Reliance Jio kicked off a new segment of telecom subscribers that have grown to rely heavily on the apps that provide them free access as a part of the data recharge. The Jio apps such as Jio TV, Jio Music, Jio Cinema, and Jio Mags are offered to the Jio customers, basically, free of cost. However, a new report suggests that Reliance Jio could be mulling to introduce the freemium model to its free apps, which could potentially bring along a set of challenges.
Strategy Analytics in its ‘Reliance Jio Targets Digital Content Leadership’ report has said that the Mukesh Ambani-owned company is looking to move from the free model to a freemium model. However, the customers who have so far unanimously adopted to enjoy the free services will show an unwillingness to the freemium model, which could become a big challenge for Reliance Jio. A freemium model lets the customer access some basic features or services without any charges but some premium features require him/her to pay.
Ever since it commercially commenced its business in India, Reliance Jio has been on the forefront to provide jaw-dropping offers and services at rock-bottom prices. It has devised its strategy to create a user base that has become loyal in the run, however, not as much loyal as they would willingly pay for the services that they have been using without charges. “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,” says Strategy Analyst in its report.
As it turns out, Jio has led the rival companies to dole out similar offerings to the customers without charges. The content players hailing from the telecom sector are in a tussle to vie for the top spot among the consumers. Brice Longnos, analyst at Strategy Analytics Wireless Media Strategies, said that Jio has succeeded in winning over the customers with its content strategy, which led to the rivals sprucing up their content strategies. “Jio’s competitors Bharti Airtel and Vodafone are being forced to react by beefing up their own content strategies.”
Jio recently announced the merger of its music service Jio Music with Saavn to broaden its digital content portfolio, in addition to signing deals with Eros International to integrate its digital platform on its OTT apps, as well as shaking hands with Roy Kapur Films that will develop content for the Jio branded apps. Besides, Jio is guaranteeing a healthy run of the content from the media business of its parent company Reliance, which has its own OTT service called BigFlix. Reliance also has bought stakes in TV news channels and production houses.
“Reliance Jio is investing in content and will expect its entertainment businesses to deliver revenue in the future,” said Nitesh Patel, Director Wireless Media, further adding that the willingness of the customers to pay for the content, irrespective of the distribution model (free, freemium, or premium), should be taken into assessment. However, he suggested in the report that the telecom companies “need to do a better job” so as to leverage the data from their subscribers to monetise the content.