TECH TALK: Emerging Technologies, Emerging Markets: Emerging Technologies, Emerging Markets

A New Year is a time to look back and look ahead at the world around us. Most publications and writers put forward articles talking about past happenings and future possibilities. I too did the same last week. Thinking more about it, I realize that what is needed is not to just look at trends, but also evaluate them from an “emerging market” perspective. The world is a very different place as seen from India and countries like India. These countries are home to two-thirds of the world’s population. The challenge and opportunities lie in seeing how the latest technology trends can be applied to our countries, people and the small and medium-enterprises (SMEs) that account for most of the business.

The digital divide exists – between the developed markets of the world (US, Europe and Japan) and the emerging markets of the world (India, China, Latin America, Eastern Europe, Africa). Emerging markets have long suffered from lack of proper infrastructure and information. In many cases, their economies and enterprises have functioned in isolation of the rest of the world. Now, continuing progress across the board in computers, communications and software is offering hope that instead of the digital divide continuing to increase, it can perhaps be narrowed. Globalisation is no longer the preserve of the multinationals; SMEs in these countries can, using the latest technologies, look at selling products and services in other markets of the world.

The solutions for emerging markets do not lie in aping what the developed markets are doing with technology. What is needed is to (a) understand the latest technologies and their implications, and (b) understand the local challenges and ground realities. The marriage of the two will create unique, cost-effective solutions which have a potential to reach the mass market of consumers and enterprises, and genuinely make a difference.

Take a look at India. At first glance, it may appear that things ought to be much cheaper in India. But most things are much more expensive – right from real estate and travel to telecom and technology. Even the perceived cost advantage in salaries may not translate into huge benefits because of the inefficiencies – in processes and logistics. Yet, for the first time, there is at least a possibility that by using technology appropriately, it may be possible to drive grassroots change and increase both domestic consumption and exports, leading to raising the standard of living and the country’s GDP.

I intend to, over the next few columns, present a viewpoint from an emerging market (India) on what these new trends and technologies are, what they mean, and how they can be applied to leapfrog and potentially, build out global companies. The ideas are by no means perfect, but are meant to initiate thought and discussion. Our future lies in our own hands. We as entrepreneurs have to build a base for the coming generation to leverage and grow.

TECH TALK: 2001 to 2002: The Year To Come (Part 2)

A growing trend which has huge implications for India is Outsourcing. The dream of India as back-office to the world may still be a few years away, but 2002 should see a healthy increase in IT enabled services and Business Process Outsourcing (BPO) offered from India. Much of the venture capital investment in India is being directed in this area. The next two years will see the Indian leaders emerge – companies with significant scale and size, just like their counterparts in the software services area (TCS, Infosys, Wipro and Satyam).

The other big opportunity for India lies in the Pharma/Biotech arena. The selection of Anji Reddy as Business India’s Businessman of the Year for 2001 and Forbes’ cover story on the Indian pharma companies is an indication of future portents. The mantra is now: from copycat to copyright, from imitation to innovation. Indian companies (Ranbaxy, Dr Reddy’s Laboratories, Cipla) are becoming more research-driven. Says Andrew Tanzer in Forbes (December 10, 2001) in a story entitled “Pill Factory to the World”: India, with its flowering of English-speaking, scientifically literate people, just might rise above the business of making generic drugs and ripping off patents. It could become an innovator and a respecter of intellectual property.

On the Internet front in India, 2002 will see more consolidation as companies try to become profitable. Connectivity is still a challenge in many parts of India, and the much-ballyhooed broadband revolution hasn’t exactly taken off. Hopefully, the coming year will see greater and cheaper bandwidth for corporates. On the consumer side, many of the currently free services available through the surviving portals are likely to become subscription-based. Internet Advertising and eCommerce are both still too small to provide sustenance for the companies.

The killer app continues to be messaging. While email has become much more widespread (concomitant with viruses and spam), the two new messaging forms making their appearance are Instant Messaging (especially within corporates, as long-distance becomes the first casualty of cost cutting measures) and SMS. 2002 will see the first of the services which more tightly integrate Email, IM and SMS to provide an integrated messaging platform.

Two dark horses to look forward to in 2002 are Curl and Emergence.

Curl claims to make websites faster by a factor of 10. Not a unique claim, but its pedigree is what makes it interesting. Writes Kennedy Grey in Wired (December 5, 2001):

Curl’s silver bullet is boosting the speed of browsing and developing websites. Websites that use a single language will provide a significant increase over today’s sites, which utilize a growing number of different software tools such as C++, HTML, Quicktime, JavaScript, Shockwave and Flash and other plug-ins that enable contentCurl’s development team includes the “father of the Internet” Tim Berners-Lee and MIT tech luminary Stephen Ward. MIT tech guru Michael Dertouzos, who died in August, was also on the team.

Emergence is about how self-organizing decentralized systems that involve a whole host of distributed elements that somehow collectively manage to solve higher-level problems. A new book by Steven Johnson (Emergence: The Connected Lives of Ants, Brains, Cities and Software) explores this fascinating world. 2002 will see one such “emergent” product in the form of the online version of The Sims, the best-selling video game.

So, as we bid good-bye to 2001 and look ahead optimistically to 2002 with the feeling that a lot may have changed in the past year, the trinity of innovation, creativity and entrepreneurship will ensure a continuation of the exciting times. Wish you all a Very Happy and Prosperous 2002!

TECH TALK: 2001 to 2002: The Year To Come

2002 is likely to see the challenging times continue. Telecom faces the biggest hurdles driven by the overcapacity in the fibre laid worldwide and the huge licence fees committed for 3G in Europe. Companies are increasingly cautious about their IT spending, especially on computers.

The one area which is likely to recover earlier than others is enterprise software, as companies push ahead with their eBusiness plans in search of efficiencies. Writes Mike Veverka in Barron’s (December 24, 2001) in an article on how the Dow 30 companies are leveraging the Internet and delivering on its promise:

The emergence of the Internet has prompted far more uses among America’s corporate leaders than were originally foreseen. As expected, online purchasing has dramatically streamlined supply chains. But the Web has also brought companies and consumers closer together. And employee portals are simplifying time-consuming paperwork, as well as fostering increased cooperation within companies — and with customers — around the globe.

