Reliance Jio’s hurdle: After its disruptive entry into the telecom industry, billionaire Mukesh Ambani-led Reliance Jio will face a challenge to monetize users as it moves from free subsidized content to a freemium model in future, according to a report. A latest report by mobile media and strategy consultant firm Strategy Analytics finds that as the firm migrates from its current model of providing free subsidized content to a ‘freemium model’ in future, wherein the firm will charge users for using more advanced features, it will face a huge challenge, as willingness to pay remains low in India. “Identifying content that users are willing to pay for combined with business models and a user experience that resonates with target customer segments will be critical for successful monetization,” the report said.
Reliance Jio’s extensive suite of free entertainment apps has been an essential component of its strategy to go beyond low-cost voice and data pricing, according to Strategy Analytics.“Jio is using content successfully to differentiate its proposition to mobile subscribers, and to acquire and retain subscribers from competing operators. Jio’s competitors Bharti Airtel and Vodafone are being forced to react by beefing up their own content strategies,” Brice Longnos, Analyst, Strategy Analytics Wireless Media Strategies said.
Taking stock of Jio’s two year completion earlier this month, Bharti Airtel’s Sunil Mittal said that that the last two years have reshaped the landscape of the entire industry, as many firm have shut down leading to a complete re-ordering of the market. “Everytime a stronger player comes in the marketplace, you try to get better, sharpen your skills, take out waste, you increase customer focus, that’s what all good companies do. These last 2 years, have reshaped the landscape of the industry, 7-8 companies have gone away by way of closures or bankruptcies,” Sunil Mittal told in an interview to ET Now.
Now, willingness to pay for content will be key for Reliance Jio inorder to make a successful migration to freemium model. “Reliance Jio is investing in content and will expect its entertainment businesses to deliver revenue in the future. Whether it is a freemium or ad-supported business model, successful content distributors, including Jio, need to assess demand and willingness-to-pay for different types of content in order to successfully transition from free to freemium business models. Furthermore, Telcos need to do a better job in leveraging their subscriber data in order to monetize through digital advertising,” Nitesh Patel, Director Wireless Media, said.
