MOVED !

No more synopses for my new posts, these shall feature exclusively on the Wordpress blog in use now.

http://marketerskaleidoscope.com.

This applies to today's blog post on mobile broadband subscribers too, please see above blog.

- Rohit

New post : remembering Drucker

This post is now up at the Wordpress blog http://marketerskaleidoscope.com

India's affluent : findings from a recent survey

Nielsen India's done it's first ever survey of the affluent. An analysis at my new blog.

India's oral care market : Star #1 meets Brand #1

Shah Rukh Khan's been signed up for Colgate. An analysis on this and on the oral care products market at the new blog .

In India, broadband's growing

That's the new post for today. Go check this out at my new blog address.

Thanks for visiting !

- Rohit

The Internet juggernaut rolls on - VI

Some new websites that will be of great convenience to the public, covered at the new Marketer's Kaleidoscope blog on the Wordpress platform...

India's dental health market

This new post is on the challenges consumer marketers face in growing the Indian market, with special reference to the challenge Colgate faces. This is now hosted at my Wordpress blog. Do pay that blog a visit & subscribe !

Since I am moving to Wordpress, this Blogspot blog shall henceforth carry one line synopses of each new post...

In Transition

Have been working on moving this Marketer's Kaleidoscope blog to the Wordpress platform. And this has taken longer than expected. Time put in on this transfer has been well spent : it's been a gr8 learning experience. But it's also kept me away from putting up any new post of late.

The 'new' blog (check it out) is still a Work-In-Progress. This new Wordpress platform promises to be more feature-rich. Among other things, it allows very many plug-ins and a choice of a few thousand themes. It is I believe going to eventually make for a richer reading experience.

The look and feel still needs some improvement, and that's going to entail my learning some CSS ! Let's hope I can get this done this weekend.

And there will probably be other improvements and necessary actions needed too.

Till the new blog matures then, dear reader, as the saying goes, "I crave your indulgence" :-)

D-I-Y Advertising

"Papa, papa, why does the moon advertise ?"

- a quote I heard many years ago (probably has no deep significance, I just like it :-)

Here's a look at advertising. Advertising is the lifeblood of the two industries tracked on this blog viz. consumer industries (advertising here generates the demand) and consumer Internet (advertising here also generates the revenue) :

When people first advertised, and one doesn’t know when that was, it is but axiomatic that they did it all – strategy, creative, media planning, placement, whatever ! - themselves. Then, nearly a 150 years ago, aided by the industrial revolution and newspapers as a mass medium*, came the advertising industry and the ad agencies. Today, if one is a corporation and wants to advertise, one usually employs an ad agency and spends a fair bit of money.

In India, there are about 80 odd accredited agencies (84 as per the AAAI and 79 listed in Business World’s The Marketing Whitebook 2009-2010). Each agency typically services a few dozen clients. Thus this ecosystem supports say, just a couple of thousand players. The largest ad monitoring service, TAM, monitors just 600 brands on print and TV. These are the regular advertisers.

The number of organizations in India who have ever advertised is several times larger. These number an estimated 38,000 odd for TV and over 314,000 odd for print (both from the latest weekly TAM report ).

These organizations, I am informed by friends in advertising, usually do not get serviced by agencies. Instead they go direct with the respective newspaper / TV channel. For ad creative, they use freelancers or the publication itself. It is the only a few thousand odd companies who have a full-time ad agency.

Separately, there are 13 million plus small enterprises (really small actually, on an average they employ just 3 people each) in India. In addition, I hazard that a large % of households have at least one self-employed or would-be self-employed person. These self-employed are on the constant lookout for opportunity e.g. a teacher looking for students for tution classes.

Each of these small enterprises and individuals is a potential advertiser. The current advertising option available to these enterprises and individuals is to run classifieds and occasionally run display advertising in the local newspaper.

Online is taking a good ‘share of wallet’ of these small advertisers and of the local advertising market. Data on India is not available, and I take a look at some US ad and global ad market trends instead and extrapolate:

Facebook: Facebook’s been quoted as saying that their revenue for the current year will exceed $500 million. This is believed to include over $300 million ad revenue. And the lion’s share of this advertising, by one estimate 74%, is actually local. This means that Facebook is turning out to be a local ad platform. This is unlike My Space, which was skewed towards large advertisers.

Considering that Facebook launched their ad platform only in Nov 2007, this is good progress. The local ad market in the U.S. is $150 billion, so there is a good upside possible here.

Now, advertising on Facebook is simple. One needs a credit or debit card and little else. There are value-additions possible in terms of audience targeting, pricing options and performance tracking, similar to what is generally available elsewhere online. Further, in some locations, the classifieds service (local newspaper) has a cheque pickup facility; often, in other locations, it does not. No such concern or delay when you pay online.

Thus, online advertising has several benefits over classified advertising in the local newspaper.

This is Do-It-Yourself advertising; it works well for very small and for neophyte advertisers. Here, the Internet has added real value.

In addition to paid advertising, Facebook allows and encourages the creation of pages, these then can be promoted free (virally) or by paid advertising.

Google: Google Adwords has over a million and a half advertisers ; they spend on an average about $16K a year each. Once again, the vast majority are small advertisers who can get started with a credit card or other payment options.

In addition to text ads, one can use Adwords’ 'display builder' tool to create display ads. Or,one can put up one’s own display ads.

