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Star is India\u2019s largest media and entertainment conglomerate, broadcasting more than 50 channels across 8 languages across entertainment, movies and sports. More than 700 million viewers tune in to the Star network every week to consume content. [1]<\/sup> However, the growing proliferation of mobile phones and the internet in India posed both a serious challenge as well as remarkable opportunity for Star.<\/p>\n More than a billion Indians already own a mobile device [2]<\/sup>, far higher than household penetration of television, which is around 60% [3]<\/sup>. More than one third of these consumers are already on the internet through their phones [4]<\/sup>, and this number is slated to grow rapidly with data costs dropping. One of India\u2019s largest conglomerates, Reliance Industries, has committed over INR 150,000 Cr (~$22B) into building infrastructure, through its ambitious Reliance Jio project [5]<\/sup>, and incumbent telcos like Airtel and Vodafone are not behind either.<\/p>\n The traditional set of competitors that Star experienced was rapidly changing. Rather than other media networks, studios and print companies, it was now competing directly with behemoths like Google and Facebook, not just for advertising dollars, but simply for consumer time and attention. It was imperative that the content which Indians had loved for decades, be available to them anywhere, on any device of their choosing.<\/p>\n This was harder said than done. Traditional media companies had always treated their digital arms as extensions, fearful of damaging their incumbent businesses. Yet, Star, thought differently. With the launch of hotstar, India\u2019s first professional over the top video service, Star was determined not to let the legacy business restrain the promising fledgling.<\/p>\n The company established their digital entity as a separate business (legally as well as culturally \u2013 hotstar employees had their separate domain ids and were housed separately), but the company instituted a complex transfer pricing, through which hotstar paid for content purchased from the parent company.<\/p>\n The business proposition was simple \u2013 any viewer of Star content (Star produced 16000+ hours of entertainment content and 5000+ hours of live sports annually), should be able to access the same on mobile devices. Although conceptually simple, the company had very little experience in this area and challenges were galore. Should we create this in house or outsource it to a technology player? How do we find the talent required to run this business? And very importantly, how do we monetize this opportunity?<\/p>\n Star started by realizing that building an in house team would take a long time. Eager to cash in on the opportunity early, the team decided to outsource product and engineering to Accenture (AVS) [6]<\/sup>. While continuing to bolster internal management on one hand, with the eventual goal of moving the product in house, the hotstar team working with AVS was able to deliver a clean product with basic functionalities in time for the launch of the ICC Cricket World Cup 2015. More than 38 million unique visitors watched the games on hotstar over the course of the tournament with a single India Pakistan game garnering more than 25 million views [7]<\/sup>.<\/p>\n While the viewership was a resounding success, monetization still lagged behind. The team quickly realized that the same sales force which had sold television spots brilliantly for years, would not be able to sell advertising on the internet. Moreover, the space was constantly being innovated upon, with pre rolls being substituted for banners, mid rolls being squeezed and dynamic pricing and programmatic advertising coming along. The monetization was still focused on advertising as the company believed, given how high data costs were in India, subscription was not a viable option. Given this trajectory, the company roped in a top executive from Hulu [21CF which owns Star has a stake in Hulu] to lead the product effort in house. [8]<\/sup><\/p>\n The greatest challenge for the company has been realizing that unlike television infrastructure, which once established requires no intervention for decades, this game is as much about the content as it is about the product. Versions and upgrades were the way to go in this sector and the team had to commit large sums of money into product and development, a hitherto missing line from the P&L. This required not only a change in strategy, but a different cultural mindset as the company now needed to hire engineers and specialists in product design, recruiting form the same pool that Tech giants were looking at.<\/p>\n Earlier this year, hotstar launched their premium service, a paid tier at INR 199\/month (~$3), with access to premium English content (including all of HBO content) and access to live sports (free feed was delayed by 5 minutes for regulatory reasons). [9]<\/sup> Only time will tell if the media behemoth will be able to successfully morph into a technology company, but the first shoots are promising. <796 words><\/p>\n References<\/p>\n [1] http:\/\/www.startv.com\/aboutus.aspx<\/a><\/p>\n [2] http:\/\/www.forbes.com\/sites\/saritharai\/2016\/01\/06\/india-just-crossed-1-billion-mobile-subscribers-milestone-and-the-excitements-just-beginning\/#17b33f5f5ac2<\/a><\/p>\n [3] https:\/\/home.kpmg.com\/content\/dam\/kpmg\/pdf\/2016\/04\/The-Future-now-streaming.pdf<\/a><\/p>\n [4] https:\/\/dazeinfo.com\/2016\/02\/08\/mobile-internet-users-in-india-2016-smartphone-adoption-2015\/<\/a><\/p>\n [5] http:\/\/www.livemint.com\/Companies\/ncT04NLRTtEMDEHAWdMPGN\/Reliance-Jio-initial-investment-at-Rs150000-crore-Mukesh-A.html<\/a><\/p>\n [6] https:\/\/newsroom.accenture.com\/industries\/media-entertainment\/accenture-video-solution-helps-star-india-to-inspire-a-billion-imaginations-delivering-seamless-online-and-mobile-video-to-one-of-the-worlds-largest-entertainment-markets.htm<\/a><\/p>\n [7] http:\/\/lighthouseinsights.in\/star-sports-hotstar-content-marketing.html\/<\/a><\/p>\n