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I’ve reached a point where if I scroll through Reels (and lately, YouTube Shorts) too much, I end up listening to the same snippet of the same song one too many times. It’s like the extreme version of an earworm—one tune boring through your mind, probably accompanied by the same dance/meme format until you just can’t take it anymore. 

But I’ve also found joy in looking up that snippet and streaming the song in full on Spotify (and then probably also discovering a ‘slow+reverb’ version on YouTube). Reels, Shorts, even Moj have become the fastest way to discover new music for Indians, in the absence of TikTok. 

So, nearly three years since the ban on TikTok in India, how much have short-video apps, especially homegrown ones, acquired attention and market share? 

Today’s story takes a look at how TikTok copycats are faring in India, and the role music licensing and marketing have played in their progress (or lack thereof). 

A game of musical chairs

The promise (and threat) of short-video apps has always been in its ability to influence music. TikTok, despite regulatory backlash worldwide, has become the most important tool for musicians and music labels to have their tracks discovered. And this is expected to continue. This March, TikTok launched a music marketing and distribution platform called SoundOn. 

In India, ByteDance’s business has been decimated since the TikTok ban of 2020. But it does have a presence in music streaming via sister app Resso. Resso combines music streaming with a bunch of social features, including a short-video-like endless stream of live lyrics, gifs, and video clippings set to music you can swipe through, just like TikTok. 

Until 2021, Resso was growing at a scorching rate, beating Times Internet’s Gaana and Reliance’s JioSaavn in the number of monthly streams. Now, that growth may have moderated. A former senior music industry executive told The Impression that Resso is now struggling to hold on to its user base in India because it has been locked in licensing cost negotiations with music labels for over a year. 

“Without a clear path to monetisation, they are finding the current market scenario here unsustainable,” the executive said. “And that’s why they’re negotiating quite aggressively.” Globally, too, Resso is struggling with a loss in music licences; it had launched in 2020 without the Universal Music library, and Sony pulled its catalogue from the app in September last year. 

Meanwhile, Indian homegrown apps (along with Instagram’s Reels and, now, YouTube Shorts) have had nearly three years of a TikTok ban to grow and solidify their base, especially in the music market. Yet, they seem to be lagging behind, as music marketing campaigns move to Reels and Shorts. 

Both platforms have been running campaigns to boost music marketing on their platform. Instagram introduced “#1MinuteMusic” pop-ups last June to help creators launch their original music (and videos) in a one-minute Reel or Story shot with Meta’s help. These one-minute music tracks were available for use in short videos only on Instagram Reels and featured artists from top labels, including market leader T-Series. Incidentally, T-Series also launched a Hindi version of the Sri Lankan hit sensation Manike Mage Hithe on YouTube Shorts in October last year, marketing it with the #ManikeMove dance challenge.

Reels and Shorts can sustain the growth phase because they have the apps’ main content to rely on for audiences. In fact, it’s hard to find user engagement data of Reels and Shorts specifically because the features are embedded in the apps. But as we wrote last year, while Meta feels Instagram is its winning product in India after the introduction of Reels, YouTube Shorts is more worried about closing the gap after being the late mover by offering very compelling monetisation opportunities. 

For now, creators (including music labels) are struggling with gaps in YouTube Shorts’ functionalities that prevent them from running a successful dance challenge or marketing campaign. These include songs that are inexplicably unavailable for use to create a Short, and an algorithm that cleaves the YouTube and Shorts audience so neatly that creators often don’t get reach on their short videos. 

But the homegrown short-video apps are running on a different storyline. 

“The problem with Josh, Chingari, and others is that they are unable to sustain growth because they can’t afford to keep licensing large music libraries,” a senior executive at a short-video app told The Impression, requesting anonymity. “Without these licences, you don’t have the music that people want to make videos on. Those viral challenges and dances and videos don’t happen.” 

Music licence deals with short-video apps and streaming platforms usually last a year, sometimes two if it's a particularly large deal. According to the former music industry executive quoted earlier, large music labels, including T-Series, Sony Music, and Zee Music, licensed their libraries to TikTok copycats in 2020 for “really cheap”, sometimes as low as $1 million for the entire shebang. 