Two drivers for this change are coming through standardisation – in software and in business processes. 2002 will be the year when Web Services (XML, SOAP, WSDL, UDDI) and Business Process standards (ebXML, RosettaNet, BizTalk) start becoming adopted across organisations in their efforts to become Real-Time Enterprises. 2002 will also see the first salvos in the battle between Microsoft’s .Net and the EJB/J2EE (Enterprise Java Beans/Java 2, Enterprise Edition) that some of the other enterprise software vendors support.

The Mobile Internet is already creating an envelope of connectivity which will have as far-reaching consequences as the wired Internet had. Wireless in all its forms – Bluetooth, 802.11b and 2.5G – are helping build ubiquitous connectivity both for the short-range and long-range, and will become more mainstream in 2002.

In a speech in Mumbai recently, Nicholas Negroponte, the director of MIT’s Media Lab, advocated the use of 802.11b and unlicenced spectrum for telecom in India. By redefining how power can be used, the solution can also be used to go much beyond the few hundred metres it currently supports to provide telecom services in rural areas. He said this is a bottom-up solution which can help India take leadership in the world in telecom.

In India, the two significant changes in the telecom space are the lowering of the STD rates due to competition (starting with cell-to-cell calls carried through Bharti’s national long-distance network, from January 26) and the legalisation of Voice-over-IP (Internet Telephony) from April. Both developments should increase volumes and see India’s high telecom rates drop substantially – finally!

2002 will also see the first of the “convergence gadgets” make way into our lives – from mobile phones with cameras and FM radio (Nokia’s newest phones) to PDAs with cellphones (Handspring Treo). Apple’s iPod, the MP3 player which has got rave reviews, will become available for the Windows platform also. The problem for countries like India remains the high price. What we need here is 30% of the functionality at 30% the price! A start will be made with the launch of the Simputer, which hopes to provide a low-cost computing platform for rural communities in local languages.

TECH TALK: 2001 to 2002: The Year That Was (Part 2)

Consolidation in the technology sector continues: HP is making a bid to buy Compaq. Earlier in the year, IBM bought Informix (databases). In fact, this highlights the maturing of the computer industry, as Peter Martin explains (writing in the Financial Times, December 20, 2001):

Most of the industry’s sub-sectors – huge industries in their own right – are settling down in effect as duopolies, with two leading operators clearly ahead of their rivals.

In databases, the battle is between Oracle and International Business Machines. In enterprise management software, it is between SAP and Oracle. If the HP/Compaq deal goes through, the leaders in big corporate systems will be IBM and the new HP, selling technology derived in part from Compaq’s acquisitions of Tandem and DEC. For corporate sales of desktop personal computers, the rivals will be Dell and the new HP. In internet systems, they will be Sun and IBM. In PC microprocessors, they will be Intel and AMD.

There are a couple of sub-sectors where the battle is three-way: mid-sized corporate systems, where IBM competes with Sun and the new HP; and network storage devices, where the new HP will take on IBM and EMC. And there are a couple of areas – desktop operating systems and office productivity applications – where there is really only one big operator: Microsoft.

An industry once noted for its breadth of competition is settling down into a pattern familiar in other mature businesses: two or three leaders in each sector and a number of also-rans. This process is accelerating in the industry downturn as companies merge, pull out of unprofitable sectors or drop behind the pace of innovation.

For India, it has been a year where the realization has become clearer that knowledge-based industries are our future. Satyam and Wipro (software services) along with Dr Reddy’s Labs (pharmaceuticals) listed on the US exchanges, emphasising that IT and BT (infotech and biotech) are the areas where India can attain leadership in the coming years. The dream of India becoming a back-office to the world inched forward as IT-enabled services seemed to the only ones attracting any kind of investment. Telecom rates finally seemed set to drop due to competition (especially in the long distance segment) and the legalisation of Internet Telephony.

As if it were a reflection of the harsh realities, the biggest movies of the year include 2 fantasies (Harry Potter and the Sorcerer’s Stone, Lord of the Rings: Fellowship of the Rings) and 2 animated ones (Shrek and Monsters). In India, the three hits of 2001 aptly sum up the year: Gadar (a throwback to the days of the India-Pakistan partition), Lagaan (a fantasy cricket match set in the late 19th century) and the aptly titled Kabhi Khushi Kabhie Gham.

TECH TALK: 2001 to 2002: The Year That Was

It’s that time of the year again – when one looks back at the year that was, and look forward to the year that will be. 2001 will be remembered for 9/11 – when the world changed. As 2002 dawns and the initial phase of the war on terror nears conclusion, two more terror flashpoints are edging their way on to our radar screens – the Middle East (between the Israelis and the Palestinians), and Kashmir (between Indians and Pakistanis). Technology and the Internet have taken a backseat for now, as the battle between Good and Evil has come to the forefront.

2001 was a year when many things got postponed. Prosperity, Profits and Peace will have to wait for 2002.

In 2001, much of the world sank into a recession. On the technology front, the pace of innovation slowed as venture capital became harder to find for newer ventures and companies focused first on the immediate tasks of rightsizing to survive. Corporate IT budgets came under scrutiny after years on unbridled spending. IPOs on the anemic stock markets were almost non-existent. A new maturity came over the world, heightened even more by the events of the past three months.

Internationally, even as attention was diverted, the flow of events in the technology space reflected the newer realities: growth stalled forcing companies to eliminate jobs by the thousands and look at outsourcing, yesteryear stars like Excite@Home, Enron, Webvan, eToys and Napster slid into oblivion, and stock prices fell to lows which were unimaginable just a year ago. Yahoo got a new CEO from Hollywood, ATT gave up its grand convergence theories and is selling its broadband business to Comcast, a Time Warner executive took over
at AOL-TW, Amazon shrunk its m-commerce plans.

Viruses, Spams and Break-ins too continued unabated, highlighting the need for security. The Microsoft juggernaut rolls on, with a favourable settlement in its anti-trust trial and the launch of Windows XP and Xbox. Microsoft’s entry into the video gaming business has focused attention on the sector, as it takes head-on Sony and Nintendo. Messaging is what everyone seems to want to do. It now comes in all kinds — email, Instant Messaging, wireless (through devices like the Blackberry) and SMS (on cellphones).

