MySpace launched its operations in India in May last year. About one year after the establishment of its India office, News Corp’s social networking site claims to have attained over 2 million users in India. The number is certainly small when compared to other established social networks such as Facebook or Orkut which are expanding the user base in the country by launching in regional languages. MySpace's latest initiative in India is that they are taking their online users offline by engaging them in different meetups like movie screenings, music shows etc.
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VCCircle spoke to the Country Manager of MySpace India, Hari V Krishnan. Krishnan, who has an MBA from INSEAD in France and a Masters of Science degree in Telecommunications from the University of Colorado, has worked in the areas of corporate planning, strategic alliances, product management & marketing with companies like Cisco Systems and Yahoo!. Excerpts
How is the MySpace business doing in India?
It’s been doing really well in the last 3-4 months. We launched in India in April/May of 2008. We spent all of last year building up the team and started executing and rolling out products around late last year.
We started doing activities with Star TV with ‘Nach Baliye’ (a popular daily soap on Indian television) . The execution on a mass scale started in January this year. So we have done a couple of movie screenings, which are called Black Curtain Screenings and are done exclusively for MySpace users to see the movie before it really comes onto the theaters.
While we have done two of them in Mumbai, the others are going to be in the different parts of the country. In Mumbai, we did Slumdog Millionaire and Valkyrie. The next one is going to be X-Men and will be screened as soon as things settle between the producers and the multiplex owners.
We also have partnerships with Fox Star Studio and Warner Brothers India - all of which have official pages on MySpace. We have also been doing a lot of interesting things with music. Recently, we started a campaign called India Fights Back. It is connected to the elections. We also have a number of celebrities who blog on MySpace – people like Vishal Dadlani, Farah Khan etc.
So do these celebrities blog on MySpace out of their own choices or do you have them on board for this?
No, we don’t pay anyone to blog. Globally, celebrities like Britney Spears and Tom Hanks have been blogging on Myspace out of their own will. So on MySpace, you can sign up a musician, actor, film maker, comedian or a regular user and based on what you sign up as, we make different tools available to you. The latest celebrities to blog on MySpace are the twins - Raghu and Rajiv, the producers of MTV Roadies (a reality show on Indian television).
Priya Dutt’s official blog is also on MySpace. We have told everyone not to take a political stand and instead bring up an issue that the youth should care about. We chose these people because they all in their own way influence youth and they have educated opinion on issues.
We also do a lot of ground events. So in conjunction to the India Fights Back campaign, we did an event in which we allowed the youth to go up on a platform and talk about their political views. So all these videos are now available on MySpace.
So as a result of all this, when we launched last year we had around 200,000 India users in May last year, most of them were musicians. In India itself, we have around 4000 bands that are live on MySpace. As of last month close to 2 million users come to MySpace. This is rowing between 20%-30% month on month.
So what is the total number of users on MySpace in India?
I don’t have an official number that I am allowed to quote but it is just under 2 million.
Apart from events, how is MySpace as a social networking site doing?
Well, it is doing extremely well because I think they both go hand in hand. We don’t claim to be an event management company or anything like that. What we believe is that especially in India social networking is where you catch up with friends and where you make new friends. So when you are catching up with friends, you are basically taking your offline friends network online.
What we are saying is that when you are on MySpace or any other social networking site, you are making new friends as well. But they generally tend to gain only online friends but by doing some of these events, like film screenings etc, we allow you to take your online social network offline.
We have now partnered with the Rolling Stone Magazine, which is doing a Summer Rock Tour. Their official homepage is too on MySpace.com. MySpace is positioned as a social portal and not as a social network. The difference is that while we do have a social networking functionality and in that we have some of the best product features, we do have a strong portal like functionality- we do host videos on our site. Videos are not usually hosted on third party sites. MySpace Videos has the second most videos in the world behind youtube.com. So it is a very powerful video player. We have the largest audio streaming music platform in the word- MySpace Music. We have a large original content that is made only for MySpace and that sits on MySpace.
Also a lot of Indian bands have been launching their albums exclusively on MySpace. In the recent past, bands like Jalebee Cartel, Thermal And A Quarter have launched on MySpace.
What was the whole idea behind launching in India?
The idea was very clear. MySpace, like I said, is a social portal so you got to have localised content, localised partnerships when dealing with content owners – whether it is music labels and film studios etc.
For that to happen, you got to have a local office. You can't be sitting in Los Angeles or London and managing an outfit in India. We also understood that the needs of Indians are very different. For example, we have a very active mobile product. Our mobile product has grown by 50% in India in the last 6 months alone and that is because of some of the deals that we have done.
We have recently done a deal with virgin mobile and we are close to announcing a couple of others. How Indians access the internet is different from how Japanese or Americans do. So unlike some of our competitors when we see a market that has a potential to really grow, like we believe India does, we put a team on the ground.
In India we have put together a team, but we are not hiring insanely. We have hired fantastic talent from companies such as Google and Yahoo and MTV and from leading startups and mobile VAS providers. We have about 15 people in our organisation. So now we have the ability to go out and execute and make it happen. But we will not build a fat team but at the same time we do believe that we need a team in India to localise and make things relevant to India like the India Fights Back campaign.
How are you coping with the competition from Facebook, Orkut and other social networking sites?
At MySpace we are very clear that we measure our success on multiple grounds. One is the number of users. But we are not only just interested in having the largest number of users, we are also very much a business. Last year around October 2008, e-market had done a report which said that out of the total revenue that goes to social networks globally, 60% of it goes to MySpace. And this is in spite of one of our competitors having more users than we do.
