Luking Up at Couch Potatoes like Mouse Potatoes

Pratima H

MUMBAI, INDIA: Everyone likes a bundle. It draws in a smile when you pack a pair of shoes with matching socks, or when you wrap a book and a pretty-looking book-torch together. When you put a pair of chopsticks with a fork –well,  that, however, is a recipe that draws wrinkled eyebrows.

Most of us have been happily nursing the perception that the second screen is coming up as a formidable adversary to the first screen we love as TV. Internet is changing content's DNA and skin and also making life tougher for broadcasters and advertisers who have to suddenly tune into a four-second attention-span generation. But more than that, it is weaning away viewers from big screens to small, personal, or shall we say personalized screens. If TV was about people together on a couch, then some furniture is certainly being re-arranged after the onslaught of mobiles and Internet. Why then, would someone bundle two apparently rival-form factors together?

Lukup recently launched what it terms - India's first on demand TV service which is powered by a connected device- the Lukup Player- and aims to transform conventional TV viewing for Indian audiences. Prior to Lukup Media, its CEO interestingly, has managed Aumega Networks, a company that developed and sold products in the sensor based home and industrial networking, and supply chain management applications.

We caught up with Kallol Borah who is also an alumnus of the London School of Economics, to understand why or why not is this as radical an idea as it appears on the surface, and what cascading effects might be expected on the conventional TV mediums, on-demand content, STB market, advertising measurements, second-screen’s potential, and more pieces that surround that much-adored box in many Indian homes.

What is it exactly that you are offering and why is it an exciting proposition?

Lukup Media was set up in 2010 to challenge the way content is delivered and consumed on a range of devices like mobile phones, televisions and connected devices. The first version of the product which is an OTT (Over-The-Top) platform was launched in September 2014 & the next version with the Television & Broadband bundled together would be launched by June 2015. The company works with content providers and last mile networks to deliver its service that also brings a host of new entertainment channels to India. It is an Internet-cum-TV bundle-infrastructure play which entails on-demand content instead of broadcast content. The device helps to deliver content to TVs, music systems, laptops etc and addresses the STB (Set-Top-Box) plus broadband segment.

Why should it matter to viewers?

Using the Lukup TV service, viewers can get access to a large number of TV channels in addition to those available on cable and DTH  (Direct-To-Home) platforms. These additional TV channels will have content from multiple genres including movies, shows, lifestyle and sports. Users can also stream content on more than one screen or device – TV screens, tablets, mobile phones, and wireless speakers - at any one time. The service includes unlimited recording capacity starting from 500 GB which can be upgraded without limit. Users can also download content on their mobile devices which they can access offline. With no minimum monthly subscription charges, users can pay per view.

Is on-demand entertainment taking off well in an otherwise conventionally-inclined market like India? Are you happy with the state of ecosystem here?

The space has incidentally got so many companies and so many business models out there. There are content aggregators like Netflix and there are OTT players. But lack of video content penetration in India stays, specially in tier-2 cities and beyond where Internet is a limiting factor. Content is always the key. TV is moving from broadcast to On-demand and even in India many channels like Fox are going this route, and tapping Internet platforms. It is a trend which is now picking up here, even as it is well-developed outside India. The network itself and the state of infrastructure say a lot. Imagine while 75 per cent people have TVs, only ten percent have a fixed line connection. This is where we are trying to fill the last-mile gap.

Does it intersect with IoT (Internet of Things) anywhere?

Yes, IoT is a buzzword today. We are exploring what other devices we can connect to and right now the topic is relevant because our focus on security and control is extreme.

The industry recently made a big shift from cable era to STB era. Is the timing right for a mix-offering? Would the network and operator market look at it openly enough?

Four years back we had analog TVs and now people have embraced so many changes. As far as the cable operator segment is concerned, copper fibre was a predominant factor and customer on an average paid, Rs.150 for 100 channels. After the government brought in digitization, there were some 500 channels beaming. The number of channels has gone up. Migration from copper to fibre network infrastructure also happened since it gave more capacity and data components to cable. The customer is paying Rs. 250 a month and the ARPU (Average Revenue Per User) of the operator has not significantly changed. We are signing up with operators and giving them the idea of opportunities that on-demand content brings forth and how it changes their earning potential. The new model gives about five times more than the operator is earning now and still, for the customer, the proposition of having a bundled Internet with TV (30 GB bandwidth for Rs. 990) is far valuable and at price-points still lower than what would be spent if s/he paid for these separately. In fact affordability is our major objective and we are on our way to achieve good numbers.

Will it also help making TRP/ad-measurement more precise and pervasive?

So far these areas worked one-way. In our case, there is the part about two-way communication so measurement improves a lot. You can include many parameters like reach, frequency etc and more. We may come out with a complete dashboard of audience measurement system in some time.

Does it allow for more customer choice on content?

Content, interestingly, is not just TV content. This will mean content that is also not available in India generally. There is a dearth of good content for Indian viewers because most advertisers do not pay for it. That will change too. We are partnering with over 50 content providers and aim to bring fresh content from inside and outside India, and across multiple genres.

Are you not worried about the Mobile vs. TV war?

It is a hot topic of debate I agree. The second screen is not a competitor. Our player is a multi-screen device which can deliver for many devices including the TV or phone. As a service provider, content can be streamed on laptops or music systems or a second TV via Bluetooth or on Mobile by selecting Lukup as network option. The big picture is that network infrastructure companies like us need to make the right investments and produce returns. There is not one VC in this exact space in India, while there are umpteen VCs funding players on Internet platforms (like those e-commerce or taxi-app portals). Yet, there is no one who wants to put their money and time on building the groundwork in India. It is a hard job.

How new is what you are trying to bring to the market? And how easy?

In India there is no device that gives Internet and TV at the same time. Both packed as one is quite a new offering. Educating people about this very ‘new’ part is a challenge and will take some time. Internet has a very low penetration in India so it is a ripe opportunity.

How well is the potential you see translating into numbers?

Aiming to reach viewers across India, Lukup is tying up with over 100 cable operators and the service is set to reach 7,50,000 viewers across the country. The company’s initiative of bringing premium on-demand content to consumers at affordable rates is on course and there is a total available installed base of 1.8 million homes in India of which 1000 units have been covered so far and plans are to touch 3 lakh units next year and 55 cities in two years. Through our tie-up with more than 250 last mile networks, we have access to 1.8 million homes across India. Our projected subscriber base is a minimum 300,000 homes this year across four cities we are operational in now and four more cities we will launch this year. Over 300 units have been sold to consumers and a total of 1000 units have been shipped to hospitality major and retail chains.