The Invention of the Year has to be Segway, Dean Kamen’s human transportation system. The Device of the Year is undoubtedly Apple’s iPod, the sleekly designed MP3 player. Creativity still has its place. So does operational efficiency and branding as both Dell and Nokia try and aim for 40% market share in personal computers and cellphones.

TECH TALK: Leisure and Entertainment: Sunday Magic

Leisure and Entertainment activities are a necessity for a balanced life. They help us explore new frontiers, build new relationships, enhance the variety and spice of life, and enrich our lives. They allow us to create our own delightfully imaginative world with its own innovations. They inspire us on to greater heights by providing us space for ourselves – giving us time to think, time to be different, time to be ourselves.

In the world of leisure and entertainment, perhaps nothing is looked forward to as much as a Sunday. Wake up late, have an extended reading of the morning newspapers with all their supplements, a special brunch, spend time with the family, catch up with some TV and sleep, read the latest thriller, or just meet up friends. Sundays have that magical quality which makes them so special and eagerly awaited. It is a day which separates the work week just gone by and the one coming, a day with leisure and entertainment at its heart.

However, for many of us, due to a mix of technology and the increasing pressures of work, Sundays are gradually mixing with the rest of the week. Work becomes the central focus of all that we do, with dwindling time for everything else. Time for ourselves, and friends and family is decreasing and becoming increasingly fragmented. In all of this, it is all the more important that we make time for ourselves, for our leisure activities.

So, here are some ways to begin to do something different. This Sunday, pick an activity which you have long wanted to, but “never could find the time for”, or perhaps, do something you did when you are younger. Either way, make a beginning and watch the extra dimension it will add to your life and personality. Buy a shortwave radio and explore the airwaves. Watch a great movie. Go for a long walk. Meet some friends. Listen to music. Write a Diary.

Or (and this is what I intend to do), you could start by Reading a book – a particularly good one (given that it is so much in the news now) is Tolkien’s “Lord of the Rings”. The essence of the book (and of life) is captured in this quote from a review by W.H. Auden (January 22, 1956 in the New York Times):

Life, as I experience it in my own person, is primarily a continuous succession of choices between alternatives, made for a short-term or long-term purpose; the actions I take, that is to say, are less significant to me than the conflicts of motives, temptations, doubts in which they originate. Further, my subjective experience of time is not of a cyclical motion outside myself but of an irreversible history of unique moments which are made by my decisions.

For objectifying this experience, the natural image is that of a journey with a purpose, beset by dangerous hazards and obstacles, some merely difficult, others actively hostile. But when I observe my fellow-men, such an image seems false. I can see, for example, that only the rich and those on vacation can take journeys; most men, most of the time must work in one place.

Mr. Tolkien has succeeded more completely than any previous writer in this genre in using the traditional properties of the Quest, the heroic journey, the Numinous Object, the conflict between Good and Evil while at the same time satisfying our sense of historical and social reality.

So, hobbits of the world, this Sunday, let us embark on a different Journey, one with its own Quest.

TECH TALK: Leisure and Entertainment: Indoors, Outdoors and Socialising

Three leisure and entertainment activities which have not changed much since time immemorial: staying home, going out and meeting people. While many of the other entertainment activities discussed here can be classified as Indoors or Outdoors, there are some more activities which are distinct from the previous seven (Reading, Radio, Music, Television, Movies, Gaming and Internet).

For many, Indoor leisure activities are synonymous with Hobbies. These hobbies could range from painting to stamp-collecting, from doing jigsaw puzzles to needlecraft. Hobbies give us a much-needed diversion, a break from our workday lives, and an outlet for our creative instincts.

Other Indoor activities comprise board and card games. Chess, Scrabble, Carrom, Checkers, Monopoly are Rummy have survived the tests of time even in today’s technology driven world. Many of these same games can be played on a computer, but it’s just not the same. These are all “multi-player” games, and the fun lies as much in playing as seeing the reactions of the others in victory and defeat!

Technology has, however, impacted another old Indoor pastime: browsing the Family Photo Album. Camcorders and Digital cameras are gradually replacing the “click-develop” routine and moving the activity into an all-electronic world where photos and video clips are available with a different version of the “click”.

Outdoor leisure and entertainment activities range from playing cricket (okay, also football) with friends in the building, going out for long walks (Henry David Thoreau: I think that I cannot preserve my health and spirits, unless I spend four hours a day at least — and it is commonly more than that — sauntering through the woods and over the hills and fields, absolutely free from all worldly engagements) to vacations.

In India, as the population of cars has increased, playing space in most buildings has been amongst the early casualty! The various shopping complexes (malls) being set up as part of the ongoing revolution in retailing are creating good hangout places. Vacations are now becoming more exotic as people are more willing to explore new places and spend. The Internet has eased the process of finding information on places and in cases, even doing the reservations. Five-day workweeks in many organisations have created weekend getaways. As work life gets more intense, so does the need for vacations.

In all of this, the human need to meet others has changed the least. We still want to socialise – doesn’t matter how many emails and IMs have been exchanged! True, the mix of phone, email, IM and SMS helps in putting these get-togethers and meets more effectively. Just sitting with people you like and chatting away through the night, randomly flitting from one topic to another, reminiscing about the past and sharing one’s dreams for tomorrow is as simple an activity as we can imagine, and yet perhaps the most emotionally satisfying. The more things change around us, the more we remain the same.

TECH TALK: Leisure and Entertainment: Internet

The Internet is altering leisure time and communications. Email and Instant Messaging (IM) are creating links with people whom we otherwise may not have contacted. A decade ago, letter-writing was seemingly the only cost-effective to bridge distances between friends and family. Then came email. For a generation, the first whiff of typing was to send emails. Writes Katie Hafner in the New York Times (December 6, 2001):

Email is the glue that keeps far-flung families together. Romantic relationships find both outlet and solace in it. In some ways, observed Nico Macdonald, a principal of Spy, a London-based research firm, e-mail has become the ultimate medium through which humans use computers – to organize discussion groups, deliver news stories, confirm purchases, signal updates to Web pages or play chess. Or as he put it in the language of the Internet age, “E-mail has become an entire personal information environment.”

