Niyati Shah, the co-founder & CEO of Shotformats, a digital entertainment and value added services company is no stranger to the entertainment business. Her 15-year-old tryst with the industry included stints at Zee, Universal Music India, Sify and Yahoo. Around 2007, she decided it was time to move into the director’s seat of her own company and co-founded Shotformats with a friend Rachna Puri. Today, the company has established itself in the VAS industry and Biscoot, it’s latest concept, is the world’s first offline appstore, Shah claims.

Seven years ago, I started Shotformats when I realised I would rather work for myself than take someone else’s directions. I wanted to take the entrepreneurial leap and the value added services (VAS) industry presented the perfect opportunity. During my work with companies like Zee, Sify and Yahoo I realised that there was a huge gap between the consumers and content owners in this category. Although most companies had the distribution networks and operator bandwidth to reach out to large audiences, noone in the industry was customising their content for the consumer. The content was being force-fed and there was little communication to the customer about what the service could do.

At that point, very few people had both a background in content creation and the necessary digital exposure. When we started building the company, our initial conversations with operators made us realise that all service providers were focusing only on the platform, leaving much to be desired with the end product. That’s when we walked in and we understood all three—content, product and audience. We had all the ingredients it would take to change the industry.

We were among the first few companies to talk pure-play mobile videos and mobile comics in India. Which is why, despite being late entrants, telecom operators chose to work with us, and our partnerships with them ensured the company grew briskly even in the early years. Our flagship product Talkies, a movie streaming service for mobile phones that we launched in late 2009 did extremely well. As a one-stop destination for movies of varied genres and across languages, Talkies was soon one of the top three VAS products for telecom operators.

When we started Shotformats, our goal was clear. We wanted to be one of the top three VAS companies of India. By 2012, we were in a good place. We had been able to make the business profitable. It was time to move to the next phase, to figure out what’s next. The entire industry then was running behind online applications, and a majority of the applications were being offered through app stores. None of the companies had a clear business model since mobile advertising was—and still is—very nascent in India. As we began to take stock of the situation, we also recognised that although consumers wanted good content, they didn’t know where to find it. This was a big impediment for consumption.

Our surveys and data crunching led us to some astounding insights. Out of the total population that was on platforms such as app stores, only five per cent of the users had ever downloaded an application. More so, 90 per cent of those applications were those of Facebook, WhatsApp, Angry Birds and Candy Crush. Our target audience became very clear—we needed to reach out to the 95 per cent who had never downloaded an application, as well as to get interesting content and apps to the five per cent who did download the basic apps but clearly didn’t find enough content options.

However, we were still battling the beast of piracy. Even though we were producing quality content, it was still very difficult to communicate the value of the service to our consumers. While trying to solve this conundrum, we hit upon the idea of creating a physical space that would help prospective consumers engage with our content offline. This is how Biscoot, our offline application store, was conceptualised. Not only did Biscoot break new ground for us in terms of distribution, its offline model was also a blessing in disguise for our partners.

People often ask us why we named our stores Biscoot. It was actually quite an easy call. With a mobile handset, you don’t have the luxury of having appointments with your consumer. People go to their smartphones whenever they are bored or hungry for entertainment. It’s a distraction. So, whatever content consumption takes place on the mobile—be it gaming, applications, movies or music—is essentially snacking. We wanted to capture this essence of mobile content with the name of our product in a way that would seamlessly cut across all class differences. A biscuit, or a cookie, however you want to call it, is available in Mukesh Ambani’s Antilla, and also in a house somewhere in Gorakhpur. So, although we first came up with the name Biscuit, it didn’t quite fit. The more colloquial Biscoot had the perfect ring to it.

Whatever content consumption takes place on the mobile—be it gaming, applications, movies or music—is essentially like snacking.”—Niyati Shah, Shotformats

The launch of Biscoot was extremely difficult for us. We didn’t have a reference case study because this had never been done before. It was difficult for us to bring distributors on board. We had to hand hold them through the entire process and chalk out the possibilities that such a store would offer. However, once we were able to convince distributors that there was a ready market for this format, they were willing to partner with us.