This was for two reasons: one, with TikTok just gone, music labels were keen to nurture alternative short-video apps. Two, they knew homegrown apps did not have the kind of money TikTok and other global tech giants came armed with.

“The industry licensed music to everyone, from ShareChat to Resso to Josh. And we gave it away for cheap,” the executive said. 

Then, when licences came up for renewal, some venture-capital-backed firms found they could not afford to spend on all that music anymore. Already, the likes of Moj, Josh, and Chingari are racking up losses as they spend heavily on “business promotion” and app development—essentially advertising their platform and paying creators to stay on and make content for them. 

VerSe Innovation’s revenues are primarily from its main business - news aggregator Dailyhunt. But its high expenses (and losses) reportedly come from its investments in Josh, per The Morning Context. Similarly, Mohalla Tech earns more from the main ShareChat business, even as it scales up Moj; the Sharechat business is expected to earn an operational profit this fiscal year, the short-video app executive quoted above told The Impression. 

Moj has had several brand campaigns from FMCG companies such as PepsiCo and Nivea, and even held live sessions with well-known musicians Amit Trivedi and Neha Kakkar, but it has not seen a major music marketing campaign from a top label in recent times. 

Then, there’s Chingari. It has repeatedly faced off with music labels for making music available to their users without a licence, both executives I spoke to said. “They would get hit by takedown notices again and again because they would keep trying to use music tracks whose licences had expired,” the former music industry executive said. 

Labels, of course, have technology to help them track such copyright violations very easily. The most commonly used is Automatic Content Recognition (ACR), a technology that assigns a unique fingerprint-like code to music and can identify it in user-generated content like, say, a viral dance on a short-video app. ACR is what apps like Shazam use to identify a song playing around you. 

Homegrown short-video apps may not have music to rely on, so they have been looking to other monetisation models, but with little demonstrable success (money). Moj launched live commerce and video commerce in partnership with Flipkart and Dukaan, but is going slow on that project after it conducted a big round of layoffs earlier this year. 

In April 2022, Josh’s parent VerSe Innovation raised a massive $805 million, but then laid off 150 employees and instituted salary cuts (which have been reversed now) by the end of the year. Roposo, acquired by Glance (InMobi), first pivoted to live commerce and is now building livestream entertainment on phones’ lock screens. And Chingari has moved inexplicably into crypto, launching a ‘Gari’ token with actor Salman Khan in October 2021 that crashed spectacularly in July 2022. 

And music licence deals can be a tricky matter, as Spotify found out in India. Zee Music refused to renew its deal with the music streaming platform, robbing its users of several hit Bollywood albums. It did, however, sign multi-year partnerships with Meta and Google last week. 

So, who in India is really inheriting the crown that TikTok left behind three years ago? Reels could, certainly, and Shorts will probably be in the race as well, given YouTube’s legacy of music partnerships in India and globally. 

The rest, for now, are searching for a path to sustenance. Is this battle for music licences making it harder for them to win over their Big Tech counterparts? The former music industry executive doesn’t think so. “Success, failure—it all essentially comes down to product [design, engineering, and experience].” 

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AI Bangers: I was going to embed a video of this song featuring Drake and The Weeknd, but it was taken down. Why? Because it’s completely synthetic, written by a Tiktoker and then generated using AI. Here is a great demo of how to do it. Music labels are rushing to control the incoming flood of AI-generated music. Last week, the Financial Times reported that Universal Music Group had written to music streaming platforms, including Spotify, to act aggressively against AI-generated songs scraped from their copyrighted music. It might also begin licensing music to these AI tools, per The New York Times. Who owns the rights to AI-generated music anyway? This NYT piece rounds up early legal opinions on the matter. 

Sharing is caring: Netflix announced mixed quarterly earnings yesterday. It added 1.75 million subscribers, lower than analyst estimates. The company said it’s also going to start cracking down on password-sharing in the US after a successful pilot of a paid password-sharing service in Latin America. But it’s also delaying the rollout to iron out problems in the sharing process. Oh, and it’s shutting down its DVD-by-mail service, its OG disruptive line of business. 