Craigslist: Craigslist runs over 30 million ads a month . These are mostly free. This is a really simple, possibly the simplest possible local advertising option.

What’s caused the above DIY ad services to succeed? Facebook and Craigslist benefit by having a community, the user has comfort in placing the ad. Google of course benefits thanks to it's pioneering search service.

To sum up, Do-It-Yourself advertising is something that is uniquely Web. It serves to expand the number of advertisers (long tail).And more advertisers instrinsically mean more stable revenue for the sites.

All sites do not have this self-serve option. Yahoo India does not have a DIY advertising option, Rediff’s Local Ads (earlier P4C ads) product has not quite scaled, there seem to be some bugs here. Having a successful DIY advertising product may be key to building a stable revenue base.

* as narrated in the book 'Adland : A Global History of Advertising' by Mark Tungate, Kogan Page Publishers, 2008.

Growing the Internet Market : What's the Big Deal ??

“ The economies of the last century were driven by railway connections, the economies of today are largely driven by the Internet and other ICT (Information and Communication Technology) links.”

– President Mwai Kibaki of Kenya, speaking a few days ago at the laying of East Africa’s first broadband cable line, connecting this region to Europe and India.

Why the big fuss about maximizing Internet users and usage? After all, among developing nations like India or Kenya, there are other areas for development e.g. roads, electricity, schools, hospitals and telecom. Which is true. All I wish is that Internet should figure actively among these top development priorities.

The Net is not just email, search, shopping, dating, social networking, portals, advertising revenues, IPOs and the like, or a poor investment, which at times the media has made it out to be.

It is now society’s most powerful tool for 'advancement'.

Consider:

A. During my travels around the country (more a few years ago than now, I admit) trying to popularize the Internet, I have found the desire to use the Net the keenest among the disadvantaged sections of society e.g. I found teenaged girls in small town Uttar Pradesh to be avid visitors of cybercafés.

B. Politically suppressed Iran now has more avid tweeters than perhaps most countries; Twitter has kept the ferment for reform in Iran, alive.

C. In China, which at 338 million users and counting is the world’s biggest Internet market, there is widespread usage of news and blogging. 79% of all Net users use it for News: this is the second most used Net application, behind music which has 84% users.

And there are more bloggers by far in China than in any other country, with 54% of all Net users i.e. 162 million blogging!

And China is still witnessing an explosive growth in Net users. Here is the latest available report.

It would appear that in a country with acute news censorship and propaganda, the Internet plays a major role. Media such as China Central Television (and I would imagine radio and press) are State controlled monopolies. Individuals can best inform themselves and voice themselves via the Net? Do we dare predict that it is the Internet that will one day willy nilly catalyze political change in the world’s largest non-democracy.

D. In Kenya, the laying of the new broadband link (see pic above) will, it is said, open up the door for it - and for other neighbouring countries - to join the BPO boom , creating jobs in economies which sorely needed (and posing competition to India’s call centre industry).

E. The Government of India has announced, in this year’s Union Budget, the setting up of an online employment exchange. India has just 8 million organized sector jobs, most people are in the unorganized sector.

F. Another recent announcement - that did not get sufficient attention - is the government’s intention to provide Internet marketing support to the country’s micro, small & medium enterprises sector. There are estimated to be 13 million such units, they employ 42 million people and account for 45% of the country’s industrial output. Online marketing can help them significantly, some players have been at it already, but there is much that can be done.

G. ITC’s E-choupal has placed 6,500 Internet kiosks across 40,000 villages, benefiting a potential 4 million farmers. These give information on crop prices, access to markets, weather patterns and farming knowhow, leading to improvements among small and marginal farmers - that would have been otherwise impossible. This is the world’s largest ‘rural digital infrastructure’, says the company.

Then there are other companies that have installed rural Internet kiosks for other (non-agri) purposes, e.g. Comat for e-governance.

H. This year, for the first time, online application was mandatory to admissions to colleges in Mumbai city. Nearly 200,000 graduating high school students have just submitted their admission applications online.

Till last year, prospective students hopped from college to college to first pick up and then drop by (submit) the applications. At about 5 colleges per applicant and 2 trips per college, this year that’s 2 million trips saved!

That’s the power of the Internet. And that’s what just one (admissions) website can do.

There is a humungous diversity of uses to which the Internet can be put. Agriculture, e-governance, recruitment, outsourcing, small business, college admissions and political change are some of these, as the above random examples show.

An economist would say that the Internet has high ‘social utility’. A rupee of investment here has a high multiplier effect.

See also previous posts on 'Growing the Internet Market' :

An Agenda to Grow the Indian Internet Market

More on an agenda to grow the Indian Internet Market

More on the Agenda to grow the Indian Internet market

In the last post ( at blog http://marketerskaleidoscope.blogspot.com, this is fyi for those following the Facebook feed) on July 11th, five actions (not exhaustive, it’s my pick) were suggested to grow the Indian Internet market :

1. Internet association IAMAI should join hands with other organizations and individuals
2. Studies that put a socio-economic value to the Net will help immensely
3. Talent needs to be developed
4. Adoption of Indian languages is the key bottleneck
5. It’s possible to identify “compelling applications”

There was some interest in that post, motivating this update.

Let me dig deeper into actions 1,2 and 4 above. Once again, I largely ignore the possible upsides from the mobile Internet (an area of which I know as yet little). This post is thus about Internet via the PC.

