of the 'TV Spot'

We have all seen the Tata Sky plus TV Spot, featuring Aamir Khan and Gul Panag. Tata Sky promises to end the constant fights between husbands and wives over the remote. With Tata Sky plus which is a Digital Video Recorder (DVR) you can Pause a live cricket match, while you answer the phone. Record your favourite action movie, while you let your wife watch her daily soap. Rewind the Prime Minister’s speech and listen to it all over again. Get the power to pause, record and rewind live television. Tata Sky Plus is essentially a premium set-top box with a personal video recorder that allows you to record up to 45 hours of live TV.

But they have not mentioned to you the most important and the “Killer App” of Tata Sky Plus, which is the ability to skip ads.

In markets like the US, the penetration of the DVR is very high. More than 60 percent of people owning a digital set up box, own a DVR and products like TiVO and all these people are watching recorded programs and have their finger on one button which is the ‘Skip’. It is predicted that in the US there will be almost 60 million DVR homes. Which means millions of viewers are already watching recorded shows and skipping ads.

The Indian television industry is largely dependent on advertising revenues and sees very little revenue flowing from cable subscriptions due to the unorganized nature of the cable TV industry in India. However, with products like Tata Sky Plus, the viewers who are sick of watching far too many ads during their favorite shows will be using the Ad Skip button. India is estimated to have a large base, almost 20-30 million digital television users in the next 5 years and it is a safe bet to take that over 50 percent of them will be using some kind of a DVR product. Currently one can buy a DVR for as low as INR 8000 and pay a monthly subscription of Rs 100. However, this is expected to go down more in the future. The bulk of the upper middle class and middle class, people who are the main targets for advertisers will all be using the features.

I have been personally using the Windows Media Center for over three years. The Windows Media Center also allows you to watch TV, record shows and ever since then me and my family only watch recorded TV (of course by skipping all the ads). The only live programs we watch are news and sports events. Even my 4 year old son hates watching his cartoons with Ads and prefers watching recorded versions of Ben 10 and Tom and Jerry while he skips all the booring ads! However I have to admit that setting up the Windows Media Center to work in India is a nightmare only only a Geek like me was successful is using it. Tata Sky Plus makes this truly plug and play.

One thing is clear TV advertisers will be HIT and HIT big time with the SKIP button. Well, the good news really in all these is for alternative advertising mediums like radio, the Internet, mobile, etc. which has not been as developed as advertisers seem to mindlessly spend all their money on TV advertising knowing that the viewers have no other choice but to watch it. But it’s all set to change and advertisers will soon discover that their ads are being skipped and they will be forced to look at other mediums to reach their message to their potential customers.

With Tata Sky Plus all viewers are able to get rid of one important factor – Time Slot. Tata Sky Plus can help draw more audience considering the fact that viewers would be watching the program, doesn’t matter what happens.

Also, very soon, with IPTV being a reality in India, applications like the network DVR where programs are recorded at the service providers data center and streamed to the user live, will again set up a new challenge for the advertisers. Till now you were the passive viewer but very soon you will have all the controls!

Tata Sky Plus is the best thing which has happened to the Indian Television viewer and is also the advertisers worst nightmare coming true…will be interesting to see how the market adapts to this Change.

For now I am going to watch the recorded version of Prison Break on my Windows Media Center.

eBay: Is it the new Palika Bazaar?

The age of the Internet has thrown up some hot topics of discussion that almost always centers on social networking and Web 2.0. Many individuals and businesses are using the power of the internet to expand their horizons, make friends, exchange photos and make a lot of money. However, as we all know, everything good comes with its share of the bad and this new technology is no exception. It has thus, led to newer problems like Cyber Terrorism and other criminal activities. It seems criminals and anti-socials have also realized the power of the Internet and harnessing it to commit, what I call, Crime 2.0

However, I have an important revelation to make! All of us super internet folks and fancy internet companies are to some extent aiding these “bad elements” to flourish. Let me show you how. Let’s start by carrying out a simple search on Ebay.in (and similar sites) for your favorite movies, games, iPhone, mobile phones or laptops and there is a big chance that you will very soon see, not one but multiple deals, offering you these goods at prices far below the market rate and other online sites too. You may also find many products which are not officially launched in India and some products which the manufacturer doesn’t even manufacture!