Chicken-and-egg problem: Despite massive growth in English film box office collections, IMAX and 4DX screens aren’t getting enough content to justify setting up new screens in India, per Livemint. Few Indian films are spending on VFX or the IMAX format; and even if they do, they usually release a 2D version as well. But then, until more IMAX and 4DX screens come up countrywide, producers won’t have an incentive to shoot in these formats. PVR is IMAX’s largest partner in India; last reported, there are 17 IMAX screens in the country. 

Secret sauce: While researching today’s story, I stumbled upon this (long) Twitter thread that investigates what makes a YouTube Short go viral. Author Paddy Galloway studied 33 YouTube channels with 5,400 Shorts and discovered a few basic rules: (a) make longer Shorts (50-60 seconds) and make sure they can hold your attention, and (b) engagement metrics such as Likes and Shares don’t seem that important. Oh, and if you’re a ‘big’ (>1m subscribers) account, Shorts will convert way more viewers to subscribers. Now that’s something. 

Bye Bye Birdie: Invesco’s finally putting its tumultuous investment to bed. This week, the strategic fund sold the remaining 5.11% of its stake in Zee Entertainment Enterprises for ₹1,004 crore (~$122.4 million) in a bulk deal. Invesco had gone to court against Zee in 2021, demanding the resignations of chief Punit Goenka and two other non-independent directors in an attempt to protect minority shareholders from alleged corporate governance misdeeds. This is a handy refresher on the case. Zee and Sony India are also in the midst of closing their merger, led by Goenka. 

Eye of the storm: Indian TV viewers were served a disturbing series of events last week. Two arrested gangsters were shot down in Uttar Pradesh, allegedly by their rivals, on live TV. This story by Newslaundry features interviews with TV reporters, camerapersons, and stringers who were at the scene reporting live, with flying bullets just scraping past them. Some were injured. Incidentally, the suspected shooters posed as mediapersons to get close to their victims.
 

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Trumpet 🎺

You’re seeing this video on an unofficial YouTube channel because its creator, Food Pharmer, was forced to take it down from his social media and replace it with an apology. Revant Himatsingka uses his Instagram to walk viewers through the nutrition labels on common packaged food (along with other health and wellness information). Here, he pointed out that Bournvita’s labels show the product is full of sugar. 

Executives at Mondelez India, which owns Cadbury Bournvita, are probably looking up the term ‘Streisand Effect’ right now. The company got Himatsingka to post an apology on his Instagram after serving him a legal notice. They followed it up with a post about Bournvita’s health benefits, posted twice in static and gif media for good measure. They’ve also turned off comments ever since users began posting lines from Himatsingka’s video, including “Taiyari Diabetes Ki” (prepare for diabetes). 

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That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you. 

Thanks for reading, and see you again next Wednesday!

If you’ve already subscribed to The Impression, first of all, thank you! Do note that if you’re also signed up for The Signal, you may receive this and the next two editions of this newsletter twice. Please bear with us. If you like what you read, hit the button below to subscribe now—it’s free!

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I’ve got two short stories for you today. 

The first is about the fight over streaming rights for top Indian language originals (films and series). So many top platforms (Amazon, Netflix, Disney+ Hotstar, SonyLIV, Zee5) are announcing massive content slates in Telugu, Tamil, Bangla, Marathi, and more. How are regional language OTT platforms holding on? 

The second is about markets regulator Sebi’s action against financial influencers and others offering investment tips and tricks on the internet. Can it win this game of whack-a-mole?

Let’s get right to it. 

Buffering: How Regional OTTs are holding on

̛I grew up with Hindi dubbed versions of the biggest Telugu and Tamil films on TV, but my first brush with subtitled films was the erstwhile UTV World Movies TV channel that aired films from around the world. Now, of course, subtitles are indispensable for many of us. I can’t follow dialogues without enabling them, and it looks like this is a global trend. 

Why are we talking about subtitles and dubbing? Because India’s films and streaming businesses are booming with dubbed-and-subbed content of other Indian languages. Take it from PVR, India’s biggest multiplex chain (which is in the process of merging with the second biggest, Inox). In its investor presentation for the quarter ended December 2022, the company pointed out that only non-Hindi Indian language (or regional) films have grown their box office collections between 2019 and 2022 (pdf). There were 17% more non-Bollywood films released, and gross box office collections for the industry (as per PVR’s estimates) grew 30% in these three years to ₹5,830 crore (~$710 million). Hindi and English movies both declined in this period when it came to the number of films released and their box office earnings. 

