My chat with Vinay Singhal, Cofounder & CEO of STAGE

I’m a streaming business nerd. I closely follow the media landscape in the States. While I watch a ton of Indian content, it’s mostly Bollywood and TV shows made for the global diaspora on Netflix, Hotstar, and Prime. Indian content, for me, has always meant Hindi content. Hindi is not even my first language! Just like the American streaming players, I have looked at the localization of content for the Indian market through the lens of the regional languages of India. Talking to Vinay has given me a fresh perspective on how to think about local content that resonates in pockets of extremely diverse India. Regional niches in India are massive! We talked about the maturation of the Indian startup ecosystem, his first company, his philosophy around media as a medium of mass influence, his humble upbringing, what he believes the prominent streaming players got wrong, how cities are not the right determinant of what Bharat entails, his vision to create local content industries across India, and more.

Vinay: I've been a big fan of the content you share. So very excited to talk to you.

Sar: I appreciate that. Content is what we will talk about in this conversation. I’m a big streaming business nerd! We didn’t have the streaming culture in India when I left for the States. The startup ecosystem was not mainstream.

Vinay: I started my first company in 2010. Flipkart was the only company we could look up to at the time. It set the bar for how big a startup can get. Most of us are from smaller towns and middle-class families. We didn't understand the concept of somebody giving you money when your company is making losses.

Sar: The idea of venture capital can be pretty bizarre. We went from it being weird to raise money to it being weird not to raise money in such a short time! The amount of money raised often gets tied to self-worth and becomes a company’s identity.

Vinay: That’s not an ideal state. I don’t think that’s the right thing.

Sar: Yeah. Did you notice that shift in how Indians viewed venture-backed entrepreneurship back then? I was still in High School in 2012. I wasn't following these things.

Vinay: I think it started around 2014-2015, then picked up momentum in 2018- 2019 when it became a big deal; I guess once Indian fathers begin to look for a founder in a groom for their daughters, you know it’s a big deal. I also think it started becoming mainstream when the media took it seriously. Traditional media in 2011-2013 reacted adversely to financing rounds. They were reporting on the startup ecosystem. The ecosystem itself lacked a narrative. We didn’t have our mouthpieces. It was all painted like a scam.

It all changed with YourStory. I think we have to give Shradha Sharma all the credit in the world for it. She took that pain and built the first startup-specific media company in the country. She started to write positively about startups raising money. There was a time when I believed that we should not celebrate funding because it's not something to celebrate. You are raising money and giving away a part of your company simply because you didn't have enough customer money to run your own company. But now, I think we needed to celebrate the VC money in 2011-2013 because that was the only way there would be a positive narrative around startups. Flipkart’s exit was a pivotal point.

Sar: Yeah, it captured the zeitgeist. It made people more ambitious.

Vinay: We believed we could do it because Flipkart did it. There were controversies around it. But, an exit of $16 billion is a lot of money for the Indian ecosystem. Founders became billionaires. A lot of employees became millionaires. It raised middle-class Indian aspirations.

Sar: I find your point about fathers’ acceptance of founders funny, but I also get it. The social status of being a founder was elevating.

Vinay: Yeah. Since you grew up in India, you know how relevant this is.

Sar: And Shark Tank played a role, too.

Vinay: Culturally, yes. It is a very recent phenomenon. It's a prime-time show at the end of the day. Indian masses saw stories of people building a business and asking for capital on TV. It's an Indian aspiration to be in a news story or on TV; it is a huge deal. People started to understand and ask questions about basic startup concepts.

Sar: The show primarily had stories of people from small towns. That’s very relatable to an average person. It wasn’t the people who grew up in Bombay, had a lot of inherited real estate money, and started a bakery on the side.

Vinay: Yes. Many people used to believe that starting a business was not for them. They think it’s too risky, out of reach, and only the big guys would do it. In India, in many minds, business is also caste driven. That’s changing now, but that was the case for a long time. I’m Agarwal, and people like me, Jains and Sindhis, are used to being seen as people who build businesses.

