As per the reports, Tata Sky will cancel channels or packs for about 7 million subscribers from June 15 in a bid to reduce their monthly bills and retain them on the direct-to-home platform.
Why Would This Happen?
Basically, the rationalization exercise by the DTH operator is aimed at retaining customers with monthly billing of Rs 350 monthly or less.
In the past two months, the company lost over 1.5 million customers, after they simply canceled or failed to renew their subscriptions, saying it is unaffordable.
According to statistics, almost 70% of 5 million subscribers who logged in to the Tata Sky website or app in May wanted to drop channels in order to reduce their monthly bills.
It seems that viewers are losing interest because of the unavailability of fresh content and live sports, while the COVID-19 induced slowdown has affected the spending power of some consumers.
What Does Tata Sky Say?
While talking about the situation, the MD of Tata Sky, Harit Nagpal said, “One million inactive subscribers came back to our platform in March, once the lockdown was implemented. However, 1 million went out in April and another half a million didn’t recharge in May,”.
Further, the company’s analytics team found that deactivation was mostly by subscribers with monthly billing of less than Rs 400.
Moving ahead, Nagpal explained, “The analytics showed which customers were vulnerable and found it difficult to pay. So, rather than losing customers entirely, we decided to drop some packs and channels and reduce their monthly bills,”.
“So, for the first time, we will use analytics to downgrade and not up-sell packs,” He added.
Interestingly, Tata Sky has identified 6-7 million of its 18 million subscribers who will benefit from the exercise and save Rs 60-100 per month.
How Would This Affect?
According to senior vice president of research at IDFC Securities, Rohit Dokania, Tata Sky’s decision is a good move to retain subscribers.
Dokania said, “As it is difficult to gain new subscribers in the era of video streaming and OTT, Tata Sky’s move will ensure that the customer is retained on the platform for a longer period of time,”.
“However, as broadcasters are already hard-pressed for advertising revenue, it will be interesting to see how they will take this new arrangement,” he added.
Moreover, Nagpal said downgrading customers was better than losing them.
He further added, “If I am able to control churn, broadcasters still earn, but if the customer leaves, there is no revenue to share. I think it is time to rationalize the packs and retain the consumer. When things go back to normal, we expect customers to start adding channels and we, too, will go back to promoting upgrades,”.
Nagpal said, “If I am able to control churn, broadcasters still earn, but if the customer leaves, there is no revenue to share. I think it is time to rationalize the packs and retain the consumer. When things go back to normal, we expect customers to start adding channels and we, too, will go back to promoting upgrades,”.
Now, Tata Sky has started giving a 15-day notice to subscribers of the change in their packs.
If consumers want to retain the channels being discontinued, they have to simply make a missed call.
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