3G Auctions: Impact on Video Content

The 3G Auction bids have crossed 60k crores. The value of a pan-India license is above $2.5bi now. It has been fascinating to observe the auction so far. I am hoping that the process will go forward and we will have 3G services being rolled out by the end of the year.

A key question that emerges is what makes a telecom company offer a $2.5bi to $3bi bid for a pan-India license. Are they over-bidding especially if the data usage scenario does not take off? What will be the services telecom companies will offer to ensure a high data usage and recover their cost+profits?

Clearly 3G is not about voice. It is also not about SMS. These services are well established in the 2G/2.5G stack and may not see much of growth in the 3G scenario. Sure, there will be significant growth in enterprise mobility solutions as workers get better connected to their IT systems. There will also be growth in messaging applications. However, the biggest growth expected is in new entertainment, educational and information solutions over 3G data connectivity to the consumer segment.

We at Movico continue to believe that video consumption on the phone will grow multiple times as 3G data services take hold. The power of videos to excite, inspire, educate, communicate and entertain is unmatched.  This will lead to a surge in demand for video content that can be made available anytime, anywhere to consumers. From morning prayers to evening night-club live streaming, a variety of video consumption patterns will emerge. Think of television growing by a factor of 1000 – the consumer could be in for a very hard time deciding what to watch!

Content owners will be well advised to start preparing unique clips and videos for the demand surge. Do you have a funny video? A wildlife rare shot? A local religious event? A rural fair? A lecture? An opinion? All of this will find a new market – outside of broadcasting and the web – the mobile phone. Video content will be distributed by the Telcos, the aggregators, web-portals, handset companies and just about anyone who does brochures and flyers today.

What does it take? Content owners should identify their top holdings – say 100 to 200 hours of premium footage that they own. Digitize it and build a library with metadata and quick extraction and manipulation tools. This will give them a pool of 5000 to 10000 clips that can be promoted to those who are looking for content – telecom companies, handset companies, online video companies, advertisers etc. Building a web-catalog with some preview and search capability would be a great advantage.

The visionary folks are already doing this. Stay tuned for updates on this soon.

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