Being an avid cricket fan, I was not at all happy when IPL live streaming was disrupted with a Hotstar's "To continue Please SUBSCRIBE" kind of popup message on my laptop screen. I was surprised for a while since i could watch it for free on Hotstar app in my phone, most probably due to Jio subscription. I wondered what if Hotstar allows free live streaming of IPL matches on it's app for all smartphone users, keeping live streaming from laptop reserved for subscribed users.
How can Hotstar benefit from such a discrimination?
Hotstar's subscription plans are just like that of any other media streaming service i.e. subscribe for ad free experience and exclusive content... and just like others, it makes money out of subscriptions and ads displayed on it's platform.
With ads rates being quite high due to viewership reaching as high as 10 million during some moments of an IPL match, Hotstar can go for all ad based revenue model on all devices for IPL live streaming. But the fact that they have subscription plan for ad free experience reveals the insight that subscription from an individual pays them more than ads being directed at him/her.
Well then they can have only subscription based option for IPL live streaming. This is also not an viable option for a country like India where only small proportion of interested population is actually capable to pay for such plans. Intense competition in Indian smartphone market to capture larger market share has led to players getting involved in price wars. The 4G revolution in India by Reliance Jio's entry has led to India having cheapest 4G plans in the world. These two simultaneous events in last two 2 years, have led to huge population from tier-3 cities, tier-4 towns and villages to get online and enjoy live streaming for the very first time. If Hotstar opts for only subscription based model for IPL live streaming, they will miss out on ad revenue from this new audience.
The right option is to have both streams open as source of revenue i.e. getting people who are capable to subscribe and by directing ads on who are aren't.
By denying interested people to live stream IPL matches for free on big screens, they are either getting them to watch on smartphones or getting them to subscribe. But why big screens like P.C., laptops and T.V.s ?
The motive behind such a discrimination should be that with such a practise, Hotstar will be able to successfully segment it's market/user-base based on spending capabilities without actually knowing their viewer's income/wealth status and thus will be able to get people who are essentially capable, to pay for their services.
Generally, laptop users are college students and working class professionals from tier-1 and tier-2 cities of India. These users also constitute a major portion of Indian youth population. It is proven that young population exhibit higher propensity to spend money on subscription based services and since these people reside in top tier cities, they also posses high spending capacity.
Moreover, If a person is live streaming on laptop or T.V., then there is a very high probability that person has subscribed to some broadband plan. This broadband plan subscription is enough to justify for his/her high-spending capability and very much increases chances of that person getting subscribed to one of the plans. This is how Hotstar will be able to segregate their users based on spending capability.
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