May 24, 2019
Bent on riding the next Internet user wave in a big market like India, global investors are increasingly ramping up their interest in content start-ups scenting an opportunity in a fast growing tech connected world.
For example, in September 2018, Bengaluru based news aggregator platform, Daily Hunt raised US$ 6 million from a New York based hedge fund Falcon Edge. Earlier, in a Series D funding round, they had secured US$ 25 million led by Beijing based Bytedance, along with existing investors Matrix Partners, Sequoia Capital India, Omidyar Network, and Falcon Edge. Daily Hunt, not just offers news and entertainment capsules from newspapers and websites in 13 Indian regional languages, it beams original video content in Hindi and Telugu and a free live television streaming service through strategic partnerships as well.
It is not just Daily Hunt that saw investor interest last year. Factor Daily, a technology news based portal secured US$ 875,00; inFact, a mobile app which aggregates news and infotainment content, raised an undisclosed amount from a Saudi Arabia based angel funder; and in May last year, News Dog, which collates articles in English and various regional Indian languages including Tamil, Telugu and Marathi, received US$50 million in a series-C funding round led by Chinese conglomerate Tencent, along with investors including California-based venture capital firm DHVC, Legend Capital and Dotc United Group.
In a statement released at that time, News Dog, owned by Hong Kong based Hacker Interstellar said that they will use the funding to “enrich localised experience by adding more regional languages” and work towards giving personalised content to its users in India. Since its launch in India in 2016, the app has been striving to capture a slice of the growing news app segment dominated by the likes of Daily Hunt, News Point owned by Times Internet, Tiger Global backed Inshorts, the American Flipboard (which has an India edition) and the apps of leading Indian newspapers.
Online News Audience
It is not surprising that content platforms offering news are picking up momentum since Indians spend a significant number of hours online. According to a Nielsen survey report, Indians spend 4x times online than offline. And, an annual report by analytics company, App Annie states that they download more apps than even the Americans. In fact, in 2017, Indians downloaded 12.1 billion apps on their phones and tablets compared to 11.3 billion in the US.
Studies say that Indians spend a lot of their time online watching videos, music, shopping, on social networks and playing games etc. News consumption online has also spiked however. For example, there has been a 40% growth in digital news consumers in 2018 from 2017, says A Billion Screens of Opportunity, March 2019, EY and FICCI report on India’s Media & Entertainment sector.
So, in 2018, while 325 million people viewed videos online, 245 million people consumed news online across mobile and desktop news sites, portals and aggregators. The report, which lists the top ten news apps of 2018 as Twitter, Daily Hunt, Times of India, Inshorts, UC News, Economic times, NDTV, Flipboard, Google News and Weather and The Hindu, reveals Indians are also spending more time reading news and magazines.
Domination of Regional languages and Customised Content
To counter competition in this rapidly growing segment, content start-ups have been tailoring content to lure Indian-language Internet users. After all, nine out of every 10 new Internet users in India are likely to be Indian language users, says a 2017 KPMG-Google Report, and expects this cohort to grow at a CAGR of 18% reaching 536 million by 2021, compared to an English language user base growing at 3%.
Of late, as regional news and entertainment gains traction, there has been a surge in hyperlocal news apps funded by venture capital firms (VCs) such as LocalPlay, Lokal, Awaaz, and Circle, says The Mint. LocalPlay is focused only on Moradabad, Circle gives news about Agra, Mathura, Vrindavan; Lokal focuses on three districts across Telangana and Andhra Pradesh; while Awaaz is focused across Uttar Pradesh. All are non-English and primarily use video snippets, a format that regional language users seem to prefer.
Customisation is another hook content start-ups use to bring in users. When News Republic, a global news aggregator site with 1,200 content partnerships ranging from BBC, CNN to India Today, Hindustan Times and The New Indian Express, announced its launch in 2015 in India, they promised “customized content” to its readers.
Daily Hunt too launched a new product Newzly this year, a news excerpts mobile application that provides customised trending headlines in nine languages. It claims that its machine learning technologies enables smart curation of content and tracks user preferences to deliver real time personalised content. Innovations are the name of the game for these start-ups. For example, News Dog’s new offering WeMedia enables users to submit content. Offering racy entertainment videos and posts, this app has adopted blockchain technology to incentivize user for referring. Inshorts, an app which offers news summaries in short 60 word formats acquired Retention.ai, a data analytics start-up that help app developers to analyse user behaviour.
The Potential for News Apps
No doubt there is huge potential for news apps in the Indian market, what with falling data prices and cheaper handsets. And, a large millennial generation keen to consume news on the go. At present, all these apps are free as companies look to monetise their business with advertisements.
Take the case of Inshorts, which according to media reports, posted their first ad on their platform in July 2016 and started monetisation with brands like Airtel, Omega, and Audi. In 2018, the Delhi-based start-up claims to have over 100 advertising partners on board and has been operationally profitable from last quarter of 2017.
Started by IITians, in 2015, Inshorts raised US$3.57 million in a Series A round from Tiger Global and Rebright Partners and US$18.14 million in Series B round led by Tiger Global.
It is a challenge for content apps to convert user interest into sustainable business models, with Indian marketers still drawn to traditional media like newspapers and TV.
Deploying algorithms to understand user behaviour, sourcing regional content in video formats, adding innovative offerings to attract users, news apps in India are aggressively pushing user base and increasing high engagement levels to bring in advertisers.