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Last Updated : Sep 13, 2019 08:56 PM IST | Source: Moneycontrol.com

Apple TV Plus: Why Apple should look beyond its Rs 99/month subscription plan

For instance, a Brightcove 2019 report says Indians would be comfortable paying no more than USD 1, or roughly Rs 70, per subscription service.

Maryam Farooqui @farooqui_maryam
Representative image
Representative image

Apple recently unveiled its subscription-based video streaming service, which will launch globally as well as in India on November 1 at Rs 99/month.

Apple TV Plus will go up against competition in the form of Hotstar, Netflix and Prime Video, besides smaller rivals.

The ad-free over-the-top (OTT) service, which will initially be available only on Apple devices such as iPhone, iPad and others, will start with as many as nine originals, even though reports peg that as many as 30 shows in total may be ready or in the works currently.

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But Apple’s overall content strategy, including local partnerships, is not yet fully known.

Having said that, experts say that Apple seems to have got its pricing right. Assuming that Apple’s content works with audiences, the company seems well placed to tap into the premium market where larger rival Netflix operates.

At Rs 99 per month, Apple’s latest service does not look like it belongs to the same company that charges a premium for its products. But the company would do well to note that the Indian market for streaming services may be different from the other audiences.

For instance, a Brightcove 2019 report says Indians would be comfortable paying no more than USD 1, or roughly Rs 70, per subscription service.

In fact, while Apple’s strategy, like Netflix’s, is to be completely ad-free, the report says that Indians will not mind watching adds if it helps reduce subscription fees.

According to a study whose findings were disclosed in the same Brightcove report, around 25 percent do not mind some ads if it results in a lower fee. Another 25 percent would prefer a free subscription with ads. Around 14 percent wanted the flexibility to customise price and ad package.

This report’s findings do not necessarily indicate that the SVOD model is the wrong strategy in India.

But it merely says that SVOD providers might benefit by experimenting with a mix of packages that offer limited ads as an alternative to the traditional ad-free subscription plan. They could also allow users to choose which price plan suits them.

OTT service providers could also explore and test, which ad plans resonate best with their customer base. For instance, serving ads during weekday streaming and limited ads or no ads on the weekends (or vice versa).

It is not difficult to guess that Apple will initially target the premium end of the SVOD market.

But as it later climbs down the subscription pyramid, it may do well to heed these preferences.

In fact, the internet usage in the rural markets is seeing stronger growth than urban markets.

An EY 2019 report said that urban internet users grew 19 percent from 314 million to 373 million between December 2017 to November 2018, while rural internet users grew 49 percent to reach 197 million.

It will be in these markets where experimentation with cheaper subscriptions and limited ads will encourage more people to opt for video streaming platforms and move from pay-TV services that includes high advertising loads beyond the users’ control, as well as premium subscription rates.

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First Published on Sep 13, 2019 08:56 pm
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