Daybreak - The world of short-video creators in India is going through a major shakeup

Episode Date: May 1, 2023

The launch of Chinese video content platform Tiktok in 2017 changed the social media landscape forever. The short video format became all the rage. Despite TikTok being banned in 2020, the format stayed and a range of Indian short-video apps came up.Content creators from small towns and cities joined such platforms and for many it became a dependable source of income. Some were making as much as Rs 1 lakh a month.But now, with advertisers slashing their budgets, platforms such as Moj and Josh are ending their exclusive deals with content-creators.What seemed like a viable career option for thousands across the country is no longer the same.Tune in.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Ramon, Ganesh, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. The launch of Chinese video content platform TikTok in 2017 changed the social media landscape forever, not just in India, but around the world. The short form video format spread like wildfire. And by 20,

In 2019, users in India spent a mind-boggling 5.5 billion plus hours on TikTok. More than 5.5 billion hours. But we all know what happened a year later. In 2020, Chinese and Indian troops clashed at the Ladakh border and the next thing we knew, TikTok was banned along with a host of other Chinese apps by the Indian government. By then, though, the app, thanks to its format, had brought about a democratic. in the social media space. It was not just urban, well-educated users creating content.

We saw a remarkable rise of regional influencers for whom it was a huge job opportunity. TikTok might have gone for good, but the short video format stayed, and it changed things forever. A whole bunch of Indian short video apps brought up. Moj, Josh, MX, Takatuk, and of course, even the biggies like Instagram, launch reels, YouTube launch YouTube shots. The next step, of course, was monetization.

And by 2022, creators on apps like Modg were earning as much as 1 lakh rupees per month for a certain number of videos. But things have taken a turn now. The exclusive deals that short video creators once enjoyed with these homegrown platforms are being scrapped. Some of them are now barely making half of what they were making earlier, but the worst part is this. the idea that content creation is a stable, full-time career option is under question.

But recently, a report by Red Sears Strategy Consultants predicted that by 2030, India's short-form video apps market will reach $8 to $12 billion. What then is going on? Somajid Sahar, a reporter with the Ken, spoke to some influencers, former employees of short video app platforms, and some influencer marketing and advertising executives to find out. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nagda Sharma, and I Don't Chase the News Cycle. Instead, thrice a week on Mondays, Wednesdays and Fridays,

I will come to you with one business story that is worth understanding and worth your time. Today is Monday, the 1st of May. It was in late 2022 that Morge and its domestic rival Josh cancelled thousands of contracts with influencers. The major reason being a fall in fundraising that forced these companies to save cash. Not long after came the dreaded layoffs. The parent company of Josh,

verse innovation, cut 5% of its workforce and mohalla tech that runs merge sacked over 500 employees or 20% of its workforce in the last quarter of 2022. According to the creators and form, employees that Somejid spoke to, more or less half of the income of these creators who had contracts with these two platforms dropped. So what did they do? Some are managing with the reduced income and giving bigger platforms like Instagram and YouTube a shot. And some are taking up

other jobs to make more money. But when the Ken contacted Moj, their spokesperson denied the claims of a drop in creators' incomes. They told us that it was the opposite instead. They said that the income of creators on their platform had actually gone up over the last four months. Josh's co-founder, Umang Bedi, too insisted that the creator's income had increased on the platform since it began monetizing the content in 2022. Just a year before in 2021, though, things were starkly different. Homegrown short video apps, often built by former TikTok India employees, were brimming with venture capital money. In fact, things were so good that they almost got into bidding wars to strike exclusive deals with the most popular influencers.

The only exception was that all creators were free to post on Instagram and YouTube. And that is because they are important viewer acquisition funnels for Indian platforms and a dependable source of advertising income for creators. But that still does not answer the question why all of this is happening. Stay tuned to find out in the next segment. The main source of income for these platforms is from advertisers, and that is what has slowed down lately. With the current state of the economy, advertisers are playing safe. They are trimming their ad budgets,

and they are putting in their money into tried and tested platforms like Google and meta. So it was around September last year when things actually started going downhill. A former employee who worked directly with a company who worked directly with creators at the company told us that Josh cancelled contracts with a huge number of creators. They asked the creators to deal directly with brands instead. When asked about this, Bedi, the co-founder of Josh told us that fixed contracts at the current majority level of the platform were redundant. He said that they have decided now to move on to a performance-based model.

He added, and I'm quoting, our monetization program, which directly rewards creators who engage with Josh's users, now enables any creator to monetize their content based on how well it performs. This truly democratizes the platform of rewarding good talent, end quote. But no surprises that this move has made creators very angry. Some of them have decided to move to other platforms such as Moj and Chingari. But in approximately two months, Moj did the same. same thing. They started a weekly payout model for influencers on their platform based on the

number of views. And ultimately, these apps began categorizing content creators based on their reach, originality and other such metrics. A lot has to do with the fact that advertisers are now focused on the cream viewers and on creators who make content for them. They would rather go spend their limited ad budget on bigger platforms and on the top Instagram. influencers rather than smaller regional influencers. For example, for Moj, the number of advertisers may have fallen as much as 20% from early 2022. And this is why creators from the Indian platforms, which focus on content for Tier 2 and beyond

audiences, are finding it difficult to make this transition. So what are they doing then? Coming up in the next segment. Creators are gradually understanding and accepting this new reality. Ali, a creator with over a million followers on Moj, who only shared with us his second name, told the Ken, and I'm quoting, it, that is this contract-based payment, wasn't going to last long anyway. We knew they were not making enough money, but we did not foresee things changing so drastically, so fast.

End quote. Many of these creators are now trying to reduce their dependence on Indian short video apps. For example, a Mumbai-based creator, who posted fitness and grooming videos and had over a million followers on Modd told us that he now relies mostly on acting jobs and sometimes also works as a model. Almost all the Indian short video creators that spoke to the Ken wanted to move to aspirational platforms such as YouTube and Instagram because they pay better and they come with more recognition. But a large number of them are struggling to build an audience and regularise.

brand deals. It is a churn. And what comes out of it, we really don't know. But there is one thing that we know for sure. The advertiser-influencer relationship is going to have a new face very soon. Daybreak is produced from the Newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters, subscriber-only, apps and podcast extras. Head to the ken.com and click on the red subscribe button on the top of the website. I am Sniq Dal Sharma, your host and today's episode was edited by my colleague, Rajiv Sien.