Sar: I get that. I’m from Gujarat, and Gujaratis are known for running their businesses. So let’s talk about your personal story a bit. You grew up in a small town in the state of Haryana that borders Delhi, the capital of India. You went to a Hindi medium school for Junior and Middle School. Your parents moved you to English speaking school in your High School years. You went from being top of your class to the bottom because you barely understood English at the time. You were determined to make it to the top and did it in a short time. You got your parents to buy you a computer when you were young, and that was your first right window into what you could do with software. The first thing you did was look up who's the wealthiest person on the planet. What made you want to do that?

Vinay: My family used to run a small general store in the village. The concept of money was a core aspect of my upbringing. It is probably one of our family’s most critical metrics of success. I grew up believing that more money means more success. I've always believed that if you want to do something, do it better than anybody else. So I wanted to be the most successful person. And, since money was the metric to assess success, I wanted to become very rich. When I got the computer for the first time, it was a significant event in my family. We went to a town about 120 kilometers from my village to buy a computer. I got it with the internet; it was a dial-up connection back in the day. I looked up who is the wealthiest person in the world. It was Bill Gates at the time. How did he become a wealthy person? What's the formula? And I discovered that he's the one who made computers accessible to everyone by building the software that will make them usable for people like you and me.

He created Windows software, the best in the world for the masses. I thought all I had to do was develop software, an operating system, better than his. Everybody will buy my software, and I'll become rich! You wouldn't believe I used to carry a pocket diary back in the day. I would keep it with me throughout the day. I would put it right behind my pillow when I sleep at night just to ensure that if any ideas come up, I could note them down. How can I create a better operating system? What are the features that he's missing? I could only think in terms of features back in the day.

Sar: I love how comfortable you are in talking about your ambition. That is not something that’s encouraged in our collectivistic society. Entertaining a crazy idea is not common culturally. Saying what you were saying took some audacity. I'm sure your friends made fun of you growing up when you said these things out loud.

Vinay: Oh yes, they did. Not just my friends but my father was terrified of my idea. He's like, you know, dial it back. But I think my ambition comes from my mom; It took me a lot of time to identify and accept it. She's very forward-looking. She grew up in a certain family and got married to a certain family. But, if it were a different time and place, she would've probably become someone big. She's always believed in us as kids. I have two siblings, one sister and one brother, and she's always backed us in everything, you know? No matter what we ask for, she'll support us. She is always speaking up even when she is scared inside. If you put a massive idea in front of her and then talk about something huge, she’ll always say why not try instead of saying no. I think that is what has helped me become so ambitious in life.

Sar: Most people have this curse of pursuing practical ideas. Having a stable job and stable life is the Indian way, right?

Vinay: My father is the exact opposite. He is very conservative. Even today, when we face a tough day at work, he’ll say - “why don't you just go and do a job?”. He’ll go, “You will make enough money. That is more than what you will ever need as a family. Why don’t you just go and get a job!”.

Sar: I want to talk about what you are working on now in detail, but let's do a quick overview of your first company and how that fed into your current company.

Vinay: The belief system on which we built the first company is the same belief system on which we made the second company. The first company was WittyFeed. It was a Buzzfeed clone built in India but made for the world. We had a sizeable American audience. We built the world's first-ever content affiliate network.

Back in 2014, Facebook was picking up momentum. Influencers couldn’t make money from Facebook pages. We created content and got influencers to share the content with their audiences in exchange for a revenue share on the traffic they drive back to us. We had two main beliefs. We believe nothing is more powerful than content as a medium of influence for the masses. And second, if the content is king, distribution is God. The real game in content is about distribution. You can create a fantastic blog, book, or movie, but what is the point if nobody watches or reads it? The impact of a content piece is directly proportional to the number of people who consume it. The content affiliate network was how we built distribution.

I believe that more than enough people can create great content, but the real moat will come from the quality of distribution you can build and how efficient that distribution is. We became the second-largest viral content company in the world after Buzzfeed. We saw 120 million unique visitors month over month on the website. We were profitable and bootstrapped. We would do revenue of USD 6-7 million. That made us the third largest digital media balance sheet in India after Times Group and Viacom18.

