Yesterday, Meta announced its plans to roll our an ad-free subscription service in India. With Twitter Blue & YouTube Premium are struggling why Meta’s push to ad-free won’t work👇🏼
For the record, Twitter has 27 million users in India and only ~20K paying subscribers – that’s nothing for the giant ~ ₹1.5 Cr monthly revenue. Same with YouTube‘s 8L monthly premium subscribers making ~ ₹10 Cr in revenue.
India’s $$$ contribution to Meta is peanuts 🤐
Just over the last financial year, it saw a revenue of 16,189 Cr ($2B), which is also a 74% YoY growth. Compare it with overall revenue, which is $114 Billion – just a 1.7% contribution – when India is the biggest market for Meta.
But, why are the numbers so poor? ✨
In a country where SUVs/ luxury cars are sold like hot cakes, the social giants have struggled to make any substantial subscription money. And it has deeper reasons.
First/ Indians are still finding the internet 📱
With 75 Crores Indians with access to internet, a staggering 40 Cr live in rural India. The last few years (2016 Jio wave onwards) the growth has come largely from rural India.
Second/ social media + content = timepass ⌛️
It isn’t really a must-have product, even if users say so. It’s classic “I will feel sad if the product stops working but I won’t pay money when I am using it”. The YouTube and MXplayer numbers keep showing this metric.
Third/ few players who figured are after a different market 🪐
Amazon Prime has 60 million+ subscribers at ~ ₹1,000 annual subscription while Netflix has ~10 million subscribers at a ~ ₹200/ monthly (₹2,400 annual) subscription.
I wrote about this last week. Either build a $10 ARPU (average revenue per user) business and sell to 10 Crore Indians or build $10,000 ARPU business and sell to 10,000 Indians. Meta is trying to do something in the middle.
I’m going to take a step back and ask myself, “What is the real value being created by Meta’s products Instagram, WhatsApp & Facebook?” – the answer is “captive audience spending a lot of time”.
This means the real value is – ‘attention’. Attention from users who have the “appetite to buy” stuff – that’s how you will make money, right? So the real value (revenue) capture = controlling buyer journey.
Ads on the platform cover the “discovery”. Post-click, Instagram gets nothing of the “sale”. Plus, consumers don’t build “trust” for new brands on Instagram. This is the whitespace.
Discover to purchase coverage using STORES (where consumers can buy directly within Instagram, is the larger money to be made – not subscriptions, period.