Now, even email seems to be too old-fashioned as the short, frequent and Instant Messages have taken over. Buddy Lists and the Presence information encapsulated in the IM applications have transformed the way we communicate. The real-time nature of IM is evolving its own language. What email did to letter-writing perhaps IM will do to email in the coming years.

Along with email and IM, the other top activities of what the Internet is used for, according to a recent survey done by UCLA, are browsing, buying online, finding entertainment information and reading the news. According to the report, 72.3 percent of Americans use the Internet, up from 66.9 percent last year. Users spend an average of 9.8 hours online per week, up from 9.4 hours per week in 2000. Broadband users spend an average of 3.2 hours more online than dial-up users do.

In India, where one still has to pay local call charges of almost Rs 30 (USD 0.60) for every hour online, usage is likely to be at about half the US levels (about 15-20 hours a month) for the 6 million Internet users. Messaging is indeed the killer app, especially with family and friends abroad, since the cost of telecom is still quite expensive. Even though VoIP (Internet telephony) has still not been legalised (likely to happen in April 2002), for many families that has already become the bridge to daily conversations.

The Web may be a recent phenomenon (this year is the 10th anniversary of the publication of the first American page), but it has already made significant inroads into our lives in the past 5-6 years. Web Browsing ranks right up there with Channel Surfing in how we can absorb seemingly infinite amounts of random information! The key difference of course is that with the Web, one is much more in control of what one wants to see. This interactivity is what sets the Web apart and will make it an increasingly powerful element in our lives.

For many in the world’s emerging markets, the Web has indeed opened up new windows to the world, just as the radio and television did many years ago. In that sense, the Internet (along with education) are great equalisers. Even though the information, entertainment and communications value of the Internet is what one first sees, the potential to use it for commerce (especially by small and medium-sized businesses) is what is going to be the key driver in many of these markets.

TECH TALK: Leisure and Entertainment: Gaming (Part 2)

The two big innovations in the gaming business are expected to make them even more popular and mainstream: online gaming and wireless games.

Online games allow for large numbers of people to play each other connected through an online network (either a dedicated one, or via the Internet). Facilitating the move online will be the ability of the consoles to have broadband connections, and the shift from products to services (read subscriptions). Online Gaming is even being wired as the killer app for broadband.

Writes Olga Kharif in Business Week (December 13, 2001) on the world of online gaming:

It’s a secret world of sorcerers, dragons, elves, and giants. They spy on you from behind castle walls, hunt you down in the darkness of dungeons, and live to watch you die. More than 400,000 people pay $9.89 per month, plus software fees, to face the danger in the most popular, massively multiplayer game on the Web: EverQuest.

The game, in which players across the globe interact in the same adventure world, can definitely pull you in: More than 40% of EverQuest users play 20 to 40 hours a week, according to its maker, Sony Online Entertainment. Released on Dec. 3, the game’s newest installment, called Shadows of Luclin, sold more than 120,000 copies at $29.99 each in its first day in stores. It may be the most spectacular game success on the Web, the latest in a growing list of aspirants to that title.

Fans argue that online games will ultimately have more appeal than PC-based counterparts because they can incorporate a sense of community and an unpredictability that’s more akin to the real world.

Wireless games will come to us through the cellphones. The Snake game on the Nokia cellphones is a very primitive example of the world of tomorrow. Here too, the ability to connect into high-speed wireless networks and ubiquitous reachability can create a situation where, in the words of the creators of Majestic, “the game plays you”. Writes Ray Sharma of BMO Nesbitt Burns in a report on Wireless Gaming (October 16, 2001):

One of the more surprising developments in the wireless data industry to date is the growth of wireless gaming and entertainment. [Japan’s] NTT DoCoMo, the undisputed global leader of Mobile Internet subscribers, reports that almost one-fifth of its i-mode network usage is taken up by games and horoscopes, and that more than two-thirds is driven by ring tones, screens, entertainment, games and horoscopes all grouped together.

The acceptance of wireless games should not be underestimated. It is a common perception that consumers only play wireless games while they waiting for subways or waiting in lineups, but the ARC Group discovered that the heaviest usage occurs during evenings and weekends. This supports the argument that wireless gaming is an activity that consumers choose to spend their time doing and is not just an activity that people engage in when they have nothing better to do.

The significance of wireless gaming is already ensconced in Asia, but we believe there are strong signs that it will be dominant here in North America as well. In Canada, Bell Mobility discloses that 40% of its Mobile Internet traffic consists of games and entertainment (dominantly games).

Enough for today. I need to get back to my FreeCell.

TECH TALK: Leisure and Entertainment: Gaming

Solitaire, FreeCell, Minesweeper, Hearts – these are as familiar to many as Outlook Express, Word, Excel and PowerPoint. Gaming is an extremely popular pass-time, and the computer has made it that much more easier. From the days of Pac-man to Quake to Myst to SimCity, computer games have been a part and parcel of the life – as the computer has become more powerful, as have our games.

The other side of the Gaming story lies in the dedicated gaming consoles: from Nintendo, Sony and now Microsoft. Sega dropped out of the consoles race recently. Put together, the installed base of consoles is about 120-140 million worldwide, with the US and Japan being the top two gaming nations. Just in this holiday season, the new consoles from Nintendo’s GameCube and Microsoft’s XBox are expected to see nearly 3 million units between them. Sony’s Playstation 2 has sold 6 million units in the US since it launch earlier this year. In the US, gaming now generates more revenues than films.

Gaming as a leisure-cum-entertainment activity is not restricted to the US. Among the world’s leading gamers is Korea, thanks to the highest penetration of broadband and the creation of “PC rooms” (like cybercafe). Games are the biggest attraction for the young crowds who throng these PC rooms.

Says Robert Kotick, CEO of Activision, one of the leading game-developers, of the future (in Business Week, December 13, 2001):

Today, [gaming is] very much a hobbyist and enthusiast business. It reaches tens of millions — but not hundreds of millions. When it grows into a mass-market business, that’s where you see the dramatic changes in software sales. When every house has a game console. The one elusive goal we have as an industry is to broaden the customer base. We have never been able to get more than 30% household penetration. Compare that to VCRs with 95%, or TVs with 98%.