When we started STAGE, my current company, we returned to our core beliefs: Content is a medium of mass influence, and distribution is a real game. The mistake we made last time was we built distribution dependent on Facebook. We added a third belief to the mix: We will build for Bharat, the next billion users in India. Jio movement was unfolding at the time. We were frustrated with the content companies going after Bharat at the time. We believed we could do a much better job because we came from Bharat. I am the next billion, right? I grew up in a village, and so did my co-founder. We know what Bharat wants.

WittyFeed going down was the best thing that happened to us in hindsight. We were fast-growing, and there was no reason to pivot. WittyFeed going down allowed us to build STAGE.

Sar: STAGE is a streaming service for Bharat. You call it Netflix for Bharat. Talk more about the concept of Bharat versus India. Understanding that difference is key to appreciating what you are doing with STAGE. It will play into what you do differently than the homegrown and international players.

Vinay: Technically, it’s about distinguishing Indians in the top metro cities (India) and everyone else in tier 2 and 3 cities (Bharat). I disagree with that definition. Our definition, as a company, is everyone minus the top 10%. So we exclude the top 10% of Bombay, the top 10% of Delhi, and the top 10% of my village from Bharat. We don’t exclude the metros altogether from Bharat. People in the top 10% everywhere have exposure and access. They are in different income groups. They have a lot of Western influence on their thoughts, their choice of products, and how they carry themselves. Everyone, minus the top 10%, is Bharat.

People living in certain parts of Delhi, major metro and a capital city, are not “India.” They are very much Bharat. Someone who drives Ola or runs a small shop and lives in Delhi is Bharat. We don't rule out all the metros like Bangalore and Bombay when we think about our audience in Bharat. We don't want to count entire rural India as Bharat either. We know people in my village who wouldn’t use our product, and there are people in metros that would use our product.

Sar: That’s fascinating. And now that I think about it, it makes a lot more sense than using the city as a barometer for what India is versus Bharat. Your Linkedin says you're trying to build a premium and sensible content company. What’s the thinking behind those two words?

Vinay: When you look at all the content companies targeting Bharat, the word premium applies to all of them. They will all say they do premium content because it’s professionally made. But they don’t make sensible content for their target market. When we started in 2019, the top five content companies were TikTok, ShareShat, Hello, Vigo, and Chingari. They are mostly Chinese companies. Many companies have a vast amount of sexually explicit content as their growth hack. They would hire models and ask them to create videos in a certain way so that they could attract people. To be clear, that content works. Nobody denies that.

Sar: Is that intentional? The companies you named are UGC networks. You are not talking about the streamers here.

Vinay: In the name of UGC, it is done intentionally. The creators get paid to produce a certain type of content as a seeding strategy. That is how they bring people online, and now they acquire people. Right. See, sex sells everywhere. It's a universal need. The US watches it, Europe watches it, Africa watches it. So why would not Indians? Right? And Bharat never had access to sexual content. They got it for the first time. It is highly restricted in India. So they would want to watch it. Everybody would love it. The question is, do they want to consume content beyond that?

Do you want to look at content as a medium of exploitation or empowerment? And we wanted to build a company that uses content as a medium of empowerment. As I said, content is the most powerful medium of mass influence, right? And so the choice is yours. You can use it to drive fake news or riots or seed sexual content. Or you can choose to create high-quality, premium, sensible content that empowers people. My cofounders and I were courageous enough to say that we would build a premium and sensible content company when the other way would've been much easier.

Sar: So you started with STAGE in 2019. It is a streaming service with hyper-local content. What did you see as an opportunity in the streaming landscape back then?

Disney has acquired Star India-owned Hotstar through the acquisition of its parent company 21st Century Fox in the States. Netflix entered India in 2016 and has struggled to build a subscriber base. Prime Video is bundled with Amazon’s Prime membership and seems to be doing better than Netflix. My read is all the American players are struggling in India. Disney+Hotstar grew the fastest; most of that growth is because it owned IPL cricket rights, which it has now lost. The ARPU for the paid services is extremely low compared to the ARPU in the West. I often find that the localization efforts of these players are working for what you call India and the broader Indian diaspora globally. That is a tiny sliver of the Indian population. On top of all this, there are dozens of homegrown streaming services. The popular ones are Zee5 and Sony Liv. It is quite interesting how many Indian services and studios have foreign parent companies. Given that context, talk about what you saw.