1. On IAMAI joining hands with other bodies

Last week the PC manufacturer’s association MAIT has gone ahead and published it’s own numbers on Internet use, numbers which are in variance with those of Internet association IAMAI.

There are, says the MAIT report, 8.6 million Internet “entities” and 60 million Internet users. (No definition is available on what qualifies as a user, appears to be closer to what the Internet industry would call “ever used”, rather than “active user”).

These vary from the IAMAI & TRAI estimates, not to mention those of others. ISP & telecom regulator TRAI’s Internet subscriber numbers are 12.85 million for Mar ’09. And the IAMAI had estimated 42 million active urban Internet users for Sep ’08. (Given the 20% p.a. growth being experienced - I had given 50 million as the current number).

To be fair to MAIT, their study is primarily a PC & IT hardware numbers study and Internet user numbers are only an add-on.

What stops the IAMAI and MAIT from talking to each other and putting out one set of numbers? Multiplicities of numbers dilute the seriousness with which the Internet sector is taken.

MAIT’s press release that put out the above numbers also made the following astonishing claim, and I quote: “MAIT has set for itself an ambitious target, 'Goal 511', 500 million internet user, 100 million broadband connection and 100 million connected devices by 2012.” No specifics of how this miracle is likely to be achieved, though there is a brief allusion to 3G and WiMax network rollouts.

Ironically, both IAMAI and MAIT use the same market agency IMRB but have different numbers, both of which enter the public domain...

2. Studies that put a socio-economic value to the Internet

We have probably all heard of the multiplier effect telecom is supposed to have on a nation’s economy. There is a correlation between telecom density and GDP growth, it is said.

You would have also heard of the stories about the fisherwoman (or is it the vegetable farmers?) who became rich once she got her first cellphone.

As regards the Internet, stories that have appeared with higher frequency are stories of dotcom IPOs (just 2 in India’s 13 year old industry so far, one on the NASDAQ and one on the BSE), of entrepreneurs could got or nearly got funding, robust ad prospects of this sector, etc.

There is one study though. This is by TRAI dated November 2003 and another 2003 study by CII. These were the studies which first made the case for Internet and broadband expansion in India. The CII study said (and I paraphrase) :

“Ubiquitous broadband is expected to create - between 2010 and 2020 - 1.8 million direct & 59 million indirect jobs, as well as create an increase in National Output (GDP) of $90 billion, calculated at PV (Present Value) in 2003 prices. Benefits are seen in improvement in productivity of the existing labour force ($47 out of above $90 billion), e-education at vocational and higher secondary level (worth $27 billion) and e-literacy programs in secondary schools (the balance $14 billion).

10 million urban broadband connections should be targeted by 2010 as well as 100,000 villages connected by Internet kiosks.

All broadband connected villages can enable

(i) the benefit of virtual primary, secondary & adult literacy and distance education through the kiosks,

(ii) e-health viz. each village kiosk acts as a telemedicine centre
(iii) every urban and rural connection acts as a single window Government interface for e-governance.
(iv) Entertainment and e-commerce services and employment opportunities will become available as well through broadband connectivity to all cities, towns and villages in India.

The total investments for achieving these milestones is summarized in the exhibit 4 of the report as $5.35 billion of which $2 billion were to be for content alone, $500 million was earmarked for rural infrastructure with the balance for urban infrastructure.”

If these old studies are updated and others presented it will revitalize interest in investments by government and private sector, interest seems to have taken a beating because the Internet sector is seen as one that has failed.

For example, it was recently reported that the Government is planning to spend Rs. 40,000 crores (INR 400 billion) to deliver services like the Unique ID number, healthcare, municipal services and some services from Indian Post. If this is indeed true, we will need an ubiquitous and robust Internet infrastructure first. Someone – it could be one of the IT biggies or Nasscom - needs to put a number and make a ‘must have’ case for this.

We now also need a Nandan Nilekani-type appointment to champion the creation of this infrastructure.

4. Language adoption is the key bottleneck

Also in the last post, two interesting numbers were ‘thrown into the ring’: 20 and 205. 205 million is the number of urban literates. And 20 million is the number of people who can actually converse in English, out of 86 million odd who claim to ‘know English’.

If we look (IMRB, Mar ’08) at the number of ever used Internet users (50 million), these are fewer than PC users (72 million), which in turn are fewer than the number of English ‘literates’ (86 million). And English speakers are growing much slower than the number of PC literates and Internet users.

This could be the key bottleneck in the growth in PC and Internet usage.

Did a quick (am no expert) check and learnt:

a. What’s needed for language use are keyboards (hardware), fonts and scripts (software) and content.

b. No one is talking much of external keyboards anymore, they don’t seem to be readily available.

c. As regards fonts and scripts - after years of work thereof - Windows now support most Indian languages. However, a friend of mine, who has been an IT infrastructure manager for over a dozen years - admittedly in big metro Mumbai - has himself never seen a PC being sold with it’s OS pre-configured with any Indian language.

d. Microsoft could have shaped the language agenda. They seem to have been at it for a long, long time, without a breakthrough in the market. Their site on language computing does not seem to have been updated since 2006, leading one to believe this is not something actively engaging their attention.

e. Over and above the OS, there are several applications available that claim to ease the convenience of giving a language input on a PC, these are typically transliteration tools aimed to help (say) the English Internet user send an email to his granny in the village. They don’t address the language requirement per se.

f. There also seem to have been some sincere government initiatives. But these have been on for at least ten years ,in fact earlier ever since the 80’s, when PCs came into being.

g. Multiple softwares and the lack of a dominant player mean that there are no standards in existence. We are stuck at the PC bottleneck (software & hardware) end itself, not at the content end.

h. With none of the major PC manufacturers on to the language trail, the marketing thrust to popularize languages is missing.

i. It’s believed by many that we Indians prefer English per se for PC or work related use, and our own languages don’t stand a chance. Why turn the clock back, the world is going English, they say. Fair enough, but in a large country like India, this is going to take generations. It’s taken 2 years for the number of ‘English-knowing’ adults to grow from 77 million (2006) to 86 million (2008).

