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Will Regional Language Video News Apps Make Money?

Sajith Pai, Director, Blume Ventures is sceptical. In an LinkedIn post titled "The Rise of Hyperlocal Vernacular Video News Apps in India" - which was abridged in The Mint -  he highlights how, in the last year, VCs have backed a clutch of hyperlocal Regional Language news apps - including LocalPlay, Lokal, Awaaz, Circle etc. - that primarily use short video snippets.

Extracts:
India2 doesn’t consume much text, instead it gorges on video, thanks to cheap data. Increasingly short-form video content has emerged as the dominant media unit of India today, spurring the emergence of homegrown social networks / platforms such as ShareChat, Clip, Mooshak etc., as well as the rise of news aggregators such as DailyHunt, NewsPoint, NewsDog etc. And now they are driving the rise of hyperlocal news apps built around video.
...A startup I spoke to estimated their annual cost for sourcing, authenticating, producing and distributing content (20–25 videos / day) to be close to Rs 40 lacs per year per district.
...All of the hyperlocal players believe at some point that they will be able to monetize their audiences via ads. I am not so sure, for in India, there has always been a considerable discount on vernacular audiences re advertising.
...So 180m audiences and Rs 750crs = Rs 4 per user per year! Given that each district should yield about 50k MAUs (monthly active users), we are looking at annual revenues of Rs 2 lacs. But, perhaps local newspapers are a better proxy, given that hyperlocal apps are high engagement products like them. Vernacular newspapers have 35cr readers and get 15,000crs print ads, i.e, Rs 400 per user, which we can discount to say Rs 100 per user (excluding metro audiences and national ad flows), i.e., potential annual ad revenue per district of Rs 50 lacs. Hmmm….not exactly the stuff unicorns are built on.
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