Vinay: We started with the idea that premium and sensible content for Bharat didn't exist when we looked at that space. When you want to do premium, you cant do UGC. You have to do professionally made content. And we were doing OTT to own the distribution, learning we had from our last company. There are 27 active OTT platforms in India. Everyone will tell you they're building Netflix for Bharat. So what is so unique that we are going to do here? What's the missing piece? We went back to our village and spent some time there trying to understand what's the missing piece. What is that they're not getting, which they should be? And we found that everyone does language-based content in the name of vernacular-based localisation. That includes Hindi, Punjabi, Bangla, Gujarati, Telugu, etc. I grew up speaking Haryanvi, a dialect, not a language. It is part of the dialect group of Hindi.

Sar: Yeah, it’s spoken, not written.

Vinay: Yes, it is written in Hindi. No app had content in Haryanvi. We were asking why is that so. We discovered that because of this simple distinction between dialect and language, no local industry, no local literature, and no content developed in Haryanvi. The audience size wasn’t the problem. Thirty million people speak Haryanvi. Language is an urban concept in India. Everyone speaks in dialects when you go beyond urban settlements. You go to any state and find people speaking different dialects of the dominant language, depending on where you are. Even Gujarat, where you are from, has two multiple dialects, but the language is Gujarati.

Sar: So the insight was a language is not the localization vector, its dialects, which are multiple flavors of the same language.

Vinay: Absolutely. If you want to build it for the next billion and solve for tier two, tier three, and the rural parts of this country, you must do dialect-based content. A hyper-local content company in India must be a dialect-based content company, not a language-based content company. So that is the unique thing that we decided to go after. We launched with Haryanvi because it's my home dialect. It made more sense to solve my problem first. And from there, we launched Rajasthani (the state of Rajasthan) very recently, and we plan to launch a few more soon.

Sar: So for each state, you'll go after multiple dialects to capture a state?

Vinay: We are not going state-wise; we’re going dialect-wise. Luckily our first two dialects were from two states, Rajasthan and Haryana. But for example, Bhojpuri would cover Eastern Uttar Pradesh and Western Bihar. As we launch more dialects that span states, we would grow region-wise and not just dialect-wise.

Sar: Interesting! Talk about content creation. There’s Bollywood, with which most of the world associates the Indian movie industry. There’s Tollywood, which is the Telugu film industry in Southern India and is now larger than Bollywood in terms of box office revenue. The movie RRR came from Tollywood and became one of the most watched non-English movies on Netflix globally. It cracked the US top 10 films earlier this year!

Vinay: We have created our own local Bollywood here in Haryana. There was no industry before us. We build it from scratch and have it now. While working here, one cliché insight you discover is that talent is universal, and opportunity is not; so many people want to create Haryani content, but who will buy it? Who will distribute it? Theaters won’t release it. How are they supposed to make money? So the opportunity was the problem. Nobody was ready to invest in that content. Nobody was ready to release that content. So, what we did was we brought together this community, mentored them, incubated them, trained them, and sanctioned their first web series projects. We will take a chance on people to create the first project of their life.

Sar: STAGE is a production studio? You're hunting down the creative people and betting on them to produce content that you then distribute on your service?

Vinay: We don't do the execution ourselves. I usually stay away from calling ourselves a production studio. We are more like an outside producer who will finance you, as a creator, to create your movie or show.

Sar: How does that work?

Vinay: There's a team for it. People apply to us to get financing. We listen to the story. And if we like it, we will sanction it. We will ask you for a budget. Once we agree on a budget, we approve it and you 30% in advance to start producing it and to take care of the production end to end. We don’t work with the cast and crew. So you become your own production house. We get involved in terms of quality control. We will participate in discussions about finalizing actors but don't get involved in the execution. We are an outside producer who financed you. We can create many jobs by putting money into the local economy. More than 25 production houses today in Haryana work with us regularly. And they can work with anybody else if they want to. There are no exclusive arrangements. There are no other buyers of that content, which is why they end up working with just us.