The company I work for is also into English education, so this is something I know a bit about. There is and will remain a big unfulfilled gap between demand and supply of English, both in schools and in teaching institutes. We can’t bypass language use if we want to progress.

j. The great Google doesn’t have an answer to this one yet, either. When Shailesh Rao, Google India’s head was asked a couple of months ago about the Indian language Internet, he seemed to duck the question and started talking about the mobile.

Shailesh believes there are 35 million people with a functional command of English (I have been touting 20 million, matters not, both are lower than the number of claimed English knowing people of 86 million and under 20% of India’s urban population).

The future does look bleak for the balance 1000 million + Indians, their not knowing English may deprive them of the joys of using a PC and the Internet the way you and I know! "Let's give the poor guys the Internet via a mobile phone" is the refrain.

I don’t quite understand the absence of success in developing languages for PCs and Internet. Other countries have all popularized their own. This is preventing the (bottom-up) generation of mass demand for Internet services. This is the choke point.

An Agenda to grow the Indian Internet market

This (somewhat lengthy !) post will be of interest to well-wishers of the Indian Internet industry. We will arrive at five things to do by and for the industry.

A. Growing the Internet user base has been a key thrust area for the Indian Internet industry.

Internet firms today derive their revenues primarily from advertising, and they believe online ad market revenues correlate with the overall number of (Internet) users. And these user numbers for the Indian market have, as I wrote in this blog in Oct 2007 as well, been growing at just about 20% a year.

Estimates of the current Internet user base vary. The most reliable numbers are those from IMRB, India’s well-known research agency, see summary graph here. By this measure we seem to be at about 50 million active users (active = used Internet at last once a month, the globally accepted definition).

The same graph also shows growth in Internet subscribers, as given by TRAI. The IMRB and TRAI numbers serve as a proxy validation for each other.

The industry believes this user base is rather small in absolute (Internet penetration versus other countries) and in relative terms (mobile users have grown over 8 times faster). Notwithstanding this, by one estimate, India is today the world’s 4^th largest Internet market (after China, U.S. and Japan).

The Internet ad revenues themselves have been growing at a fair pace - by one estimate they today constitute 5.4% (Rs. 5 billion) of the total ad market, and will grow at 44% in the current year. But this is clearly not enough to satisfy every Internet player’s aspirations, the lion’s share goes to 2-3 (Google with Yahoo a distant second) of the hundreds of players. Hence the industry’s clamour to grow the user base.

B. Recommendations to grow the user base were recently tabled at a Keynote at the 5^th Digital Marketing Conference of industry association IAMAI.

IAMAI is the Internet and Mobile Association of India.

Recommendations that were given at this keynote address, being taken here as a proxy for what the industry believes, are not new. Some look correct in principle, but will be tough to implement.

These recommendations include:

1. Government needs to play a catalytic role by
- boosting the broadband subscriber base (TRAI recommendations of year 2004)
- provide support to ISPs

- Encouraging the cybercafés business
- encouraging debit cards for e-commerce
- enable easy funding for start-ups
- and (this is new and important) reserve part of upcoming 3G spectrum allocation for data (not voice alone)
2 Indian languages need to get a boost on the Net
3 Mobile operators need to play ball with content providers by giving higher share of the VAS revenues to them and by not moving into content themselves,
etc.

Various questions arise related to the above. In this post, we concern ourselves with just two :

1. Is the government likely to do something at all? Who will bell the cat? Is the IAMAI well suited for this?

2. The above wish list is rather long, if one were to prioritize, what would these priorities be?

C. Roadmap to grow the Indian Internet Market (5 suggestions)

1. Join hands

The tasks before the industry is huge. The IAMAI does not have a history of lobbying the government, nor do it’s members itself have much experience in government affairs.

Other associations like MAIT, the PC manufacturers association and the ISP Association ISPAI as also software association NASSCOM itself, have been at government lobbying longer. Internet growth will benefit them too. An organization like TIE has clout. Then there are start-up associations like Proto.in.

IAMAI would do well to ally with one or more such experienced bodies to move the government faster.

At times, some of the causes IAMAI champions seem rather small, fiscal measures, not on any big visionary thrust.

IAMAI’s seven founder members are in fact the country’s leading portals, who derive their revenue from advertising. IAMAI remains essentially rooted to it’s desire to grow industry revenue, rather than grow the Internet market. It’s power structure as well as it’s membership is still skewed in favour of media (read ad-revenue) firms.

An Internet association should have thousands of members, individuals included, not just a few dozen firms as is the case currently. The Internet is a public good (no different from water or roads) and too big and important to be represented by just one Association, no matter how well-meaning. E-governance, for example.

2. Understand the full value of the Net
We need organizations and professionals who can educate, nay form public opinion about the benefits of Internet use; preferably with empirical data from research studies.