These are not products which an individual is trying to sell in a “garage sale” but are actually displayed on “Sale” by E-Shops with phony names, created on the site. Try doing a transaction with them and the truth is revealed. Most of these so-called stores are nothing but digital store fronts for operators who sell bootlegged, illegally imported and in many cases, pirated products. Let me share with you my own experience regarding buying on E-bay. Once I had bid on my favorite XBOX 360 game and post winning the bid, which was the cheapest, I was contacted by the seller who told me in no uncertain terms that I am a fool to buy the game for Rs.1,800, when he can mod my XBOX for Rs.750 and provide me a pirated game for Rs. 100. Now that’s a great deal!

This was not my only brush with dicey E-Bay sellers. I was once sold a Fake Samsung TV…. which was a Chinese make with a Samsung Sticker on it. I thank my stars because I knew some people at the site, who contacted the seller and “protected my interest”. Many scheming sellers have also started using similar names of the original manufacturer. For e.g. you can find many phones from “Samsong” when you search for mobile phones in E-bay India, and if you are not extra careful, you might end up with a song - buying a “Samsong” phone instead of Samsung.

The other E-bay scam that is very disconcerting is that of not honoring previous transactions made by a de-registered user. There have been hundreds of complaints regarding cases, where a buyer had paid the full amount but never received the product, only realizing after a few weeks that E-Bay has de-listed the seller. So, now they are in a soup because there is no way they can contact the seller to recover their money.

Delving deeper into the matter, I found out that there were two kinds of buyers - one who is completely unaware of any such activity and believe the genuineness of the so-called shops. They believe that the stuff they are buying is fully legitimate and sports credible online brands. The other group is that of people who are fully aware of what is going on and they opt for the stuff knowing it all. It is from them that I learnt that online auction sites, social networks and groups in Orkut are the new underground street for “street vendors”. These are the same vendors, who previously used to operate in small shops across Mumbai, Delhi etc. Suddenly their market has expanded many folds….

Most of the online sites like Youtube, Orkut, EBay etc. are covered under the DMCA and have programs which help companies take down counterfeit and illegal products and I fully support these initiatives. However, the online sales market for many of the big companies are small and most of them don’t have the time, resources or motivation to have people constantly monitor such instances on the internet. So, the reality remains that these illegal activities continue to thrive on the internet and knowingly or unknowingly we are aiding them to flourish.

I am now extra careful before I click on the BUY button because when I click to buy a Nokia N95, I am not sure whether I am committing myself to buy a genuine Nokia or a Chinese made fake!

Image Credit: Liewcf

Indian multiplexes: The new corn-job!

In India, the mushrooming of multiplexes has changed the dynamics of Bollywood. Production costs are now recovered in days, not months and viewers have accepted the concept. Indian cinema chains like PVR, BIG, Fame, Fun, Cinemax etc. are changing the rules of exhibition in the world’s largest film industry.

These Multiplexes are booming in every metro city (and now from what I hear it will be hitting the suburbs with a vengeance too). It attracts the young crowd with its glitz and glamor.

The average price of a movie ticket is also something on the rise today. On a weekend, a movie ticket will cost you anywhere between Rs.200 to Rs.300 compared to the Rs.50 or Rs.75 which traditional single screen movie theaters charge and the additional cost is well justified. These multiplexes offer you a good air conditioned environment, plush seats and a great movie experience. However, a very important part of the movie experience might have become the biggest problem for your pockets. I am talking about the Pop Corn and Cold Drink combo. I remember my trips to the movie theaters as a kid and eating many packs of Pop Corn with Pepsi, sometimes accompanied with tasty samosas. You could get the Pop Corn for Rs.10 and Samosas for Rs. 8. But all that is history now.

In the modern multiplex scenario, an average Pop Corn pack is Rs. 100 and Pepsi/Coke Rs.50 which is many times higher than their normal market price. I can still understand about restaurants and hotels charging more for stuff because at least you get some service attached to it – but that is hardly applicable in a multiplex – so I really don’t know why I should be paying more? and that too 5 and 10 times more…. These multiplexes also employ a huge security force at the gate they check each and every customer are they are not looking for a weapon they are looking for food . Even if are accompanied with kids or you a diabetic the security guards at the gate in most cases are instructed not to let anyone carry their own food or water. Therefore even if outlets like Big Bazaar sell popcorn at Rs.5 you are forced to shell out many multiples.

Once I mentioned this to a friend of mine who owns one of the leading multiplex chain… his answer was how will they recover all the capex costs and the huge rental costs they pay….. While I completely understood this rational, my key question to him was, when you were planning a Multiplex what was your main business plan? Was it to sell movie tickets or to sell expensive popcorn? Did the investors invest in the company thinking that a bulk of their profits are coming from the sale of popcorn? And if it indeed is true that movie theaters are only making money by selling expensive popcorn and other food items then there is a fundamental flaw in their business model and the movie business in India.