I think the addition of a broadband capability and multiplayer capability to the next generation of hardware will really drive consumption, so that, in years that would historically have been transition years, sales will continue to grow. That growth will come from the same things you have in the online world…things like digital downloads of games off the Net. That interests us, because it allows a customer to do a trial or sampling, which today there is no great mechanism for. If you want to try a game now, you go to your friend’s house or go to Blockbuster and rent it.

In India though, gaming has been restricted to the computer. The gaming consoles have still not been officially launched in India (and in some of the other Asian countries) because of fears of piracy – of the software. The consoles are subsidised to spur the purchase of the software titles. If these are pirated, then it becomes a no-win situation for the gaming companies. For India, the opportunity may lie in combining its skills in software and entertainment to create gaming software.

TECH TALK: Leisure and Entertainment: Movies (continued)

The Indian film industry is the biggest in the world in terms of production – India produces over 800 films a year compared to about 700-odd in the US. (Just for the record, the next highest is France with about 170). But, quantity does not mean big bucks. The Indian film industry grosses about USD 500 million per annum, a fraction of Hollywood’s USD 10 billion.

Komal Nahta of Film Information (November 17, 2001) identifies some of the causes of the poor quality of most of the Indian films: lack of a bound script, star interference, lack of seriousness, blindly following trends, lack of objectivity, being dishonest to one’s subject, missing the soul in a remake, time-bound pressure, the yes-men syndrome. The result is evident so far this year. With two unlikely hits in the form of the period films Lagaan and Gadar, conventional wisdom has been turned on its head. The industry has suffered huge losses as established banners and stars have disappointed audiences.

India is now no longer a homogenous film market. There are three clear divisions: the urban Indians (major metros), rural Indians (interior India) and the NRIs (outside India). Each segment has different expectations. Only a handful of movies have bridged this divide effectively in the past few years. The biggest Indian successes have earned Rs 70-100 crores (USD 14-20 million). Compare this with the first weekend gross of the Harry Potter movie of USD 90 million in the US alone. Of course, production costs of Indian movies are comparatively small: about Rs 10-15 crores (USD 2-3 million) compared to tens of million dollars for most Hollywood productions.

Amidst all this needs to be the realisation that the expectations and attitudes of Indian movie-going audience has changed in the past few years. The ongoing opening up of the Indian economy, rising income levels, easier credit and television’s diversity has increased the horizons and expectations of Indians. Audiences are much more aspirational, the youth has greater spending power, and there is a need for “something different”. At the same time, time is becoming a premium. Setting aside a minimum of three hours to watch a Hindi movie (add another hour for travel) is no longer the easiest thing to do.

The irony of it all is that at least one of the problems in India — the lack of availability of quality theatres – is being solved through the proliferation of multiplexes. The multiplex boom is creating the platform at a time when quality software (the film itself) is becoming rare and the competition for the audience time is increasing. This is a period of flux: the infrastructure for watching quality entertainment is being put in place, even as film-makers are only now realising that the audience in India is not what it used to be 10 years ago.

In the coming years, Indian films will increasingly need to be thought of as “branded products” and need to be marketed as such. Additional revenue streams like merchandising, DVD sales and video games will need to be targeted. They will need to also target “crossover” audiences (non-Indians in international markets), along the lines of “Crouching Tiger, Hidden Dragon”, which earned USD 100 million worldwide. Of course, the basic requirement remains that of producing a quality product. Here, there is a need to look beyond the regular formulaic stories and yet produce a crisp, tight film with broad appeal. This is the inherent challenge for Indian film-makers if they have to retain, regain and extend their audience.

TECH TALK: Leisure and Entertainment: Television (continued)

Technology has made all the difference on the back-end in Television – on the broadcasting and distribution side. The front-end has remained largely unaffected. One gadget that may actually do quite well in India is the Personal Video Recorder (PVR). Writes Laurie Flynn in the New York Times:

Personal video recorders from TiVo, SonicBlue and UltimateTV allow viewers to record programs, sometimes two at a time, store them to view later, pause and replay them as they are being broadcast. To varying degrees, all the recorders let viewers fast-forward through programs, including the commercials if personal digital recording does catch on, it could significantly alter the way people watch TV. “People are really drawn to the idea,” said Mr. Nick Donatiello, president of Odyssey Research in San Francisco. “It gives them what they want: choice and control.”

PVRs have had only limited success in the US, with a total installed base of less than half a million. The situation may be quite different in India. Considering that there are so many interesting soaps being broadcast in parallel on Indian television in the evenings, one may want to think of recording some of them on the PVRs and then watching these on weekends. That may be just the programming needed for our Saturdays and Sundays!

Movies

Movies like HAHK, MPK, Lagaan, Dosti, Sholay, Deewar, Dil To Pagal Hai and Mother India stop us in our tracks whenever we see them. A good movie is like a picturesque sunset — the memories linger on for long after the event. It envelops you, making you forget the world around. A good film makes you laugh and cry with its characters. It touches your heart. It makes you want to stay still long after the credits have passed, savouring what you have watched for that wee bit extra moment. A good movie stirs, captivates and inspires.

The best of Indian movies, with their songs, celebrate Indian traditions and values, bringing forth the depth and variety of human relationships, and creating a visual tapestry as rich as India herself. The best movies are more than just a few hours of entertainment; their sweet taste and after-effects fade away ever so slowly. Their stars become role models, their characters spawn a generation of children named after them. Their dialogues become a part of our vocabulary, their songs resonate with our lives. Our definitions of friendship and romance, of love and sacrifice become defined by our movies. Good movies and their music are as much part of our lives as family and friends.

Films and their escapist fare have been a staple diet of India’s leisure activities for more than 50 years. Little changed until the early 1990s. The challenge then was video piracy. While this still remains a bugbear of the industry (most new films are shown on cable TV illegally within the first few weeks of their release), movies now face competition not just from alternate forms of entertainment like television, but also from within with escalating costs and falling revenues.

