💎 At odds: comedians, gamers & distributors ( 12 December 2021)


Disagreements are inevitable. But then these conflicts are sometimes a step towards better solutions, ideas and innovations. This week, we look at some real stories of friction playing around us. It would be interesting to see how the resolutions are worked out!

Spotify has removed the work of hundreds of comedians amid a new fight over royalty payments. The comedians’ community is led by Spoken Giants, the global rights administration company that wants to collect royalties for the jokes the comedians wrote when they are played on platforms like Spotify, YouTube and Pandora.

State of funny

A report by The Wall Street Journal suggests that the comics currently are paid as performers on a digital service through their label or distributor and digital performance rights organization. However, they are not paid as creators of the script, the way song writers are paid for their music & lyrics.

The hilarity business

- Comedians are now seen as artists who can help in increasing the happiness quotient in the society
- Digital medium has taken comedy to the deepest corners globally, making it accessible to a larger share of audience now
- The share of digital comedy content ranges upto 40% for the leading streaming platforms

Our take

Taking down the content from streaming platforms is bad news for both the creators and audiences. All the artists - be it songwriters or comedians or script writers deserve to have an equal playing field. Also, audiences should be willing enough to pay appropriately for the content they are getting entertained with.

The video gaming landscape has changed drastically over the past few years, more so after the pandemic. The industry revenue is estimated to reach USD 180 billion in 2021. And with this multifold growth, the gaming companies and the gamers have also drawn attention from the hackers.

We got gamed

As per a recent report, four in five Indian gamers have been impacted financially by hacking while playing, losing Rs. 7,894 on an average to cyber criminals. Also, the web application attacks in the gaming industry grew by 415% between 2018 and 2020.

Easy targets

- With real money games becoming popular, gaming apps are similar to fintech and banking apps that store data like banking information and personal identifiers
- Gamers are also willing to take risky actions that could compromise the security of themselves or others to gain a competitive advantage
- Gaming companies don't need to adhere to the same security and regulatory requirements as other companies that must protect customer data

Our take

Given the huge monetary value and security credentials at stake, these attacks are frustrating for players and might impact the relationship gaming companies have with them. Stricter curbs by the regulators and beefing up the existing security protections by the gaming companies is the need of the hour.

Traditional Distributors VS Organized Distributors

All India Consumer Products Distributors Federation (AICPDF), the apex body of 400,000 FMCG distributors, has written a letter to the top consumer companies, urging them not to give preferential treatment to any channel on the basis of order volume. The association has threatened to halt supplies if their demands for product-price parity and equal margins are not met.

Retail redistributed

B2B players like JioMart have disrupted this channel by not only offering predatory pricing to the retailers, but also ensuring delivery within 24 hours. They offer training on ordering mechanisms, credit facilities and free product samples for customers of the affiliated kirana shops.

The two sides

- For the FMCG companies, these traditional distributor channel is important as it forms 85% of India's overall business and a single supply chain source in many rural areas
- For AICPDF, the concern is the huge financial investment that stands at the risk of being rendered waste as many of its members are already facing bankruptcy

Our take

Consumer companies can not afford a prolonged tussle with the traditional distributors. This would have a significant impact on the sales and future demand. Meanwhile, investors should also take a note that these standoffs present likely intermediate supply chain risks, particularly in the dynamic consumer retail sector.

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