Sar: Netflix is not coming in and buying content from them and bidding up prices. You have no competition from the big guys. It is monopsony. You are the only buyer!

Vinay: Absolutely. It’s a total white space.

Sar: Oh, wow. And the person who reaches out to you can be an actor, a director, a financier, anyone who's got a story to tell and is willing to put in the work.

Vinay: Yeah. Anyone ready to take responsibility for the full project and then arrange the entire team. We will do it with you if we believe in their capabilities and agree on the budget.

Sar: So, organizationally, you have to build a creative muscle.

Vinay: We have to build creative muscle only to the extent that we can identify the right stuff. The creativity is still crowdsourced. All these writers are writing stories for us. We have to have a knack for identifying the hits.

Sar: You own the IP? Is there a performance-based back pay for the creators?

Vinay: We own the IP. We are moving more and more toward the model where we want to give back pay on the performance. Since we are already funding the entire project, there's no obligation to do it. And there's no expectation for it because we are paying you in advance. There is a creator commission, usually around 10% of the project's total cost.

Sar: How replicable is this model of creating local industries?

Vinay: We have identified 20 dialects that either have no industry or a poorly developed industry. Ten dialects within the Hindi-speaking states don’t have any local industry.

Sar: Talk about the cost structure and pricing. You launched paid tiers a little while ago.

Vinay: Yeah. We launched paid tiers 15 months ago. There are three different plans. You can buy three months, six months, or twelve months that we charge 199 rupees (~$3), 299 rupees (~$4), or 399 rupees (~$5) for, respectively. Most users choose the annual plan. Content is the primary cost, essentially. And that is more like an investment because we can keep milking the same content over a long period. Our cost structure is extremely low and favorable because of the simple fact that there are no celebrities here. We work with talented under-discovered people. So you're paying for the talent and not for the fame. We can produce a series under 25 lakhs with six to eight episodes of 25 to 30 minutes.

Sar: The same series with someone from Bombay and with some fame would cost you multiples of that.

Vinay: At least ten times more. No content in Bollywood that is created under two or three crores. Rocket Boys season one on Prime Video was 40 crores. The Empire, an Indian period drama on Disney Hotstar, was created for about 80 crores. Of course, we don't have the same production value yet, but the same production value would be something like Panchayat. We have similar production value, and the cost structure is one-tenth of what a child would've spent.

Sar: How do you think about the type of content that drives subscriptions versus content that keeps the subscribers?

Vinay: Our original content usually drives subscriptions. We do a lot of dubbed content that serves as filler content.

Sar: Is dubbed content licensed? That’s much cheaper than the original content?

Vinay: Yeah, because there's no one else buying the dubbing rights.

Sar: Ah, I see, so you are licensing content from other companies specifically for dubbing it in the dialects you are focused on. If you were to do a Hindi version of that content on your service, the price would shoot up. So, why are the homegrown streaming services not seeing this opportunity? I get that international players like Netflix and Disney are trying to localize at the country level because India is just one of their markets. It is the largest market they have access to but still one of many with much lower ARPU. Why haven’t Sony Liv or Zee5 thought of this?

Vinay: I think there are multiple layers to it. Number one, this is a tiny market for them to worry about. And there is an inherent ignorance around what resonates with audiences in all these markets. They believe Hindi content maximizes their reach, especially in Northern India. Why would you want to invest more money in creating hyper-local content?

Second, their playbook has always been playing in the existing industry, with many existing players and content. They can partner with a couple of studios and license large content libraries. That gives them the filler content. For original content, there are so many production houses they can get content created from. The markets we focus on do not have existing players and content. We are doing all the work to build that up. The ROI against the effort required doesn’t make sense to them.

The third reason is a widespread belief that Bharat doesn't pay for the content or that Bharat doesn't pay for anything. I strongly disagree with that belief. But then again, that is what the more prominent companies believe.

Sar: You don’t think an average Indian doesn’t have the willingness and ability to pay?