TECH TALK: Leisure and Entertainment: Television

TV has been the huge winner in the Indian mass market entertainment sweepstakes in the past decade. The plethora of channels available through cable at an incredibly low price (about Rs 200 or USD 4 per month) has made the TV the hub of entertainment in most Indian homes. Of course, the TV by itself is nothing more than an “idiot box”. What makes the difference is the programming, and this is where it gets interesting in India.

Indian prime-time television today is all about large families and the complex web of relationships, especially among the womenfolk. If most of the Indian movies depict escapism and teeny-bopper love, the TV serials are more about rivalry and hatred – all within the same family. And yet, there is an element of realism in what TV shows – characters which are more grounded in reality, and situations faced everyday. If films are about next-door neighbours, TV is now a story of one’s own home. The actors and actresses are more identified by their TV names and personalities. There is no Shah Rukh Khan or Hrithik Roshan on TV. There is Tulsi, Parvati, Kkusm and Kajal. Prime-time TV in India is like holding a mirror to Indian society.

18 months ago, most of the prime-time soap operas were broadcast weekly. There was a richer mix of programming. Today, it is about serials broadcast 4-5 times a week, 52 weeks a year. So, unlike the US where there may be 26 or at most 39 new episodes of prime-time programmes, in India there are 200-250 new episodes a year. (One of the last non-soap bastions in Star’s KBC, anchored by Amitabh Bachchan, takes a break soon.)

This has also changed the economics of TV serial production, with one company – Balaji Telefilms – accounting for nearly a third of the prime-time TV programming across the top 3 channels (Star, Sony and Zee). Balaji clearly benefits from the economies of scale which a factory approach to TV serials can bring.

Where the audiences have gone, the advertisers have followed. Ad revenues for Star, Sony and Zee are in the region of Rs 500 crores (USD 100 million) apiece. In addition, the TV channels have also started collecting small amounts of subscription money each month from the viewers through the cable networks. The big story of the last few years has been the rapid decline in the fortunes of India’s state broadcaster, Doordarshan.

The other big difference between India and the US lies in weekend programming. While much of the Saturday-Sunday watching in the US centres around sports, in India cricket is the only sport that people watch with on TV. And Cricket with its 9-to-5 spread takes place any of the days, not just on weekends. Weekends on TV in India are still somewhat film-centric, and this may be the area where changes take place in the coming years.

TECH TALK: Leisure and Entertainment: Music (Part 2)

Besides music distribution, the impact of technology is also being felt on music listening. Personal devices like MP3 players make it easy to listen to music anywhere. The recently introduced iPoD by Apple is being dubbed by Steve Jobs as the 21st century Walkman. The gorgeously designed device allows 600 songs to be downloaded from a Macintosh to itself in six minutes. Writes Stewart Alsop in Fortune (December 10, 2001):

iPod solves today’s music-listening problem: I’ll soon have all of my music on one very portable device to listen to whenever and wherever I want to.

When I get in my car, I will plug the cassette adapter I got at Radio Shack into the iPod so I can listen to the music through my car’s stereo system. When I get home to finish working on this column, I’ll change to the big headphones that let me work at the computer without being distracted. In other words, the device is so portable and self-contained that it solves the lifetime problem I (and every other person who listens to music) have, which is that the music I want to listen to is always somewhere else: The CD is in the house when I’m in the car, and so on. Now, with iPod, the music I want is always in my pocket.

The Indian music distribution and listening scenario has remained largely free from technology. Napster and its cousins have made only a marginal difference in India due to the limited penetration of the Internet. India has had its own Napster industry for many years in the form of piracy! MP3 players are still too expensive and sparsely available.

India is unique in the sense that most of the best-selling music albums are film-based. So, in some sense, the concept of “music videos” in India is as old as the film industry itself! While there are some classical and pop brands, their sales are dwarfed by the hit film albums. Most of the sales still come from cassettes priced at Rs 50-60 (USD 1-1.20). A recent hit (and there have been only a handful this year) like “Kabhi Khushi Kabhie Gham” has sold over 3 million cassettes already, prior to the movie’s release.

Music rights for Hindi movies had recently touched record highs – the music of Yaadein fetched nearly Rs 9 crores (USD 1.8 million). What changed in the past few years has been the increasing use of mainstream television to promote music. Prices for rights have recently started falling as the returns haven’t been forthcoming. A big challenge in India remains piracy of cassettes with the rip-offs being sold at half the price, especially in the smaller towns and rural areas.

The last word from Moby, an American star, writing in the Economist’s “The World in 2002”:

One thing is certain. And that is that people have been in love with music for the length of human history regardless of how it is created and distributed. And I cannot see humanity’s love of music disappearing just because the technology changes. But things are going to be lot different musically from a commercial standpoint as the technology gets better and faster. Music and musicians, audiences and appreciation will remain. All else will change beyond recognition.

TECH TALK: Leisure and Entertainment: Music

The greatest impact of technology amongst all the entertainment segments has been on Music, especially its distribution. Napster last year made music available to millions around the world for free. Even today, it is possible (with some effort) to get MP3 files for free on the Net. Use of three of the best-known file-sharing services, Grokster, Kazaa and MusicCity, jumped 20% between September and October, when users exchanged 1.81 billion files, according to market research firm Webnoize.

Get a CD-writer and one can churn out customised CDs for a negligible cost. So, in some ways, one could argue that what technology and the Internet do is to make it possible for music lovers to find and listen to more of their favourites. The problem of course is how to collect money for bits and bytes that are easily shared by people through the Internet.

This is what the music companies are wrestling with. There is a belief that the future of music, like software (and perhaps other things digital), lies in subscriptions. All the top music recording companies are launching Internet music services soon. Write Nick Wingfield and Anna Mathews in the Wall Street Journal (November 29, 2001):

MusicNet, backed by EMI Group PLC of Britain, Germany’s Bertelsmann AG, AOL Time Warner Inc. and software maker RealNetworks Inc., won’t let customers purchase songs in the traditional sense. Instead, consumers will have two choices. They can “stream” a portion of their monthly allotment of music, allowing them to listen to songs over slow Internet connections. They also will be able to download and store songs on their computers, but only listen to them for a limited time.