Naturally, streaming platforms have begun bidding for digital rights to these films. They’re also spending money on massive content slates in languages like Tamil and Telugu, with a healthy dose of Marathi, Bangla, and, more recently, Kannada and Punjabi. Zee5, for instance, announced 80 titles for its Telugu originals slate in 2022. It also got the original Telugu version of mega-hit RRR (the Hindi dub went to Netflix). Amazon Prime, an early strong contender in Indian language content, snapped up big Tamil and Kannada films, including Mani Ratnam’s Ponniyin Selvan-1 (which it first offered on rent before streaming it for subscribers), and super-duper hit KGF parts 1 and 2. In fact, all the biggest recent hits in Southern languages are available to watch on one of the top national or international streaming platforms. 

So, what of the regional streaming platforms? Many such as Hoichoi (Bangla, 2017), aha! (Telugu, 2020), Nammaflix (Kannada, 2020), ManoramaMAX (Malayalam, 2019), Sun NXT (Tamil, 2017), and others are backed by well-known producers, actors, or studios of their respective language industries. While that helps them retain digital rights for any big film released by their parent firm or starring their brand ambassador, these platforms generally don’t have the cash needed to bid against an Amazon or a Netflix and acquire the biggest theatrical hits. 

“Initially, the industry was different. Each movie was identified by its region. Sairat changed Marathi movies, and now we can say it is an Indian movie,” Nammaflix founder and CEO Vijayprakash told The Impression over a call. “Now, storytelling is different. Cultural differences are coming up now [as a form of storytelling]. But regional platforms cannot spend on big content or titles such as Kantara, and will eventually require more investment. Conversely, big movies struggle to get a return on investment.” 

Instead, these regional-language OTT platforms are counting on higher engagement with their existing, native-speaker audience by making a ton of original series and films in their language of choice. Many are also expanding into other languages. Chaupal, for example, began with Punjabi language content. Last year, it launched Bhojpuri language originals as well, with actor-politician Manoj Tiwari in attendance (Hindi link). Similarly, primarily-Telugu app aha!, which calls itself the “100% local OTT platform”, expanded to Tamil content last year. It has other languages in the pipeline, including in North India. Among its best-performing originals is reality TV show Telugu Indian Idol (of the Fremantle ‘Idol’ series), sitcom #BFF, and a slew of original films, including Intinti Ramayanam and Sathi Gani Rendu Ekaralu. The platform is also considering introducing short videos, gaming, and some elements of commerce to the app to keep a hold on its audience, company director Ajit Thakur told the media in a press conference last month. 

LIke I wrote last week, bundling is a crucial tool for these platforms to get their content discovered and acquire a new audience. Of course, that means weaning off of that dependence will take time. But by consistently investing in series and digital-only films in one or a few Indian languages (along with acquiring the occasional major theatrical release), regional OTTs can win the long game over their bigger counterparts. They’re fighting many (language and format) battles at once; the regional players need only put all their attention and energy on wooing their linguistic home base. 

Regulators move against ‘finfluencers’

They’ve had a good, mostly uncontrolled run on social media  But looks like regulators are finally acting against ‘finfluencers’ and their so-called financial advice. I want to draw your attention to two recently passed Sebi orders. The first is a set of two orders passed against listed companies Sadhna Broadcast Ltd and Sharpline Broadcast Ltd. Sebi found that the promoters of both companies were using YouTube channels dedicated to stock tips in a classic pump-and-dump scheme. Sebi ran a year-long investigation, including going through phone call transcripts and mapping all connections among the accused.

