Neeraj Roy started his career with the Taj Group of Hotels. After a successful corporate decade, he decided to make a move and went on to establish Hungama.com in 1999. Today, Hungama is the largest aggregator, developer and publisher of Bollywood and South Asian entertainment content in the world. In an email interview , Roy shares experiences of his entrepreneurial journey and his future plans for Hungama.
You began your career with the Taj Group of Hotels and then shifted to a local investment banking firm. How did Hungama happen and what was your idea behind launching the company?
I came to Bombay for my business studies and graduated from Sydenham (Sydenham Institute of Management Studies, Research and Entrepreneurship Education). Thereafter, I worked with the Taj Group of Hotels as marketing manager for South Asia for close to four and half years. Post that, I moved to investment banking with Prime Securities.
While setting up Hungama, the central theme was aimed at establishing a marketing solutions property which was completely geared towards the end consumer. It offered brands a platform for convergence and we positioned Hungama.com as the interface between the consumer and brand. So literally, both entities looked at it as an entertainment destination coupled with promotions.
Since internet was in its nascent stage, we offered brands to come on board without really charging them a service fee. We asked them to partner with us and in turn we would run an interactive promotions campaign for them. And to make this enticing for the consumer, we asked the brands to give us some prizes which could perhaps be their own products, to be given away as gratification to the consumer. Therefore, the idea was to make it a fun site where people can visit and win prizes.
What were the initial challenges you had to face while launching an online company at a time when internet was not popular in India?
During the initial years we found it difficult to convince brands to explore internet as a medium for promotions as the industry was very small. At that point, traditional media formed the genesis of all promotional and branding activities. Therefore, it took us sometime to successfully break-through with brand managers on board.
What was your reason behind acquiring IndiaFM.com in 2000 and renaming it to BollywoodHungama.com?
We were keen to build and grow an online community. IndiaFM.com had a vibrant community. We believed that movies and music content would grow online and synergized well with our entertainment offering at Hungama.com. We renamed it BollywoodHungama.com in 2009 as we were making all our offerings under one brand, Hungama. Thus, GamingHungama.com, Hungama Mobile, Hungama.com etc.
You are among one of those entrepreneurs who survived the infamous Dotcom Bust. What were your survival strategies then and what are the lessons you learnt during that phase?
Fortunately for us, we learnt some important lessons on operating a successful internet business within six-to-nine months of launch. The most important being, we did not go ballistic with advertising on Hungama. Rather, we built the brand through word of mouth. We reached out to the audience on high density net connected hangouts such as malls, colleges and more such locations. We also ensured that we never over-commit to clients. Considering the limitations of the ecosystem, whatever solutions we were trying to offer had a lot of sincerity. These basic policies became the underlining factors that allowed Hungama to dodge the bust.
Hungama Mobile was started at a time when mobile had probably not picked up as a device for consuming entertainment content. What were the initial challenges that you had to encounter?
There were very few platforms of size and scale for consumption of entertainment content. Whilst we started with Text, Imagery and Video content, it was music that gave us the maximum traction. Services such as Caller Tunes, Ring Tones etc were on the rise and Hungama did well in consolidating the content offering. Today, we work with over 305 original content owners in more than 25 languages globally.
What was your objective behind launching GamingHungama.com? How has the business been performing since launch?
Gaming is one of the fastest growing segments online. Hungama has been into gaming since early 2000. Several of our early e-promotions were actually AdverGames and we have built over 350 casual online and mobile games as a company. We founded GamingHungama.com in 2007 as a standalone destination site. The journey thus far has been satisfactory although the real inflection in gaming will come in 2011.
Recently, the company announced a new corporate identity and became Hungama Digital Media Entertainment from being Virtual Marketing. What was the objective behind changing the identity?
Since the launch of Hungama, significant changes have taken place in the digital marketing ecosystem. Our offerings have evolved and therefore, we identified the need to position ourselves as the preferred partner for all things digital. Also, since our products are focussed entirely towards the end consumer, we decided to refurbish our identity as a young and vibrant brand that offers unlimited entertainment. This change not only reflects our diversified businesses but it also retains the Hungama ethos of innovation and quirky irreverence. As thought leaders in the digital and mobile entertainment space, we constantly strive to give our partners new opportunities in the field of Entertainment and Marketing with the digital media. In many ways, the change in our identity is not just a change, but a reiteration of our core values and excellence in the field.