Movie ticket revenues gets divided between the multiplex, movie studio and not to forget the government tax. So typically 35% is govt tax and the balance is divided 60% (Multiplex) 40% (movie studio). However, as most of the multiplexes enjoy a tax holiday from the government, in reality they retain almost 75% of the ticket cost as their revenue. Out of a Rs. 200 ticket they would typically make Rs. 150. As compared to that, the money that you spend on refreshments is much higher at Rs 300 which directly goes to the multiplex pocket that too at a huge margin of almost Rs. 200. It sure looks like selling these refreshment is much more profitable than selling tickets of movies.

I know you are thinking, didn’t the government say that products have to be sold at their MRP price? You are right – the regulation is still in its place, but multiplexes have found a way to dodge that rule and they are doing that very well. Like the other day I wanted to buy a bottle of mineral water at a multiplex. The guy at the counter charged me Rs 25 for the same bottle that is sold outside for Rs 12. When I asked him why that was so, he told me that the bottle was specially made for the multiplex and hence it had a different MRP. And for items like samosas and popcorn, the MRP is determined by the Multiplex. So they were not breaking any rules :-)

Finally, I think movie studios should stop haggling with the government for cutting taxes and stop worrying about hits and flops. If they simply demand a cut from multiplex owners from the sale of popcorn and other refreshments – I think no movie studio will ever lose any money. It’s finally their movie which is driving the crowds to the Multiplex. And if the multiplex owners are really losing money they should increase the ticket rates so that all parties (govt, movie studio) also benefit with the additional revenue.

For now enjoy your movies at your local “Corn Plex” and getting cornned.

Why Wipro, Infosys and TCS are “The Axis of Evil” for Indian startup space

Yes you read it right I am calling this trio and their thousands of offshoots “The Axis of Evil” for Indian Software and Start-up space. While it is well known how these companies started the IT revolution in India with an interesting business model “Body Shopping” and post US clamping on H1 visas “Offshore Outsourcing”. The Indian software outsourcing story started off as a great business of labour arbitrage has today left most of its players scrambling for margins and why?

Because of their own inefficiencies they have created a beast which is now unmanageable. Think about it - the Indian IT employee has got an average salary hike of about 20% year on year which means in the last decade salaries have gone up 5x and attrition is on a all time high. Which means after all the salary hike, free lunch, fancy office buildings and over-pampering of employees, keeping them on “bench” for years?

They have created a new breed of employees which I call the “OutBots“. These OutBots have been programmed not to think and blindly follow a process which is designed not to do a thing in a more efficient way but in a manner than the company can clock the most hours and bill the client without giving the client a feeling that he is taken for a ride.

Ask any of your friends in any of these companies and you would know how they have made an art “how many programmers do you need to replace a light bulb?”

Most of these companies run on a cost plus business model therefore as an investors what you see is that they are always making money and good margin - but you are missing what they have been loosing and the harm they are doing to the country by creating these “OutBots”.
Leaving few exceptions, most of the companies as part of “The Axis of Evil” are happy to build routers & software for large US based companies for a flat hourly rate but dont want to take a slightest amount of risk which could have transformed them into a “UT Starcom”, “Huawei” , “Lenovo” but are happy to remain outsourced partners to “Miscrosoft”, “Nokia” and “GE” who are making billions on the technology which is built by our “Outbots”.

So bad has been the impact on the start-up space that it is difficult for start-ups to hire quality employees as most prefer to be “Outbots” and for the few who do join are constantly lured by other “Outbots” for the referral amount paid by their companies to get more recruits. So bad is the situation that I once had an employee all of 23 years old come to me and said “he wanted to resign because he is putting 10 hrs a day at this job while his other friends are on bench, go to office play table tennis and make more money than him”. I had no words ..

I hope to start a debate on this important issue and would encourage everyone who wants to have the next Google and Facebook to come out of India to spread the word around and increase awareness amongst investors, entrepreneurs, students, shareholders and employees that how the “Outbots” will eventually self-destruct our software services industry and the only way out is to encourage Products, Innovation and fight “The Axis of Evil”.

Think about this - Venture Capital and Start-up investment in the software services space has dried up! Will the SENSEX and NASDAQ follow the same trend?
Share your opinion.
pic:mutantlog