The second, passed last week, lays down an advertisement code for investment advisors (IAs) and research analysts (RAs). These are pretty comprehensive rules, covering what registered IAs and RAs can and cannot say in all forms of media, including messaging apps (think Telegram groups for stock tips) and social media platforms. It specifically calls out a few trends among ‘finfluencers’, many of whom are Sebi-registered advisors, including sharing model portfolios and offering ‘free’ research and analyses to attract investment clients. Registered folks, at least, can no longer do that. They will also have to include disclaimers in most of their content, and they can’t advertise their past performance or even use the Sebi logo to reassure prospective clients. Sebi will also need to approve any ads by a registered IA or RA.

Besides these, the National Stock Exchange (NSE) issued a few warnings against people offering stock tips with guaranteed returns, including one against a Telegram channel called ‘parasnathcommodity’ (pdf).

‘Finfluencer’ content on social media, including stock tip groups on apps like Telegram and power trader accounts on Twitter, are a scourge. They’ve intensified since the 2021 bull run and are perhaps second only to the ubiquity of ‘health and wellness’ influencer content. By the way, the consumer affairs ministry is working on rules to clamp down on misleading ‘health’ content from these wellness influencers. 

The Advertising Standards Council of India (ASCI) had issued social media influencer guidelines back in April 2021 (this is a good legal summary of those guidelines). It followed up a year later with another set of guidelines for influencers pushing crypto and NFTs. 

The problem is that ASCI’s guidelines, while respected, are not really legally enforceable. ASCI does issue a list of influencer accounts and brands that aren’t complying with their guidelines. But they (and other regulators) are engaged in a game of whack-a-mole. Stop one influencer with a crappy crypto and stock investment channel, and four more will crop up. Sebi action is more serious, and these series of orders along with warnings from the NSE might do a better job of putting naive investors on their guard. And their investigations will probably be more effective at deterring would-be ‘finfluencers’ on their way to the next scammy Telegram channel.

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Merging: We finally have a name for the merged version of Discovery+ and HBO Max. It will be called… Max. The New York Times reports that the combined service will launch in a month or two in the US and cost $16 a month (same as HBO Max right now). All of HBO’s iconic shows, from The Sopranos to Succession, will stream on this platform.  

Judging: We talk a lot about what platforms have our favourite shows and films, but the bigger question is: what app has the best user interface? Variety spoke to writers, directors, producers, and others in Hollywood to assess the best and worst of streaming app UXs. The verdict: Netflix has the most seamless interface, and so its features are often the most plagiarised. Amazon Prime Video may be the worst-designed streaming app ever. 

Trying: The Uttar Pradesh government’s attempt to build a film industry centre rivalling Mumbai is falling flat. UP had announced the ₹10,000 crore (~$1.2 billion) project to be built in Greater Noida in 2020. The first bid in November 2021 got only one response. Another round of bidding in 2022 also flopped, and now the government is reportedly reworking incentives and contract terms before floating the tender a third time. So far, the biggest Bollywood name attached to the project is KC Bokadia, who produced, directed, and wrote several major ‘90s Bollywood films. 

Fighting: Match Group, the owner of dating apps such as Tinder and Hinge, along with the Alliance of Digital India Foundation (ADIF), has alleged that Google is flouting an antitrust order to make its in-app purchasing process fair and competitive. The Competition Commission of India had ordered Google last October to allow apps on its Play Store to use third-party billing instead of forcing them to go through Google’s payment gateway. Now, the plaintiffs say Google is making up for lost revenue by charging them a massive service fee on third-party billing. 

Changing: Google CEO Sundar Pichai gave The Wall Street Journal a detailed interview on what he thinks the future of Google looks like. Particularly interesting are his remarks on how Search will change with the advent of AI chatbots such as Bard. One example Pichai offers: “Would you have considered asking, “Google, help me write a poem?”” 

Saving: YouTube-focused adtech firm Channel Factory has come to India. Channel Factory sells technology solutions that help advertisers figure out what content on YouTube is best ‘aligned’ with the audience they’re chasing. The company claims that up to 28% of ad spends on YouTube are wasted because the ads are on the wrong kind of content. 

Shining: Older actors are getting their spot in the sun. This story in The Economic Times traces the recent rise in prominence of older faces in Bollywood. Actors like Gajraj Rao, Neena Gupta, Shefali Shah, and Pankaj Tripathi are increasingly playing the main character in OTT shows as well as mainstream films. There has also been an “exponential change” in the fees they’re charging, much more in line with their younger A-lister counterparts. A recent Hollywood reminder is the highly-celebrated Better Call Saul, where almost all the main characters are played by 50+ year-olds. 