So we have over 130 million active users globally. It's not a small number at all and in India this number is growing very fast, we already have around 2 million users and we are growing 30% month on month. Honestly, what we speak about is how many people are there and how much time do they spend on the site and how much money can we generate as well - we are a business.
The way we work with advertisers is such that the users see some value. We don’t just do banner advertising and look for click through rates or anything like that. We do some creative advertising initiative where the user also gets some value. By doing things like these, our advertisers get better value for their marketing rupee and also the end consumer is not upset. We have two kinds of customers – one is the end consumer and one is the advertiser and MySpace as a business has always been profitable.
So is it profitable in India?
In India it is not profitable as yet but there is no start up that I know of that in the second year is profitable. But we are growing revenues and have already booked a lot of revenues. I can’t declare numbers separately.
By when do you think you would break even in India?
I would say that it would probably take another calendar year to break even but I think that is not the only metric by which we grow. We see our engagement numbers growing, meaning the amount of time each user spends on the site, the number of friends that each user has. So we track all of these things more closely than the absolute number of users or the absolute number of dollars or rupees. So I think everything is growing strongly in India but its still relatively early days and the numbers are still relatively small.
So do your users have to pay for these events that you organise? What is your revenue stream?
No, they are absolutely free for MySpace users. We make money from the events through sponsors. We make money through advertising. That is our primary revenue stream. We have a strong advertising that goes online, offline as well as on the mobile. And that is doing very well. We do not have any subscription based revenue online at all. We are exploring other business models. For isnatnce, certain content could be available for a certain payment but we will never make the access to the site or the access to the events paid.
There are reports that even Facebook which is one of the most popular social networking sites is finding it difficult to make good revenues primarily because it too has a revenue model based solely on advertisements. So how do you plan to grow in terms of revenues considering this?
I think the question is not of you are based on ad revenues or not. It is on how and what value you are bringing to your advertiser. I don’t believe in bashing competition so I won’t go into what Facebook does though we do have a very clear analysis of it..
At MySpace I can tell you that the reason why we get 60% of the global revenues for social networks is the way we offer advertisement. It’s not like a banner that you can click on because that if you think from the point of view of the user is very upsetting.
A social network like Myspace is not a place where I go to check emails. It's a place where I go to catch up with friends, check out photos and if you make advertising interesting, you get heavy engagement. You get people involved and people start discussing and debating on the advertisement. The advertisement becomes fun and the users get involved. So we do a lot of innovation in advertising. The advertisers in this tough economy are looking for better ROI.
So where do you get the bulk of your revenues from – through the events or through the advertisements?
It is a combination. For example we sold the black curtain screening as a package. So you get online inventory, mobile inventory, below the line coverage and on ground stuff. So we don’t break it up as sponsorship and the rest. It is all advertising because you are running advertisement on all our properties. So even if an advertiser hadn’t come the screening would still have happened. By an advertiser coming in, they are just monetising one of our properties. Our property happens to be on ground, it happens to be on our WAP site and it happens to be on our website. All of these form the part of our inventory. Right now both online advertising and on ground advertising generate the same amount of revenues.
Considering that in the current times of slowdown, most of the companies are cutting down heavily on their ad costs, how is the slowdown treating you?
I was an advertiser before this so I am very aware of the fact that marketing heads and CEO are looking for ROI for every rupee that they spend. So to that extent it has made us work harder but honestly it has not impacted us that badly in India.
So hasn’t it impacted your revenues at all?
In India it has not impacted that much, because we are in the growth phase. So it is not like we had an enormous revenue base to get impacted. We are growing the revenue right now at a good rate.
Do you also plan to leverage other News Corp properties in India?
Definitely. We would like to partner with News Corp on the whole. Like for Fox Star, their official website in India is at MySpace.com. So we partner with them for all their movies and we are the website for them. And we will continue to work with other News Corp entities but we are not limited to News Corp.
Would you also look at making acquisitions in India for growing?
All options are open. Right now we are not actively looking at any target but we are assessing all our business opportunities and that is very much an option.
How do you view the scope of social networking in India?
I think it is at a very early stage. I think it will grow a lot. If you look at the numbers, there are about 50 million internet users in India out which 20 million use social networking. So that is about 40% penetration, which is very low.
If you look at advanced internet countries, the social networking penetration is about 60-70%. So a 60-65% penetration means that if the current number of internet users in India, which is at 50 million, doesn’t grow, social networking penetration should grow to at least 30-35 million.
A lot of growth is possible and also how people use social networks for changes over time. After a point of time people have met all their friends from past and have made enough new friends and then they start using social networks for things like getting reviews on restaurants or films or getting advices on various issues etc.
What are your future plans for India?
In India, we will continue to launch new products that are relevant here. We have a lot of ambitious plans for music and mobile for the rest of this year. So this is going to be the key focus areas. The main thing is that we want to bring our unique offering to India.
Indians have either got used to bare social network sites on one side or bare content rich portals on the other side. So you have Yahoo, Rediff on one side and Orkut, Facebook on the other side. We sit somewhere in between. And we believe that the founding principle of MySpace was that is one site you go to experience everything in life.
So on MySpace you can access relevant content, friends, share it with your friends, access relevant products, etc. A lot of product discovery happens on MySpace and that one reason why advertisers continue to come to us. We are also working with advertisers to bring in new innovative products and offerings to India. I think online advertising in India is still very much in infancy.
We are still stuck on either search advertising or plan banner advertising. I think innovation in advertising that engages the user is only starting and we have been doing a lot of that on MySpace. A lot of my focus has been and will continue to be on that.