Hungama.com is now a digital music store and it comes after you launched a similar portal in partnership with BSNL. How is Hungama.com different from BSNL.Hungama.com?
Hungama.com is a digital entertainment store that offers entertainment across categories such as music, ringtones, videos, dialogues, wallpapers and much more. At Hungama.com, consumers have an option of choosing from different price plans which comprise of both DRM protected and MP3 formats. Hungama.com also offers an option of accessing and managing your favourite entertainment through Hungama MyPlay application on the mobile and PC. Users across operators can access Hungama.com on their mobile and enjoy unlimited entertainment on the go.
Besides your own brands, you also have a digital entertainment network which includes Raaga.com, DailyMotion.com, FTV.com, IndiaGlitz.com and Nautanki.tv. Can you please explain what sort of partnerships you have with these properties and how are they functioning?
As you have rightly pointed, these websites form a part of the Digital Entertainment Network (DEN) at Hungama. DEN comprises of Asia’s most visited websites ranging from entertainment, music, lifestyle and more. This digital distribution network allows us to reach across mobile, online and IPTV services. Collectively, these websites are the largest digital entertainment network. Various brands can use the DEN platform to create innovative promotional campaigns that reach out to the end users.
Who is Hungama partnering with in the international and the Indian arena for mobile and internet content?
As per recent developments, Hungama has partnered with EMI Music for the digital distribution of their catalogue in India, Pakistan, Sri Lanka and Bangladesh. This association also allows us to access Warner Music’s catalogue. Recently, we also announced a strategic partnership with T-Series and Big Music, where we will be jointly steering the physical and digital distribution of Big Music’s catalogue across the world. Additionally, we also have partnerships with Universal Music and Sony Pictures. In the Indian hemisphere, we have partnerships with T-Series, Yash Raj Films, Eros etc. These partnerships allow us to distribute their content on internet, mobile, DTH and other digital platforms.
How many content partners are you working with right now and in how many countries are the content distributed?
We are currently working with 305 plus content partners and this content is distributed to consumers in 37 countries.
How has the economic slowdown affected Hungama?
Fortunately, the areas of operations for Hungama, such as mobile and online services continue to grow.
What are Hungama’s major plans for the next 2 years? Are you planning an IPO?
We see Hungama at the forefront of Digital Entertainment globally with a distribution network crossing 100 locations with over 500 telecom, internet, cable and IPTV partners. We will also foray into other forms of digital content including education, information services, etc.
Can internet be regarded as a good place for brand building? How can we get offline brands to spend more on internet?
The internet is a great platform for brand building. It acts as a conduit between the consumer and the brand. Brands can leverage the interactive nature of the internet to establish a personal connect with the consumer. At Hungama, we use our expertise on the digital platform to create services that not only create awareness but instead go a step further to ensure interaction with the brand. We are already experiencing a positive inclination from brands towards the internet. Therefore, we feel that the way forward for internet will be — successful integration of digital services with traditional media practices for holistic communication opportunities.
What are your thoughts on taking the internet penetration in India beyond the 40 million odd users?
Whoever said that India’s internet population is only 40 million? As per our estimates it is 62 million, although people such as Morgan Stanley’s Mary Meeker believe it is in excess of 80 million. If you take 20 million NRIs it tops 80 million. We are the 4th largest internet market in the world. I believe we are over 50 million mobile internet users in India. India should be a 200+ million consumer market by 2013.
What are your views on the debate of vertical vs. horizontal portals in India?
There is tremendous scope for growth of vertical specialized sites in India. We have not even scratched the surface for the same.
What according to you is the scope of mobile internet in India? There is a perception that mobile internet is mostly used to consume and share information and not for transaction based purposes. What’s your take on that and what are the reasons responsible for this?
I do not believe mobile internet in India or indeed the rest of the world will be used so much for transactions, at least for the next two years. However, with nearly 30 per cent devices being data ready phones, the consumer base on mobile will grow to over 200 million by 2013. The newer generation devices which will hit the market mid 2010 which would be a blend between an iPhone and a netbook will further augment the growth of mobile internet.
What would be your advice to today’s entrepreneurs?
Very simple, look at the digital medium. There are at least 100,000 new opportunities waiting to be tapped into. This market needs 100s of thousands of new services which can be powered by the internet and mobile medium. The new applications economy, for example, is very real and businesses can scale very fast by just leveraging a few platforms. If you have a dream, then channelize your energies, focus on what you want to develop and execute, you will see success.