Trumpet 🎺

Some beauty brands in India have traditionally been seen as barometers of popularity. Being the ‘Lux girl’ was what made a Bollywood actress a certified A-lister in the pre-social media days. And even today, brands of Hindustan Unilever and the L’Oreal group (the biggest personal care companies in India) make or break celebrity status.

Yesterday, Maybelline India announced its newest brand ambassadors, with some expected and unexpected faces. Suhana Khan, daughter of Bollywood superstar Shah Rukh Khan, is among the four, as is heiress (and aspiring singer) Ananya Birla. But Maybelline has also roped in badminton champion PV Sindhu and Sikkimese police officer, boxer, and model Eksha Kerung as brand ambassadors. Sindhu and Olympic champion Neeraj Chopra were the only non-cricketers in a recent list of Indian sportspersons with the highest earnings from brand endorsements. 

That’s all this week. If you enjoyed reading The Impression, please share it with your friends, family, and colleagues. And please write to me anytime at soumya@thesignal.co with thoughts, feedback, criticism or anything you’d like to see discussed in this space. I'd love to hear from you. 

Thanks for reading, and see you again next Wednesday!

Dear reader,

First up, a big thank you for being a loyal reader of The Signal, The Intersection, and our spinoff product—The Playbook. 

After the resounding success of my colleague Jaideep’s weekly business of sport and gaming newsletter, The Playbook, we’ve been mulling over launching another specialised newsletter that offers sharp insights and the right perspective on an industry that matters to you.

Which is why, I am super stoked to announce The Impression, another weekly newsletter product from our stable that will do exactly this for the business of content — media, entertainment, advertising, and everything in between.

The Impression will be authored by Soumya Gupta, who recently joined us from The CapTable, where she wrote on streaming, social media, and digital advertising. You’ll get it every Wednesday at 3 pm, starting this week. Save the date—April 5! The Impression is, and for the foreseeable future will be, free to read. 

It’s hard to clearly define what the business of content is. Everything has an element of media, every element has a bit of advertising in it. People, companies and, now, even artificial intelligence is generating content—a lot of it. Making sense of how this wide, disparate business will come together and grow is extremely hard. 

India’s media & entertainment industry is among the world’s largest and everyone wants a slice of it because we have the biggest audience in the world freely up for grabs. FICCI estimated this industry was worth ₹1.61 lakh crore ($19.4 billion) in 2021; and while older forms like television remain the biggest, relatively newer businesses like streaming, social media, and new tech-enabled formats are collectively becoming larger. So while merger partners Sony and Zee are figuring out how to manage not just their legacy TV businesses but also their newer streaming platforms, YouTube and Instagram are duking it out on who will capture the vertical short video business, something we told you last year!

One would think the fight over advertising revenue is somewhere between Meta, Google, and Indian TV studios. But literally everyone, from TV makers (Samsung) to grocery delivery companies (Amazon, BigBasket) to your cellphone operator (Jio, Airtel) to anyone with some content and a space to sell, is now in the business of ads. 

It’s a lot, but we’ve got you. This is exactly where The Impression comes in. Soumya’s deep reporting and incisive analysis will give you everything you need—news, views, and signals — to stay updated on this sprawling, ever-mutating business. 

You can write to Soumya at soumya@thesignal.co with tips, suggestions, praises and (hopefully) occasional brickbats. She can be reached at @bytesofnews on Twitter. Also, do follow Soumya on LinkedIn, where she posts regular reacts and takes on everything going on in the business of content.

Oh, and one last (and important) thing. We respect the choice our readers make. Hence, as a policy, we will not send you our newsletters unless you choose to subscribe to them. All The Signal readers will receive the first four editions of The Impression. It will become an opt-in newsletter thereafter, which means you’ll need to sign up separately to receive it.  

I look forward to having you on board as dedicated readers of The Impression, starting this Wednesday!

Warm regards,

Venkat Ananth
Co-founder and CEO, The Signal
@venkatananth