Instead of owning the music permanently, a user will acquire a “license” to listen to designated songs for 30 days. Consumers might pay $10 or so a month, for example, for rights to listen to more than 150 songs, according to industry executives familiar with MusicNet’s plans. To keep listening to a song after the 30-day period, a user that again clicks on that selection will have that song counted against the current month’s allotment.

Possibly the biggest drawback is that music from both services will be stuck on customers’ PCs. Initially, the special software used by the ventures won’t let consumers record songs onto compact discs or digital music players. Making such personalized, portable tune selections is a predominant pastime for digital music fans.

Will this work? It is hard to say, but the odds may be stacked against these services given that the world has already tasted the joys of free music!

TECH TALK: Leisure and Entertainment: Radio

Radio offers perhaps the cheapest form of entertainment for the masses. A Rs 200 device offers news, music and other programming from across the world. Medium-wave and Short-wave listening were the only options in India until a few years ago. FM radio stations in India are a relatively new phenomenon, with availability limited to a single radio station in few cities. This is expected to increase in the coming years following an auction of the frequencies last year. But the bidding frenzy saw prices which were seemingly too high, leading many of the winners to rethink their plans.

Technology is also changing Radio broadcasting and listening. The two biggest drivers of change have been the Internet and Satellites. Streaming allows for radio stations to deliver their content beyond a limited geography. The downside of course is that to listen one still needs a computer. Satellite Radio intends to take this one step further. Companies like XM and Sirius in the US, and Worldspace globally are offering satellite radio services, promising CD-like quality from an array of radio stations worldwide. These services need a new receiver. Also, some of the services may need a monthly subscription. This may limit their use to truckers, commuters (primarily in cars, a limited breed in India) and connoisseurs.

Writes Peter Lewis in Fortune (October 15, 2001) on the service offerings by one of the satellite radio services:

XM’s 100 channels are divided into “neighborhoods,” including 15 pop music channels, ten channels of rock, six channels of jazz and blues, six of country and bluegrass, seven hip-hop and soul channels, six varieties of world music, five Latin channels, four classical, and even individual channels for music from each decade from the ’40s to the ’90s. There are a dozen news channels, five sports channels, three comedy channels, two kids’ channels, and a bunch of special-interest channels spanning African-American topics to Christian talk radio to a channel especially for truckers.

XM costs about USD 10 a month and needs receivers costing about USD 300. Satellite radio may definitely offer variety but is likely to be out of the reach of the mass market in countries like India.

The biggest impact on Radio has come from the growth of Television and to a much smaller extent in India, the Internet. I remember the days surreptitiously listening to radio in school and college to get the latest cricket scores. (Come to think of it, this must still be happening – there isn’t much of a choice in the classroom!!) Now, more often that not, one gets the latest scores and news updates either on TV or through the Internet.

The Radio, though, will always have its niche – its low cost, near-universal reach, portability and variety in terms of options (especially languages) is unmatched by any other entertainment device. For many, the Radio will continue to be the “window to the world.”

TECH TALK: Leisure and Entertainment: Reading (Part 2)

If there is one regret that I have in the Reading department it is on the lack of new Amar Chitra Katha titles. I remember waiting anxiously for the next new title which used to come out every fortnight. Even now, a little ACK reading is a great way to relive India’s wonderfully rich history. ACK was how a lot of my generation learnt our history! ACK stopped publishing new titles many years ago and one can barely find 100 of the 450-odd titles in stores. The visual appeal of comics (be it ACK, Phantom, Calvin Hobbes, Tintin or Asterix) is still amazing.

The real transformation has not been as much on the Reading side as it has been on the Writing side. Because the Internet makes publishing so much easier, a new form of Writing is beginning to make a difference. Weblogs, written by individuals more as personal diaries, bypass intermediaries and reach consumers directly. Much the way this column does. Dave Winer on Weblogs:

  1. A weblog is personal — it’s done by a person, not an organization. You see a personality. It’s not washed-out and normed-up, the bizarre shows through. That’s why weblogs are interesting.
  2. A weblog is on the Web — it doesn’t get printed, it can be updated frequently, it’s very low cost to produce, and it can be accessed through a Web browser.
  3. A weblog is published — words flow through templates, the process is automated, the writer and designer are elevated. There’s also a possibility of using advanced writing tools, and syndication through RSS. In other words, technology applies to weblogs, publishing technology.
  4. And finally, a weblog is part of communities. No weblog stands alone, they are relative to each other and to the world. My weblog, (Scripting News) is part of the weblog community and part of the community of independent developers, particularly those using scripting environments. The same can be said of most weblogs that gain audiences, they connect people together using the Web through common interests.

While Weblogs aren’t about to transform the world of Publishing and our leisure-time Reading entirely, they offer an alternative and an avenue for each of us. Weblogs take us direct to the source and how a person is thinking – and in some cases, what the person has done during the course of the day. It is extreme personal journalism. But it also provides insights which are different and perhaps more down-to-earth than mainstream journalists. Weblogs are an outlet for people like you and me to bring forth our ideas and thinking. So, next Sunday afternoon, try reading someone’s diary! A good starting place is Weblogs.com.

TECH TALK: Leisure and Entertainment: Reading

Reading (after Idling) is perhaps the most common of leisure-time activities. There’s plenty to read around us: newspapers, magazines of all flavours and for every niche, comics, books. The Internet now provides an almost infinite treasure trove of reading material which would previously have been almost impossible to access. Search engines and hyperlinks open up magical worlds of information – enough to idle away a few hours.

The actual act of Reading by itself has perhaps been least affected by technology amongst all the leisure activities. Other than the computer where now some of the reading is done, we still buy books. If anything, the ability to search for books by one’s favourite authors, order them online and have them delivered to the doorstep can actually increase the reading done. Holding the book or the paper in hand is still the preferred form for reading. Yes, there’s talk of Tablet PCs and e-books which can change how we read, but that still seems to be a a few years away.

