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New pasture for tech firms

Indian IT companies are scrambling to get into the media and entertainment space.

Shamni Pande        Print Edition: December 14, 2008

A different sort of convergence is taking place in the Indian media and entertainment space, including digital advertising. Leading technology and IT companies are getting ready to ride the expected boom in the sector by either beefing up their presence in it or striking alliances and partnerships with industry leaders or both.

Wipro’s media and entertainment unit already has a dedicated 1,200-plus team of technology and domain consultants focussing on segments like traditional print publishing, online information services, music and entertainment. The company has been providing solutions to some of the key industry players. “Being a customer-centric organisation, we have entered into and are looking at associations with industry leaders,” says Sridhar Srinivasan, Vice President (Communication & Media), Wipro.

Infosys, too, is ready with a game plan. Says Subhash Dhar, Senior VP (Executive Council Member) & Communication Head, Infosys: “As part of our broad strategy, we wish to focus on non-linear growth and emerging markets like India. The market is large and the opportunities that digital convergence opens up are beyond anybody’s imagination. It is up to us how we can continuously innovate and co-create with customers to deliver value.”

So, what explains this interest now in media and entertainment in emerging segments? “Indian IT companies traditionally started communication as just a one-off vertical in their portfolio. This has found further impetus as telecom has converged with media and entertainment (like Internet Protocol Television or IPTV), and now with the growing possibilities for triple play, it is a high-value proposition for IT companies to be present in this space,” says Kamlesh Bhatia, Principal Analyst (Telecom Carrier Operations and Strategies), Gartner. Dhar’s take is that as consumers today are exposed to digital media and entertainment in multiple formats and mediums, “service providers should aim at unifying their service offerings and provide a unified digital lifestyle to their subscribers”.

Points of convergence
Most major IT companies have forged alliances with leading players in media and entertainment.
Infosys has a partnership with Bharti Airtel for DTH
Microsoft is powering Reliance Communication IPTV
Cisco has entered into a deal with Airtel for IPTV
July Systems powers Network 18’s cricketnext.com for mobile platform
TCS has an alliance with TataSky
Satyam is a partner for FIFA World Cup

Sandeep Dhar, Managing Director, Sapient
Sandeep Dhar
Panning out

The alliances are panning out in different ways. Infosys, for instance, is in a technology partnership with Bharti Airtel, wherein it’s getting technology products for its multiple services. “The Interactive Television services are just one component of the Digital Convergence Solution we have developed for Bharti Airtel’s DTH service in India. At the moment, the IP licensing is exclusively for Airtel. We will be pursing new opportunities at an appropriate time,” says Dhar. In fact, players in DTH and IPTV have several alliances going with different technical partners for support. Satyam becoming the sponsor and IT partner for FIFA World Cup is considered a major coup. The relationship covers the 2010 and 2014 FIFA World Cups in South Africa and Brazil, respectively. It’s no surprise, then, that most IT companies are now reorganising their teams and refer to them as CME (communication, media and entertainment) segment.

But traction towards this space is not new, as the way was actually paved with the broadcast industry pitching for Pay-TV model. “Pay-TV requires the intervention of technology in terms of tracking subscribers, protecting content, etc. Also, the distribution platforms started taking off (like DTH and IPTV) that required a switch from coaxial to optical fibre,” says Atul Phadnis, CEO, MediaE2E, a media solutions company dealing primarily in the television space.

Also, convergence now means content aggregation and its delivery requires the intervention of IT, which these IT companies see as an important source of revenue generation. For instance, Infosys BPO has announced a strategic alliance with TV18 Group to launch Source 18 that will provide a spectrum of services to media and entertainment companies. In fact, Source 18 will utilise the services of Tangerine Digital Entertainment, a company specialising in content repurposing and media process outsourcing for part execution of the contracts. According to analysts, there are many ways in which these alliances are afoot. Also, 3G is bound to impact this business when it opens up. “We will see new content in gaming, multimedia, value-added content delivered over high-speed networks. Therefore, the synergy between media, entertainment and communication needs to be in place—with the aid of technology,” says Bhatia.

Ad-ing up
In the digital advertising space, Sapient—it does not classify itself in the IT space—has already established itself as a global leader. Analysts say Sapient derives its strength from its unique position. “Sapient has a strong technology heritage that separates it from most advertising agencies in digital marketing. It can provide help with the development, operations, infrastructure, and integration required to support interactive marketing efforts. Also, it has strong processes for helping companies gain alignment around a strategy. This alignment is critical to ensure a cohesive approach to marketing campaigns that often span both digital and non-digital channels,” says Bruce D. Temkin, VP & Principal Analyst, Customer Experience, Forrester Research, Inc. “We were one of the first to spot opportunity in the space and build our strengths. Usually, agencies work on the creative aspect and go to technology firms for all the rest of the work. We offer one-stop solution to brands and companies,” says Sandeep Dhar, Sapient’s Managing Director. The company has over 3,000 people based in India who provide back-office support to its work primarily for European markets. But Sapient has domestic plans as well. “We are planning to do more work in this region—particularly in outsourcing advertising production and interactive technology work,” says Gaston Legorburu, Chief Creative Officer of Sapient.

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