Bharti Airtel announced yesterday, a partership with Reliance ADA group owned online streaming and DVD/VCD rental service BigFlix, to offer consumers the ability to watch a stream of 500 movies, 100 TV shows, 100 Trailers and 100 music videos at Rs 229. The first question that came to my mind was – if the content is already available on live streaming on BigFlix, then why would anyone pay for it?

Switching To Subscription

Reliance Entertainment COO Manish Agarwal told MediaNama that the company is removing 500 select movies from its free streaming website – those that get maximum views on free streaming – into a subscription model. Airtel movies is the first subscription service that has been rolled out, and they are talking to other telecom operators as well. There is a change in business model in the offing, and Agarwal says that they’re taking their cues from the US (where NetFlix has also adopted a subscription based streaming model).

Agarwal agreed that advertising supported live streaming isn’t feasible or profitable, and while, with the popular content being removed from its website, views and hence advertising will be impacted in the short run, but the company now believes that subscription is the way forward. Additionally, Agarwal believes that “the only way to ensure a quality consumer experience is through partnership with telecom operators.” Airtel has assured the company that consumers will be able to stream movie content at 2mbps, something it also did for the streaming of the Indian Premier League on YouTube last year. Keep in mind though that the free advertising supported model will remain, just that some content will be made premium, and for subscription. Subscription content will be advertising free on Airtel.

Will It Work?

MediaNama readers should keep in mind that this portends yet another switch in the online video streaming business – while consumption has scaled, the business has not, and this is pushing the company from a destination, platform or network approach to an access/subscription and Value Added Services approach. In the past, subscription too not found takers online: aggregation sites like Tinselvision, Jump.tv have launched and shut down or changed models.

Eye On Mobile

Additionally, in the next two months, BigFlix intends to launch mobile content in short formats with subscription model as well. Agarwal agrees that “the last mile on mobile isn’t ready yet, but we’ve taken a decision to go down the mobile subscription path and will wait for the market to mature. The mobile content service is expected to be launched in two months, and by the looks of it, might end up competing with Hungama.

Does Airtel Have The Capacity To Support Streaming Movies?

Now, if you’ve been an Airtel Broadband customer for a couple of years, and had subscribed to an Airtel Broadband plan a year or so ago, you would have an unlimited broadband plan at the promised speed. A couple of years ago, they changed plans such that beyond a certain data limit, they reduce browsing speeds to 256kbps. Airtel calls this a ‘Fair Usage Policy’, and had told us two years ago that “We have observed that few of our customers have been using an excessive amount of bandwidth, thus impairing the browsing experience of an overwhelming majority of broadband users. To ensure that all our customers enjoy the best quality broadband experience, we have introduced the Fair Usage Policy.”

We’re awaiting a response from Airtel on whether it has the bandwidth for providing streaming of 500 movies a month, alongwith 100 TV shows, 100 trailers, and 100 music videos. Can’t a few customers viewing this content also impair the browsing experience for others?

If it has the bandwidth, then it appears that the reasoning for the Fair Usage Policy is fallacious, and it follows logically that Airtel has restricted bandwidth/capacity for existing customers using what they call a ‘Fair Usage Policy’, so that they can offer ‘Value Added Services’ for a price to the same customers. If it doesn’t have the bandwidth, then it shouldn’t be offering Airtel Movies, else it might spoil the experience for customers paying for broadband.

We’ll update with Airtel’s response, in case we get one.