The Internet can make a mammoth socio-economic contribution, giving a high return on investments made in it’s infrastructure. The above studies can establish the viability of government and financial institution funding for the Internet sector in the Indian context.

The government recently announced in the Union Budget that it would set up an online employment exchange for the country. The tragedy is that Internet access itself is restricted.

3. Develop talent for the industry.

There is a crying shortage of good web designers, trained product managers and Internet marketers. I work at a company which is a big player in informal education and we do provide certificate courses in web design, but neither we nor our competitors have kept pace with the fast changing knowledge. No university or college degrees or diplomas exist in the Internet field. These occupations are outside the province of IT companies and ad agencies as well. And all this in a field that advances by the day.

There are but few Seminars or events regarding Internet which provide great learning value. (The Bar Camps and the like are infrequent and of uneven quality). The ones which exist are often pure media events designed to cash in on the Internet hype (“Web 2.0”) and/or are “plugs” for a select group of industry captains. Silicon Valley is 10,000 miles away, where does a professional renew oneself?

A few digital firms as well as IAMAI have begun with Internet Marketing courses, but on the design and product side there is still a vacuum. Without good people, compelling applications and great user-experiences cannot be provided, and the Internet market will not take off.

The space is ripe for entrepreneurs to move in?

4. Language, language, language

Online content in Indian languages has been created over the years, but these sites failed to get traction. This is because today’s PCs do not support language OS and language keyboards are not in common use, so current PC users, ;eave alone Net users, are only those comfortable with English.

There is evidence that the No.1 factor stalling the growth of the Internet is language. If one looks at two numbers, viz. the number of computer-literates (as presented in the annual Internet market surveys of the IMRB) and “English knowing individuals over the age of 12”, there has over the years been a good correlation. These numbers are currently 72 million computer-literate (IMRB 2008) and 86 million

English-knowing individuals count is obtained from the National Readership Survey (NRS). I remember reading elsewhere that only 20 million Indians can really speak English. This comes as no surprise to me. When a few years ago I ran Rediffmail, Rediff.com’s email service which then had 35 million registered service, much of the customer mail I received was in abysmal English.

In effect, of 205 million literates in urban India, only 20 million have reasonable English-skills. The Indian PC & Internet industry has not yet marketed the right product for 90% of the urban population! It’s no use complaining about the lack of vernacular web content, let’s get the average user started first in Word & Excel in Hindi or Tamil.

A further discussion of what’s gone wrong regarding popularization of local PC hardware, software and web content requires a separate post.

However, it’s worth noting that India is perhaps the only country in the world where a local language (say Hindi) is not the lingua franca at the workplace. There is an inadequate push for the adoption of non-English PCs and mobile devices. This is a situation unique to India, which we need to break out of.

Separately, apparently, Hindi is the world’s third largest spoken language, after Mandarin and English, with about half a billion speakers !

5 . Compelling web applications
The Indian Internet companies and entrepreneurs themselves have a role to play by introducing compelling applications. What exactly is a compelling application ? How can an entrepreneur be sure he has one? This is a subject fit for a follow-on post.

(A declaration : I was, as Chief Marketing Officer for Rediff.com, involved in tracking and pondering on the growth of the Indian Internet market during 1999-2005 . I helped IMRB kickstart their annual Internet market surveys in '99. Was also briefly on the Government Sub-Committee of the IAMAI in 2004-05 ).

The Indian air & rail travel market

Most posts at this blog have been about the value-addition online is bringing to our world.

However, the bigger underlying story this blog was begun with is the Great Opportunity the Indian market offers. And online has been presented as one important enabler to realize this Great Opportunity, given the poor offline infrastructure that prevails.

This post itself is about the sheer potential of the Indian travel market. Some interesting facts on the air & train travel market :

Air travel market

Capt. Gopinath of Air Deccan-fame informs us :

• The number of air tickets sold in India has grown 4 fold in 5 years, from 13 million in 2004 to 50 million currently. This, in a country of over 1000 million.
• In contrast, in Ireland, a country of 5 million, 25 million tickets are sold a year. That's a clear 100x per capita consumption on a country to country basis.
• In Malaysia, in a country of 25 million, 15 million fly. This is probably the same number flying in India, a country over 40 times the size.
• In the United States, 40,000 flights take off every day, in India the corresponding number is less than a thousand.
• The U.S. has 18,000 airports, India has about a hundred,etc.

In short, while in India the aviation sector has of late grown by over 25% p.a., it is still a vastly unserved market, lagging behind other countries in terms of per capita use by about two orders of magnitude.

Unfortunately, despite these long-term prospects, the aviation sector is currently in the doldrums.

Rail travel market

The Hindustan Times of today has the following interesting stats about rail travel in the country. Did you know :

• 8,984 passenger trains are in operation each day
• These trains carry 15 million people a day
• Mumbai city itself runs 2606 suburban trains
• These suburban trains carry 7.5 million passengers
• Thus, Mumbai city alone runs 29 % of the country's train services and carries 50% of the train passengers !
• The average journey distance nationally in 2007-08 was 102 km
• The average journey distance nationally in '08-09 was 117 km, an increase of 15% (an unusually large number bears closer examination) over the previous year.
• The total number of train passengers in '08-09 at 6.97 billion, was 6.3% more than in the previous year, an impressive number considering the large base.
• Passenger segments which are witnessing big growth are :

- farm labour travelling from Bihar to the Punjab

- Students travelling from some northern States to Pune, Bangalore,Hyderabad & Chennai

- great increase in outbound traffic from NorthEast (due to increased rail infrastructure)

Urbanisation i.e. migration is the biggest long-term factor causing increased rail travel. The Railways also believe demand will continue to grow manifold in coming years.

