Subscribing To Pakistan

Updated: Oct 24, 2020

Subscription Services Are Troubled In Pakistan? Here's Why.

Back in 1990’s when I was a kid watching movies, listening to songs, and playing games at your home was a dream for many of us. I still remember a video store was a hub of entertainment, where we could buy or rent out movies, audio cassettes, and games. But, over the time rapid advancements in technology has revolutionized entertainment industry along with the business operations. Most of the entertainment of 1990’s is replaced by internet and gadgets. A movie, game or favourite song that takes hours of planning and efforts is now readily available at a click. For instance, Netflix, Spotify, Apple Music, Hulu, Steam, etc.

However, the change in dynamics witnessed over the last two decades due to technology gave rise to an E-commerce industry which eventually became a necessary part of our life. The most trending business model in the E-commerce industry is the subscription business model, where customer pays a recurring price at regular intervals to access services. A subscription model is booming and attracting many individuals all over the world. According to an estimate there is a 200% annual increase in the subscription services since 2011. Subscription companies like Netflix, Hulu, Spotify, Apple, and Amazon Prime have millions of subscribers and are worth billions of dollars.

The Problem:

Subscription based services are growing at a rapid pace but unfortunately in Pakistan subscription services aren’t getting much fame. Even though the services offers great value but still there are number of reasons why subscriptions aren't fascinating for many of Pakistanis. Many international subscription services like Netflix, Spotify, iTunes, etc. only accepts payment through credit/debit cards. Whereas in Pakistan, only 49 million people hold a bank account which usually has online payments turned off by default for most banks. Another significant factor is the pricing, many subscription companies ignore the amount they charge in a country that has relatively less to spend on commodities like these. For instance, Netflix- A standard plan cost PKR 1,200 which is actually very expensive for a country whose average monthly income is PKR12000-PKR13000. A very good example of a streaming subscription service that became very popular in a short period of time is Nayatel. I really liked how Nayatel targeted the Pakistani market, where initially the service was free for all NT users. Although they now charge PKR150 which is very reasonable compared to the other services. The best part of Nayatel's service is that the payment is packaged with the monthly payments you are making for Internet so you don't have to go the extra mile, though the bad point being that this service is only exclusive to Nayatel customers as of yet.

Pakistani people are very sensitive when it comes to the bank channel. According to survey more than 80% of the people do not prefer using their cards for any online store or a service. Therefore, it is very important to integrate local payment methods i.e. Mobi Cash, Easy Paisa, J Cash, U cash etc. for any subscription service. A failed example of this could be iflix even though the amount is very reasonable but they didn’t integrate local payment offer. Lastly, the legality of content distribution of these services is very strict in Pakistan. For instance Netflix in USA has a lot more content due to easier licensing and management provided in that region.

The Fix:

  • Implement local payment methods such as Easy Paisa to make it easier for people without an active bank account to make payments.

  • Introduce the concept of 'regional pricing' for areas where these services are considered expensive, gaming industry already does this with the likes of steam publishing their games at massive discounts in countries like Russia and even sometimes Pakistan.

  • Collaborate with the local ISPs PTCL and Nayatel to offer better services or integrate your hub alongside theirs to make the process more convenient and less exclusive.

  • Lastly, advertise and invest; many people still are not aware of services like iVOD or Netflix in the region simply due to the fact that the Television still holds monopoly in most households, if more content from local artists is produced it can be a road to success for services like these; this has proven to work in India as much of Indian content is being made on services like Netflix and Amazon Prime TV.

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