Vinay: My father used to run a small general store in our village. I remember we sold P&G, Pepsi, Coke, and Unilever products. It's a relatively small village with primarily agricultural income. And people would buy all of that stuff. So the problem is not a brand problem or about paying capacity. The problem has always been about providing value. India is a very value-conscious society. That is true. That insight is valid. Everyone wants to take the easy path when selling digital services. Everyone wants to create a third-class experience, put more ads than content on their apps and then make people want to pay. And then they claim Bharat doesn’t want to pay.

You have not created anything which is for them specifically. And so you can't claim this. And this is where we come into the picture. We believe we have built a product primarily for Bharat and expect them to pay for it. UPI has been a game-changer. 95% of our payments are happening on UPI.

Sar: That’s an interesting perspective. I’m guilty of assuming people just don’t pay for digital services myself. We paint Indians with a broad brush. And not for totally invalid reasons. India has come a long way over the past two decades, but we still have a low GDP per capita, and the median household income is still quite low. I hope your intuition on this is correct! When you think about your subscriber base, you're not thinking about it at the national level because these are regionalized user bases, correct? The content you are producing for your home state in your dialect will not appeal to someone like me who grew up in a different state and spoke a different dialect.

Vinay: Absolutely. As opposed to the Netflix approach, where it's targeting India. For us, India is not one big market. It is a collection of many different markets. Both content and marketing are region and dialect based. It's a very local strategy. We are interested in the Indian diaspora. We have recently launched our international payment support. We do have some users already using us outside of India.

Sar: People who want to stay close to the roots?

Vinay: Yeah. More than half a million people from my region live outside India. Even if I capture like a hundred thousand of them, that's a lot of money. That's equivalent to about a million subscribers in India in revenue. I'm charging only 400 ($5) rupees in India. I can easily charge at least $50. $50 is 4,000 rupees today.

Sar: And that's still cheaper than all the other streaming services they pay for. Disney, Netflix, and Prime are all increasing their prices.

Vinay: And this is unique, local content. If not anything else, we expect people to pay for the service out of guilt. Like a charity, there is some guilt to staying connected to the roots. People want their kids to learn something about their culture.

Sar: Yeah. Especially the first-generation Indian families. They want their kids to learn their local languages, which is a real problem for immigrant parents who have kids in the States. Your previous company was about content as well. Any instincts or habits you had to unlearn from going from that business to this streaming business?

Vinay: We produced content in our previous company, but it was all text content. We switched from web-based to fully app-based. We went from fully in-person to fully remote. It has been a little bit of a learning curve. But I can't remember anything we have been stuck on because of the habits we carried from our we couldn't solve for no such habits from the old company. There are some larger DNA issues. We just had our weekly company-wide meeting. I was talking to our team about how we use data, but we don't use data to drive insights. We use data to drive validation. We are a very reactive company, not a proactive one, and we need to fix that. So I was talking about weaknesses that we still have. This has been a founder DNA problem, which we carried from the older company.

Sar: Speaking of data, how do you use data to make content decisions? Ultimately, content is about storytelling, and data can’t tell you much about what new ideas you should greenlight. Another question I have is how you evaluate the success of a show or a movie. This gets to the meta debate over how data-driven streaming services should be.

Vinay: I think we have two metrics that we use for understanding the success of our content. Every original content piece is marketing for us at the end of the day. The number of new subscribers we can acquire because of a piece of content defines how successful that content has been. And the minimum number is about 10,000.

And the second metric is the completion rate which speaks about the quality of the content. So the first one is a commercial success. The second one is about how good the content was. That drives retention, word of mouth, and publicity.

Sar: Why 10k new subscribers as the metric?

Vinay: So, like I said, under 25 lakh is what we create a web series for. We need at least 10,000 new subscribers to break even on that piece of content.

Sar: I think we can go on and on but let’s make this my last question. You are preserving the local culture and amplifying local voices by financing local creators to create content you distribute on your service. What do you think about your role in Indian society, and what are your plans for the future?

Vinay: Our latest tagline adopted from our last offsite is "कंपनी नहीं, हम क्रांति हैं "

I think Indian society had been fed a lot of low-quality content, which had led people to look down upon their dialect and cultural identity. With STAGE, we are creating a revolution for bringing back the local cultures’ pride, respect, and dignity. With Haryanvi and Rajasthani dialects in place, we will soon enter a couple more markets within the next year.