If we look at air & rail travel - together, as above - India is 'on the move'.

The (online) future of books in India

It would appear most media is moving digital, with music being just one of the first to be impacted. Consider books.

1. The emerging market for e-books.

There is a buzz around e-books. They will, it is said, be a key manner by which books are read. It may take a while for the format to succeeed, but succeed it will.

EReaders are convenient to carry and use devices that enable users to browse from an e-book catalog, and download quickly the chosen e-book over the air (preferably with 3G). The device acts as a personal library, enabling a large number of e-books to be stored. The reading display mimics that of a printed book.

Amazon's Kindle, the most successful eReader, has energized the category. One of the biggest things going for it vis-a-vis it's competitors is access to Amazon.com's catalog : it currently offers over 300,000 e-books. The larger-format Kindle DX was also launched recently, it's likely to suit newspapers and textbooks.

The Kindle costs $349 and is not available in India and even if it were, Amazon would need local partnerships for content,mobile,etc.

2. E-books may lead to a change in reading behaviours

E-books will lead to impulse buying (no need to visit the store or wait for and expand the market (number of titles read per year) for reading.

Here is one take on how e-books will change the way we read. Popular science writer Steven Johnson's writes in an Op-ed in WSJ on how e-books will change the way we read and write . : E-books will change the "reading experience" i.e.. what it means to read a book, he says. For example :

- Since their content has been scanned, every word of these books will be searchable.

- While reading an e-book, the reader could jump to another book through hypertext. This will lead to impulse reading , impulse book buys and distractions in completing reading the book in hand.

- Booklogs (blogs on e-books) will appear, as also online global book clubs.

- Chapter I of a book will be free. Readers will have the option of paying by chapter.

Google has separately won the rights to sell e-books online.The above books corpus, possibly the world's largest, will give them a lot of clout.

3. Proven success of mobile e-books

eReaders & e-books are available for phones too. There is ereader.com (a Barnes & Noble venture) & Mobipocket for Blackberry, Palm, Windows Mobile & Symbian platforms, among others.

And iPhone has several ereader apps, they seem to be doing well. The most successful isStanza, with over a million downloads to date. iPhone also has 'eReader' and 'Kindle for iPhones' apps.

4. Google & Apple

Over the years, various organizations have sought to digitize books. The hottest project currently is Google's Book Search. Google claimed in October 2008 to have digitized 7 million books. They are getting digitized books that are available in the public domain (chiefly old books for which copyright has expired and for which they have signed on libraries as partners); they have also made 20,000 publishers their partners for books in copyright.

This Book Search project aims to scan all known - an estimated - 10 million books available in the world's libraries. Google plans to monetize book searches through ads as well as earn money through charging publishers for each "book preview".

It's also anticipated that by year-end Google will launch it's own e-books business, competing with Amazon. Among the expected e-books entrants is also Apple : possibly via it's iTablet.

The entry of such big players will further grow the market.

Here are highlights from a recent Forrester report on the eReader ecosystem.It says the market is coming out of it's early adopter phase and that - long-term - China and India will play a key role in driving up volumes.

5. The Indian books market

India's books market is not mature. Consider :

1. Book stores in India are few. Leading chains have at best 10-50 stores each. Crosswords has 52 stores, English Book Depot’s got 36 stores in 25 cities and premium store Landmark has 10 stores in 8 cities. Certainly not enough for a country of over 1100 million and over 5,000 towns.

2. While Landmark claims to stock just 100, 000 titles, the average corner bookstore has a much smaller collection.

3. Books are deemed expensive. Few get to any large circulation numbers.

4. There are virtually no public libraries.

5. One can order books from Amazon.com, but the shipment takes 3 weeks, not to mention the shipping cost.

6. Perhaps 70,000 - 80,000 books are published in the country each year, across 18 odd languages.

7. There is a large market for textbooks.

To conclude : Let's get e-books into India

The introduction of e-books can help improve the low consumption and poor availability of books in India. It requires :

- the introduction of an eReader device or a mobile eReader led ecosystem

- content partnerships with the likes of an Amazon.com (for international titles) and key Indian publishers

- partnerships with mobile operators, ISPs, satellite TV players et al

A worthwhile project for a digital / new media company with vision and king-size ambition !

More on online music downloads

Further to my previous post about the poor choices for online music downloads that confront the Indian consumer :

The American music market is home to considerable digital innovation. On one hand, the music industry, having seen the inexorable move to the online future, has been open to cultivating new online services (over and beyond iTunes and the others that exist). On the other hand, music sites themselves, many of whom were so far trying to offer music free and make money via advertising, have realized that they need revenue sources other than ads.

Thus, new services and new models are being launched all the time. These help expand and invigorate the U.S. online music market.

Imeem lets users stream songs, thus serves as a site for users to discover new or great music.It further serves as a social media site for music, thus helping the music companies promote it.

Lala let users listen once to a song for free, then stream it repeatedly at 10 c each or download it at 99 c each.

Napster (now a Best Buy service) has reduced it's monthly subscription to $5 a month down from $ 12.95 a month. 

