To reel in subscribers, OTT outfits flood market with ‘sachets’

Mumbai | Updated on December 14, 2018

Tried-and-tested FMCG strategy is helping them add customers at a steady clip

A sachet revolution is under way in the Indian entertainment market.

Replicating the FMCG strategy, over-the-top (OTT) media platforms are trying to hook customers by offering small, low-priced subscription packs that last from a few days to a week, providing unlimited access to ad-free content.

The aim is to seed the market and eventually convert trial users into permanent subscribers in an industry brimming with new players.

Value-conscious market

“Given that India as a market is value conscious, this is the best way to make people experience the product at a competitive value,” Manish Aggarwal, Business Head, ZEE5 India, told BusinessLine.

Ashish Pherwani, Partner and Head, Advisory, Media and Entertainment at EY, said: “I believe content today has become more like an FMCG product with multiple platforms opening up options for impulse buying. Sachet pricing can enable customer acquisition and trial for segmented audiences.”

Zee has partnered with RailYatri to offer a seven-day premium content pack bundled with bookings made via that platform.

It also offers a monthly ₹49 pack besides regional language packs, much like Spuul, where the lowest sachet pack is priced at ₹30. These are much cheaper than regular subscriptions, which are priced upwards of ₹500 a month at most global OTT platforms.

Lowering barriers

“Sachet pricing is meant to get volumes in a market like India. It reduces the barrier for a user to try out a subscription service. And it facilitates growth in terms of transactions,” said D Girish, head of content at Spuul.

Sachet pricing drives sampling, which eventually results in converting consumers for life, said ZEE5 India’s Aggarwal. According to an EY report, over 30 per cent of Indian households are yet to get television screens; but these, being bottom-of-pyramid households, would tend to move first towards free and sachet products. These customers can drive volumes for OTT platforms.

“These packs are helping us upsell. Through RailYatri, we are seeing conversions into monthly and annual packs and through the special regional subscription packs, we are seeing the packs being converted into annual national packs,” Aggarwal said.

Girish concurred, saying several Spuul consumers have upgraded to longer-duration packs. “But a large number of users stick to sachet packs, too. They drive volumes,” he said.

Whether or not the sachet customers turn into permanent users is determined by the quality of product and engagement, said EY’s Pherwani.

“Longer-duration packs will definitely provide income stability,” he added.

Published on December 14, 2018

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