With today’s youth growing up watching videos on small, portable screens, an over-the-top company based in Silicon Valley is creating content tailored to this new market.
The so-called screenagers prefer how-to instructions in video format instead of lengthy text, for example, according to Nickhil Jakatdar, the CEO and co-founder of Vuclip Inc.
Speaking at the 3rd Indonesia Economic Forum (IEF) at Shangri-La Hotel Jakarta on November 15, 2016, with IEF founder Shoeb Kagda, he said these screenagers learn almost everything by watching videos.
“If they want to find out about something, they go to YouTube, unlike the older generation that would go to Google,” he added.
“That is another reason why video creation has a lot of potential now.”
Nickhil founded Vuclip in 2007 with other colleagues in Silicon Valley with the aim of “democratizing access to video for consumers in emerging markets.” In 2015, the company launched Viu, an over-the-top service provider with multi-language subtitling.
When he migrated to the US to earn his doctoral degree, he had no intention of becoming an entrepreneur. But when you are in Silicon Valley, Nickhil said all he heard was “startup this, startup that and you get sucked into it”.
He eventually started his own company even before he finished his PhD. By 2007, he exited from three companies he had founded, including a semiconductor chip manufacturing software, and thought of starting one that is more consumer-related.
Having grown up in India, he said the one thing that was always part of him were movies. While in the US, he noticed how consumers watch movies and videos online through high-speed broadband networks.
This prompted him to ask how he can bring that experience to consumers in emerging markets, to ask why would anybody care about mobile and video in emerging markets.
Nine years later, things have changed a lot.
Nickhil said there are two very clear consumer groups: the 80 percent at the bottom of the pyramid, and the higher-end consumers at the top.
Those at the bottom aren’t that sophisticated and savvy, don’t have high affordability, have lower-range smartphones, and worry about the costs of data. At the other end, you have consumers who have affordability, higher end smartphones, and Wi-Fi access, and they don’t worry about data consumption.
Nickhil said the company came up with very different solutions for these two demographics, and made available to them Asian content they can consume on demand.
Indonesia, he said, blew away their expectations since Vuclip was launched here in June.
“Indonesia has been one of the most amazing markets from our point of view,” he said, adding that the challenge in Indonesia is not the same as in other emerging markets, because it requires more local content.
In terms of the business model, he said it was also challenging because Indonesian consumers, just like Indians, liked things free. Of course, there are also data cost and connectivity challenges.
Despite all this, demand from Indonesia skyrocketed, particularly for Korean content.
The company cooperates with broadcasters in other Asian countries such as Japan, South Korea or China. As soon as the programs are broadcasted in their home countries, Viu would get them in real time, add subtitles, and then make them immediately available to consumers. This eliminates the need to go to sites that allow access to pirated content.
A program broadcasted at 10pm in Korea and would be uploaded on Viu by 2 a.m. Indonesia time, ready for Indonesian viewers when they wake up.
But Nickhil said their data shows consumers don’t wait until the morning – they access the content as soon as it is ready at 2 a.m. because “people are so loyal to the content.”
With such a huge response from Indonesia, can Indonesians play a part in the Viu story beyond mere consumers?
Nickhil said Vuclip believes in localizing the experience.
A local team in Jakarta “is focused on a few aspects that they don’t believe can be done in anywhere else, for example content program,” he said, adding that finding out what would be interesting to Indonesian consumers means physically being in the market.
“We also create content, not just license content, and it has to be done in the local market,” Nickhil said.
Globally, the market is four billion strong, according to Nickhil. While only about 20 percent is on data plans for now, this will grow dramatically to about two billion people.
Most consumers will still not pay, though, so Nickhil said videos have to be on a freemium model.
Nickhil said Vuclip has gone after a differentiated model instead of one-size-fits-all content, particularly in India, where it competes with 33 over-the-top players.
“It allows us to live in harmony with players with different content focus,” he concluded.