No music download service in India yet !

We all “consume” books, newspapers & magazines, music, movies and DVDs. Life would be unimaginable without these. 

These media have for some time now been moving online. These are indeed eminently ‘digitizable’ and will therefore, in the years to come get impacted significantly by the Net.  

Let’s look at music.  

Music is now more online than any of the above media under discussion. One can indeed download most music online. That at least is the perception.

However. In India, music is not quite available online, not legally that is.

Consider:

I listen to FM Radio (local Mumbai stations) as well as Worldspace Radio (satellite) very often. Very often, there’s a tune that I like and wish to listen to again. My current wishlist, comprising Hindi movie songs, English songs and others, numbers 50 odd titles. These songs span across 30 odd albums : I certainly don’t want to buy CDs. Doing so will burn a not inconsiderable hole in my pocket. Not to mention the possible difficulty in getting all these albums from any one store at any one time. 

In short, I need to download these 50 songs. Onto my iPod. Ideally, legally. Where can I do this? There are no music download / subscription services in India.

Consider: 

Ø      The iTunes Store for India, opened up only recently, has mainly music apps. It does not have individual Hindi or other Indian music titles available. The available apps are compatible only with an iPhone or an iPod Touch, my Nano will not do.

Ø      There are no other music subscription services in India either - unlike in the States (where in addition to iTunes there are Napster, Amazon, Rhapsody, Zune,  eMusic, Walmart and others, each boasting millions of music titles and rich features and with the per song download options at or near 99c per song and some with monthly subscription services).  

Ø      Specifically, none of the Indian music labels have their music available for  download online. Saregama, which boasts of an archive of 25,000 titles, has an antiquated “create your own CD” type of service.

Ø      One has to look for a “less than legal” option. And here, Limewire, the # 1 P2P download service, now seems to save songs only in the protected WMA file format. This format prevents the songs them from being copied onto iTunes.

Ø      About 5 years ago, I was involved in launching a music subscription service for Rediff.com viz. Rediff Radio. The service was aimed at the overseas Indian (NRI market). Things didn’t work out. In particular, the stiff terms and conditions imposed by the Indian music industry – associations PPL & IPRS - made the viability of the service a non-starter and Rediff.com was unable recover it’s costs.

Interestingly, the iTunes store for India too seems to offer only streaming music (radio) services for a bundled subscription price (sold as different apps).

The music industry in India has had a myopic approach, looking to earn royalties and prevent piracy but doing little to create an online download service. As seen above, only an a la carte download or subscription service can meet consumer needs.

The focus however has been on protecting the turf. Nor have the dealings of these bodies covered them with any glory, a less than savory reputation exists. Else one would have had an online music service by now.
 
Maybe, in the future, biggies like a Nokia, Airtel, Vodaphone or even Apple or Reliance’s Big may well be able to strike a deal with the music industry, their business models.

Till then one has to perforce use sites like search engine Guruji.com . This site has launched a music search service that claims to “link to” 400,000 Indian songs. Seems to be borrowing a leaf out of China search engine leader Baidu, where a similar music search service is the killer app.

Each music search leads to several (need it be said) less than legal mp3 sites. Guess it’s only a matter of time before the music industry guys move against them.

It would have been much better if they had backed or promoted one or more legal download sites in the first place.   

The Internet juggernaut rolls on - V

Nowithstanding one belief that a vast majority of Internet applications are yet to be "invented," the fact of the matter is Internet has been mainstream for over a decade old. We thus run the danger that new developments here won't make news. For example, usage of the Net for politics (cf. my last post on Obama), is a done thing now, we have reams being written about this even in the Indian media and I am afraid that it will all soon draw a yawn from the readers.

In recent days, however, I have been surprised by two news stories on the Net. 

1. The first was a story last week in the daily Mint that Malappuram in North Kerala State  is now the first district in India where at least one person in each household is Net savvy. Many households have at least one family member in the Gulf, with whom emails and chat is used to keep in touch. Note that India's Internet penetration as a whole is barely 5% (~ 50 mio users in a 1000 mio+ population).

The catalyst was the government's Akshaya Project launched in Aug '02 to make the populace e-literate. There are 289 Akshaya kiosks too and electricity, phone and other bill payments are being done online. The users include a fair number of purdah-clad women, this being a Muslim-dominated district.

2. The other is a story in Newsweek on a couple - Rhonda, 39, who lives in California and Paul,43, who lives in Wales - who have "met" and fallen in love on Second Life. No, this by itself is not what's unusual, there are other people who have found romance on Second Life : 43,000 is the number of such couples who have so far got "married." And there are by itself interesting aspects to Rhonda and Paul's story. 

What's unusual is the conclusion : that online is actually making possible genuine relationships. The conventional wisdom was that online relationships are risky and that love cannot flourish unless two people have met first in the flesh. Fake profiles and protection of kids and teenagers from perverts, for example, were in the news.

Unlike in the real world where a mutual attraction is likely at first sight, in online it usually grows only over time. The distance apparently makes candor possible, couples share much more information about themselves than they would in real life. This may lead to an emotional bonding !

Worldwide, 1.6 billion of 2 billion Internet users in 2011 are expected to have used some virtual world or the other.Separately, there are 800 dating sites in the U.S. and 10% of Internet users currently look for love online. The Internet is also having an incredible ability in allowing people to self-sort i.e find and engage like-minded others, it's said. And given that people have very different personalities and tastes, this can indeed be useful.     

