Times Internet’s on-demand video service, BoxTV, has launched telco billing for its subscription services in partnership with Estonian payment service Fortumo, less than a month after Fortumo inked partnerships with four Indian telecom operators – Idea Cellular, Vodafone, Airtel and Tata Docomo. While BoxTV has been pitched as a premium service, targeting users with credit cards with its online content, the inclusion of telecom operator billing essentially offers a wider reach for BoxTV.
How Much Does BoxTV Make From This Deal?
BoxTV is charging Rs 20 for a 1 day pack, Rs 49 (for a 3 day pack), Rs 99(7 day pack) and Rs 150(15 day pack). Unless they’ve got a differently negotiated deal with Fortumo, below is how much BoxTV makes from these options.
So, at best, BoxTV will make 45% revenue share on these deals, excluding VAT.
Why Only Short Term Packs?
What’s is particularly noticeable here is the distinction between the payment options for the short term and longer term packs. The billing options mentioned above are only for short term packs of less than a month, and only for mobile operators. What’s more, these packs are not renewed automatically. For a month and above: BoxTV charges Rs 199 for a month, Rs 499 for 3 months, Rs 799 for six months and Rs 1499 per year, and offers only credit card as an option.
So why is BoxTV doing this? BoxTV says that their data suggests that “a lot of online content consumption happens on weekends and BoxTV’s weekend pack makes it easy for people to watch premium content without paying for an entire month”, which is why the short term plans.
Maybe Fortumo doesn’t offer recurring billing, or billing higher than Rs 150, which BoxTV would need to charge for parity in its monthly billing. Our take is that these are largely promotional offerings, to try and get users to pay for content in the short term, and use this pricing as a gateway to monthly subscriptions. The revenue share on offer clearly isn’t substantive enough to interest BoxTV to expand it to monthly recurring payments, for which they would rather use credit card based recurring subscriptions, for which transaction fees are likely to be 5% or less.
Next Step: BoxTV might want to approach DTH players for doing what Ditto TV has done (albeit with a group company DishTV), and offer BoxTV subscriptions as a prize on TimesPoints.
BoxTV competes with the likes of BigFlix, Spuul, Hungama, and, of course, YouTube.
Also read: Fortumo Partners 4 Indian Telcos To Launch Direct Carrier Billing; Telco Rev Share Ratio