Over the past year, several young founders boasting impeccable academic credentials and work experience have been moving to small town India, launching hyperlocal news apps funded by venture capital firms (VCs), like LocalPlay, Lokal, Awaaz, and Circle.
LocalPlay is focused only on Moradabad, Circle gives you news about Agra, Mathura, Vrindavan; Lokal focuses on three districts across Telengana and Andhra Pradesh; and Awaaz across Uttar Pradesh. All are non-English and primarily use video snippets.
Smartphones and Reliance Jio driving content
Traditionally, Indian hyperlocal news has been the backwaters of print and regional TV.
There wasn’t a serious business model for the largely ad-led nature of our media business, which meant any product catering to rural small town readers was unattractive for advertisers. Given this, it is interesting to see the sudden surge of interest in hyperlocal vernacular video news apps.
What has changed that we are seeing a number of startups emerging in this space? Two recent inter-related trends matter: spread of smartphones, which total about ~380 million at last count, deep into India2 (my short hand for the less-affluent non-English speaking India), and the Jio effect, which has seen data prices fall by a tenth, and over tenfold rise in data consumption since its launch.
India2 doesn’t consume much text, instead it gorges on video.
Increasingly, short-form video content has emerged as the dominant media unit of India, spurring the emergence of homegrown social networks such as ShareChat, Clip, and Mooshak, as well as the rise of news aggregators such as DailyHunt, NewsPoint and NewsDog.
And now they are driving the rise of hyperlocal news apps built around video.
Monitoring, monetizing challenges
The short video content in these apps is typically supplied by newspaper / TV “stringers”. They are paid ₹50-250 per video, though the odd likely-to-go viral video may well be purchased for a higher amount.
Supply is not an issue —there is enough free content as well, which however needs to be authenticated, and “produced” or upgraded for release.
A start-up I spoke to estimated their annual cost for sourcing, authenticating, producing and distributing content (20-25 videos per day) to be close to ₹40 lakh a year per district.
The authentication part is critical, given what we see with the spread of fake news and rumours across Whatsapp and Facebook, especially with elections around the corner. The other business challenge is monetization. This isn’t a cause of worry for now, because the venture capitalists are pumping money for the product, which is free to consumers. All of the hyperlocal players believe that at some point that they will be able to monetize their audiences through advertisements.
I am not so sure, because in India, there has always been a considerable discount for vernacular audiences.
The author is the director, of Blume Ventures