 

Obama and the Internet

Am back after a nearly four month hiatus. An unpardonably long break for a blogger, no denying that. And the first new post is on the growing influence of the Net on public opinion, on politics in particular.

That President Obama used the Net for his campaign and is a Blackberry-lover is  well-known.  Actually, history could well record that there are at least three separate initiatives that Obama took early on that happened to stimulate the growth and usage of the Internet. These are :

1. His campaign made the Internet the “killer app” towards getting elected

Firstly, by raising significant money for the campaign:

Barack Obama was the first presidential candidate to forego using public funds. A public financing system for U.S. Presidential candidates was set up after the Watergate scandal, which is financed by tax payers who voluntarily allow $3 of their taxes given to the Presidential Election Campaign Fund. Thus, McCain who used federal funds could spend only up to $84 million in months of Sep and Oct while Obama who chose to go privately funded raised $150 mio in Sep alone. This enabled him to buy half hour prime-time spots on several TV channels in the week prior to the election.

An estimated 3.1 million people may have contributed to Obama’s campaign via the Internet, with many contributing amounts under $200, (amounts that can be anonymous ) and comprise in all about half of the $650 mio that Obama has raised since last year. Grass-roots financing also has the advantage that candidates are not then beholden to corporate sponsors. Unlike other candidates, he did not have to spend time calling up rich donors but could use the time to campaign.

Secondly, by articulating his campaign policies and ideas:

Obama not only raised money, he used the Net to articulate his policies and ideas. He announced Biden’s selection as his VP mate through mail & sms (text messages).

Thirdly, by enabling mobilize supporters:

Though the Net was used for the first time in a groundbreaking way for a political campaign in 2004 (by Democratic party candidate Howard Dean with a site built in Drupal and with the use of Meetup) and also used in 2008 by several candidates including Hillary & McCain (he used Google Adwords to raise money !), these were primarily for fund-raising. Obama’s campaign was the first to  exploit the full power of interactive web tools to organize  supporters / volunteers, in this he built on some pioneering work by Dean. 

Obama used social networking websites such as My Space (his primary profile  here had 850,000 friends as in end-November ’08: there were 60 other official profiles too). "Friends" of Obama on Facebook (over 500,000) got automatic news feeds from the campaign sent to their profiles, which were then seen by other friends. The campaign mass-texted (sms-ed) news updates ("CNN just projected Obama wins Wisconsin") and reminders of where to vote in upcoming primaries. He is my second degree friend on Linked-In !

His campaign used data mining tools to identify and tap potential supporters. A firm called Catalist (whose CTO is former Amazon.com executive Vijay Ravindran) did this. Chris Hughes, ex co-founder of Facebook helped build the online community My.barackobama.com.

The campaign took advantage of YouTube for free advertising. Some argue that those videos were more effective than television ads because viewers chose to watch them or received them from a friend instead of having their television shows interrupted. Quote: “The campaign’s official stuff they created for YouTube was watched for 14.5 million hours, to buy 14.5 million hours on broadcast TV is $47 million.”

Separately, during the 2008 campaign, there has also been a sea change in fact-checking, with citizens using the Internet to find past speeches of politicians and determine if they have been consistent and then using the Net itself to alert their fellow citizens.

Obama had a massive preference among young voters, first in the primaries vis-à-vis Hilary and then over McCain: the Net was an important force here. 

2. He has been looking at ways to use the Net to govern

In a bid to make the government more transparent, he is attempting to organize his campaign supporters into a political force that he can tap into in tough times. Just like Net was not used for campaigning, it has not been used to govern before.

This has been true both during his transition period when he started a site www.change.gov  and now as President with the official site www.whitehouse.gov. This again represents a first in terms of use of the Net.

Roosevelt pioneered fireside radio chats, JFK and later presidents used TV. Obama is posting his weekly addresses - as President-elect and now as President - on videos, not just putting it out on TV. The first address he made as President-elect was put out on You Tube at 6 AM, ahead of the radio broadcast. Again, during the transition, members (an estimated 11 million) in Obama’s email list were sent a mailer asking what ideas they had for the incoming Administration.

Post his taking over last week, he has asked his CTO to make within 120 days the Administration more Internet friendly, says this report on CNET.

3. Catalyzing use of the Internet, going forward

The expected $825 economic stimulus package for the U.S. economy will put money into public-works (i.e. infrastructure) programs such as construction, repair of schools, expand broadband access and put energy-efficient technologies in buildings. He has also supported the idea of a neutral Internet.

In announcing his public works program, the president-elect said it's unacceptable that the United States ranks 15th in the world in broadband adoption. Here, in the country that invented the Internet, every child should have the chance to get online," Obama said.

For this initiative, the House of Representatives Committee has on date already approved $6 billion while the Senate has recommended $9 billion . The money will essentially go to strengthen the rural broadband infrastructure.

In a related but separate story ,it’s been opined that Obama’s rise has now made the company Google into a powerful force too..

Update : Here is an masterly report that shows the Obama campaign actually raised the bulk (over $500 million of the $600 million odd) through the Internet, sent 1 billion mails across 7000 targetted messages to 13 million recipients, registered 1 million for it's text messages, developed 7 million friends across 15 social networking sites, had design and analytics teams, not unlike an actual Internet start-up would have done.  And here is an earlier report of Aug '08 (again from The Washington Times).