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Offline sales, online service: can topup cards work for streaming platforms?

In 2018, Hoichoi announced that it would be selling topup cards to woo subscribers in smaller towns without digital payment methods. This week, ALTBalaji launched a similar payment method, in partnership with PayPoint. Just how effective is this unusual strategy — selling a digital subscription through physical card sales?

Who buys topup cards?

Hoichoi, which primarily targets Bengali-speaking audiences, found out that topup cards helped it in an unexpected market — B2B clients. Over the last two years, the company says it has had some success selling its topup cards in bulk to businesses, who then hand it out to employees as a perk (à la Sodexo), or bundle them with sales to customers. Soumya Mukherjee, Vice President of Revenue & Strategy at Hoichoi, told MediaNama that they have already made as much money from such sales in half of 2020 as they had in all of 2019.

Then again, these cards are not going to smaller towns in a major way, which was what Hoichoi originally intended. Vishnu Mohta, one of Hoichoi’s Co-founders, said that the cards were conceived to “help us reach the masses in Tier II and Tier III cities”. Mukherjee said that the company hasn’t explored the retail supply chains to distribute cards deeply, and that plans to expand the top-up cards’ availability this year were postponed because of the COVID-19 pandemic. The cards also helped the company in another unexpected way: their expansion to Bangladesh. Digital payment methods in Bangladesh have not matured to the extent they have in India, Mukherjee said, so they partnered with gadget retail stores and supermarket chains to sell subscriptions. The topup card is now Hoichoi’s second largest payment method in that country, behind bKash, a mobile wallet service.

Can topup cards scale? Our take

One big challenge with topup cards is that subscription video on demand tends to benefit from recurring payments. But topup cards need to be purchased in a physical retail store, after each billing cycle. So for a streaming service to retain the subscribers it makes through this payment method, they have to either make sure their content is worth going through the trouble of buying another card, or hope that by the end of the billing cycle, customers have a digital payment method they can use. And that is assuming that viewers even want to renew. If not, this revenue stream risks being crowded with one-time purchases that create a revolving door of customers leaving in large numbers.

One thing Hoichoi and ALTBalaji have going for them is they don’t really do recurring subscriptions in a big way in India — you buy a quarterly or annual subscription, and you have access for that period of time. For streaming services that are comfortable with the churn inherent with that kind of model, topup cards can be a nice way to make some extra money from customers unable or unwilling to pay automatically every month. But don’t expect to be able to go to a mobile recharge shop for your next month of Netflix anytime soon.

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MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

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    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