The second problem we had to contend with was the influx of pirated content. Fortunately, top line stores do not deal in pirated content—they want to provide copyright content to consumers hunting for mobile content. Biscoot helped them do that. Because of the touch-and-feel of the store, we could convince customers to protect their device that they had probably spent at least Rs 6,000-Rs 7,000. Pirated content may be harmful for their devices in the long run. We’ve been able to attract a lot of consumers through this increase in awareness, and our retailers are doing a great job in encouraging them to buy legal content.

To ensure transparency in the sale of applications that are sold through retailers, we’ve built an ecosystem, which is robust and allows us to track numbers all the way down to the retailer. Secondly, these retailers are people who are already selling handsets so they’re familiar with mobiles—for us to train them is not very difficult at all. We have created modules for our retailers in the form of audio-visual tutorials they can watch at any time. These tutorials are designed to help the retailers with any queries they may have regarding the product, what it offers and the value proposition for customers. It also addresses any logistical concerns they may have.

This sort of constant engagement with our retailers is very important since all of my activities are retail driven. From our end, we have tried to ensure that all applications are very vibrant since we are targeting the Indian consumer and Indian consumers like vibrant, bright and happy packaging.

We already have a huge in-house content team right now for our VAS business. Our focus is on entertainment. With the launch of Biscoot, we have been able to add a lot of depth to our mobility business. Since we have direct access to the consumer, we have begun understanding our consumer much better. Earlier, our entire system was routed via operators, which meant that we did not have the opportunity to reach out to and gauge the demand of our consumers directly. Through Biscoot, we are constantly getting updates from the retailer, and that has helped us keep up with the market requirements.

Through Biscoot, we have also been able to tap into Tier 2 and 3 markets that were not as accessible to us earlier. We’ve developed regional calculators; these are calculators that have regional digits. We’ve developed an application that helps consumers design their saris and salwar kurtas because most women in India still buy material and go to the local tailor to get their clothes stitched. Applications such as these are just a snapshot of how complex and rewarding the Indian market is. This is the kind of understanding we have been able to develop because of our proximity to the consumer.

We’ve also launched the Biscoot wallet that is heavily used by our retailers. Our business is completely cash and carry. So we load whichever applications they want on the wallet and the transaction becomes very easy. Everything is recorded digitally and the retailers can reload more currency on the wallet as and when they require it. It’s been a simpler and easier way to transact for the company, distributor and retailer. Even if there is a change in the price point, it’s done at the back end and all we have to do is inform the retailer. Although it has not penetrated down to the consumer yet, we are hoping to open this up for consumers by the end of this year.

Biscoot has been an exercise in humility as we have truly realised how little we know about the market we serve. My learning is that if you step out of your air-conditioned offices into the streets, your idea of what you think your consumer and the Indian market is will be shattered. The realities of the market are dramatically different from what we imagine them to be. My top selling movie across the metros, Tier 2 and Tier 3 markets till date is Hum Aapke Hai Kaun—that is India for you. Most corporates, inevitably located in metros, surround themselves with the myth that Indian consumers use their mobile as a personal device. In reality, it doesn’t work that way beyond metros. The fact that there are barely any purchases of images or wallpapers is a clear indicator that mobiles are not as personal as we think they are. Within a family, it is possible that the device is shared between all members. This shows in our sales, which are skewed towards quality, family content.

We started with five employees; today we are about 460. This journey was not an easy one; in parts it’s been very rough, almost devastating. When you’re working for a huge organisation, you enjoy several luxuries. As a proprietor, you have to be worried about every little thing from the contracts that the company is signing to whether your staff is satisfied with the workspace. It is a lot of pressure and very unchartered territory. In our initial years, salaries were never on time and we had to constantly talk to our employees and ensure they believed in us. I was fortunate to have a fantastic team that stuck with me through thick and thin. Most of these are people are still working in the company.

Going forward, I am going to focus a lot on expanding our distribution. The idea is to scale up and that is why we have stopped restricting ourselves to in-house produced applications. Our idea is to build a robust distribution network where any developer can find out about us, and we can help him or her take their content to the market. It’s a journey that has barely started, and one that I am extremely excited about traversing.