Reading as a leisure activity is not threatened. There’s still nothing to beat reading a timeless PG Wodehouse or Agatha Christie. Perhaps, the best thing to have happened in recent times has been the success of JK Rowling’s Harry Potter series. The unprecedented sales of the books (over 100 million) and now the movie has re-ignited interest in Reading worldwide. The ultimate Reading odyssey for me: JRR Tolkien’s “Lord of the Rings”. (The first movie in the trilogy is being released in the US in December). Writes Brian Carney in a recent article entitled “The Battle of the Books” in the Wall Street Journal:

Harry Potter and Frodo Baggins, Tolkien’s protagonist, will soon battle not only evil but also each other for the hearts and minds of a generation. If there is any justice in the world, Frodo should win.

Yes, Tolkien’s is the better story, but he deserves the laurel for another reason: He conceived of fantasy writing as a medium for moral thought experiments. “Harry Potter” may be entertaining, imaginative and wry. But it isn’t challenging. Morally speaking, Harry’s magical world is trite.

“Harry Potter and Philosopher’s Stone,” as the book was called in Britain — the U.S. marketers substituted “Sorcerer’s Stone” in the title — is a classic struggle of Good vs. Evil.Harry is good because he’s nice, and we can’t help sympathizing with him, since Voldemort killed his parents and all. This is very straightforward stuff, and there’s little to argue with in it. But there’s also little to argue for.

Tolkien delves deeper.Tolkien is doubtful of man’s ability to resist the temptation of absolute power. That is one of the great themes of the bookIn Tolkien’s world the temptation of evil is one that all, or nearly all, of his characters must confront. The argument of Tolkien’s tale — controversial, to be sure — is that, while intentions matter, the way we act is far more important than why we act. His story, for all its narrative brio, presents a serious rebuttal to the idea that good ends justify using evil means.

Don’t you feel like dropping everything and Reading The Book?

TECH TALK: Leisure and Entertainment: Driving Change

Technology is playing an important in the changing world of leisure and entertainment. The key drivers of this change are a mix of Digitisation, Networks, Devices, Broadband and P2P.

Digitisation ensures that data can be moved around so much more easily. Be it the music files or our own vacation pictures taken by digital cameras, data will continue going digital at an even faster pace in the coming years.

Networks (the wired Internet and the nascent mobile Internet) are ensuring an envelope of ubiquitous connectivity to deliver digital information anytime and anywhere. These new networks build on and extend the existing infrastructure created by the world’s telephone and cable networks.

Devices take care of the delivery to the end users, creating a platform for more personalised and interactive entertainment. For example, Apple’s newly introduced iPoD delivers the music you want, when you want it.

Broadband is slowly but steadily creating the platform for whole new business models, as it becomes possible to stream digital content to audiences worldwide.

P2P (Peer-to-peer or in this context, person-to-person) interactions are facilitating greater exchange of information between people – be it personal journals in the form of weblogs, music files, trading collectibles through online auctions sites like eBay, or distributing (mostly illegally) music and video clips. P2P also allows people to pursue their niche hobbies by finding communities of interest.

This combination of technology and distribution is facilitating key changes in leisure and entertainment.

Choice and Fragmentation: There’s just so much to do and so little time – this applies as much to work as to fun! We will explore 10 leisure-time activities in this series: Reading, Radio, Music, TV, Movies, Games, Internet, Indoors, Outdoors and Socialising. Lots of choice also means parallel processing, leading to a fragmentation in attention span.

Personalisation: Each one’s concept of leisure and fun is different, and the multitude of devices is making entertainment much more personalised. For example, when it comes to music, rather than listening to broadcast radio stations, it is now a lot easier to search and find the music we like, make playlists and play it back on our own MP3 players.

Interactive: Entertainment is becoming much more participative – from TV shows which invite viewers to shape the programmes and their endings to the avatars and their actions in the persistent universes of multi-player online games.

Work-Play Integration: Enterprises are moving towards becoming real-time, which means our responses need to be to. The deadly combo of the Internet, laptops and cellphones ensures that work can follow us on vacations everywhere on Earth.

Tech-centric: Technology plays a critical role now in fun times: whether it’s the preliminary research done through the Internet on movies, vacation spots, books and music, or marvelling at the tech creations like Monsters and Shrek (the two big animation movies of 2001).

TECH TALK: Leisure and Entertainment: Life’s Little Leisures

Leisure Time in India used to be so simple. Pick up a good book to read, or put the radio on and tune in to Vividh Bharati, Radio Ceylon or BBC, or watch Doordarshan, the only option available on television (remember Magic Lamp, Kilbil, Santakukdi, Chhaya Geet). In just half a generation, life’s leisure activities have changed so much. There are so many more options competing for ever shortening free time. A mix of digital technology combined with distribution via the Internet and delivery to the computer (or a gaming console) promises even more change in the coming years.

Leisure has always been an integral part of our life. (Remember: All work and no play makes Jack a dull boy.) What has changed in the past 10-20 years as we have grown up (the author is 35 years old so that helps set context), the notion of leisure-time and what we can do with it has changed dramatically.

Leisure and entertainment today is complicated. The choice of available books has gone up dramatically (thanks to online bookstores and courier services). Radio has gone from shortwave to FM to Satellite, offering amazing quality and options. TV offers over 50 channels of round-the-clock programming. For a cricket-crazy nation, this has meant live coverage of every international match played anywhere in the world. Perhaps the biggest breakthrough in television
has come with the increasing live coverage of many global events on both CNN and BBC: news packaged as entertainment.

The computer has also become a gaming platform. Then, there are the gaming consoles which now hope to become hubs for digital entertainment in the living room. New multiplexes coming up are making movie-going a much more elaborate experience. VCDs and DVDs are creating home theatres. Better roads, fancier cars, 5-day work weeks and increasing salaries are enticing more people outdoors for weekend getaways. Cellphones double as time-killers with inbuilt games and the ability to SMS family and friends at all times. Above all, the Internet has opened up vistas of information and entertainment seemingly unimaginable even a decade ago.

Better communications and more devices have ensured that work follows us wherever we go. So, take a few days off, and face the prospect of coming back to hundreds of emails and voice mails. Also, attention span has become a lot shorter and activities more multiplexed. When was the last time we spent a lazy (!) Sunday afternoon doing just one thing?