Indian Mobile Entertainment Industry Set to Boom

The mobile entertainment industry in India will be worth $4.9bn (£3bn) in 2015, up from $1.2bn in 2009, growing at a CAGR (Compound Annual Growth Rate) of 26 per cent, according to new research from the analyst, Tavess.

The research firm notes that increased commoditization of voice services, with rapidly declining voice tariffs, is resulting in diminishing voice ARPU for Indian mobile operators. To address this challenge, and to earn additional revenues from existing customers, Indian mobile operators are increasing their focus on data services, primarily entertainment services such as mobile music, gaming and video/TV.

Mobile music is the most popular entertainment service among Indian consumers, with ringback tones and ringtones the most popular services, followed by single track music downloads. Mobile operators are placing great emphasis on music streaming services, with players such as Vodafone, Reliance, and Idea offering music streaming at very affordable prices. Vodafone, for example, offers subscription-based music streaming services for INR 50 ($1.09) per month. This provides subscribers with access to its music station, with 40,000 songs, and 30 music channels in nine languages.

Similarly, handset manufacturers are making moves to tap the opportunity presented by the Indian digital music market. Nokia has launched its Ovi music store for Nokia handset owners. This is focused on providing localized content to users, offering Indian users a choice of 3.5m tracks.

Gaming on mobile phones is also gaining traction, with leading Indian gaming companies, such as Zapak, ibibo, and Indiagames launching mobile gaming, providing users with access to multiple games, incorporating social networking functionality.

Handset makers are also tapping into this market, launching sophisticated handsets with advanced gaming functionality. Tavess expects greater adoption of multi-player mobile games, along with growth in 3D and “mythological” games.

With the launch of 3G services, the mobile TV and video landscape in India is also witnessing rapid changes. Tavess believes that India has good future potential for mobile video streaming services, especially for videos focused on cricket highlights and updates, in addition to film-based content. However, as many subscribers are not accustomed to paid, subscription-based services, the monetization of video content will be primarily through advertisements. Tavess also expects greater adoption of mobile TV, with users preferring to watch television on mobile while on the move.

In the past few years, Indian telecom operators have been focusing on localization of entertainment services, offering video, music, and gaming content in several regional languages, with regional flavour. Further, realizing the potential of market and culturally-relevant content and services, the operators have started offering a plethora of services, such as social networking, matrimonial services, astrology, mobile radio, religious chants, comic strips, and are focusing on demographically-targeted services (e.g. dedicated service launches for the younger and older demographics). While these initiatives set the platform for growth, says Tavess, it is important for all the players to continuously invest in launching new and innovative data services to keep the momentum up and gain competitive edge.

Tavess believes that mobile entertainment has huge potential in India, and that the current localization of mobile entertainment content is driving the industry in the right direction, bringing in greater usability of content. In the coming years, the mobile entertainment landscape will see several changes with respect to greater integration of mobile entertainment services with social networking; increased significance of user generated content, which will be a major focus area for telecom operators; and the growth of infotainment services. Tavess also expects a rise in mobile advertising programs focused on providing credits to users for watching ads. Mobile music will, however, continue to dominate the mobile entertainment services landscape,  with significant growth potential presented by mobile video and TV.