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Marketing Management
Tapmad: Response
to Customer Churn
Zoha Kamal
Mustafa Hassan
Syed Asad Zaffar
Osama Athkar Khan
MBA-I, Morning - Fall 2019
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Tapmad: Response to Customer Churn Marketing Management - IBA, Karachi
Company Background
Tapmad is an over the top (OTT) media service based out of Karachi. It is basically a streaming
media service offered directly to viewers over the internet, just like Hotstar in India, where you
can watch both live television and video-on-demand, movies and TV shows. Currently it boasts
thousands of shows/drama episodes and tons of movies a month from 70 local and 30
international channels.
Yassir Pasha was a quant trader working in hedge funds and investment banks in the UK before
coming to Pakistan in 2017, and venturing into a whole different arena. How exactly did he hope
to come out strong in an unexplored setting? It wasn’t as difficult as one would imagine: his father
is an industry veteran who set up FM 100 radio station and TV Asia in the UK. “He has a lot of
connections with major channels like ZEE which helps us secure exclusive contracts” the CEO
says.
They have adopted a freemium business model: basic content free for everyone plus exclusive
content for subscribers. Besides subscription the website and app also generates revenue from
online advertisements.
Given the subscription-based model, it was essential to embrace a recurring payments
methodology for Tapmad to succeed. But given the low debit and credit card penetration, it was
a massive challenge to make it available to the masses in the country. As a workaround the issue,
Pasha along with Salim Karim, co-founded Simpaisa, a sim-based payment solution as the name
suggests.
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Tapmad: Response to Customer Churn Marketing Management - IBA, Karachi
With SimPaisa, Tapmad was able to charge customers on a weekly basis from their mobile
balance. So there is no need to have a bank card to be able to use the service anywhere in
Pakistan.
The initial funding for the idea came partially from Pasha and his family and the remaining came
from Planet N, a Karachi-based holding company. Earlier this year, Pasha closed the series A
funding raising USD 2.5 million from MBC – the Saud family-owned Middle Eastern media giant —
and Daman Investments, a UAE-based financial firm of Gargash Group.
Industry Overview
Media consumption in Pakistan is increasingly happening in digital formats. The increase in the
number of devices capable of supporting digital media along with the increase in bandwidth in
the country, has enabled Pakistanis to access media content of their choice be it information,
entertainment or social activity anywhere, anytime. Globally, the rise of digital media players such
as Netflix, Hulu, Amazon, Apple TV, Boxee, and Roku, etcetera are challenging the traditionally
maintained supremacy of the telly as the prime entertainment hub. Mobile devices drive the
digital consumption (See Exhibit 1 for Global Monthly Mobile Data Consumption)
As for competition in Pakistan, Netflix and Iflix have marked their presence in the country with
monthly subscriptions. And then there is the home-grown StarzPlay trying to do something
similar. Where does Tapmad stand?
“Netflix has its own niche: those who can afford to pay $10 a month and watch pretty much just
the English content while iflix & StarzPlay is simply a replica, but slightly cheaper and Goonj has
just the local stuff. We, on the other hand, have a mix of Pakistani, Indian and other content so it’s
more wholesome and relevant to the local market,” Pasha says.
The key levers for subscription consideration in the digital space are Term, Type and Structure.
Term refers to the time duration of the subscription: daily, weekly or monthly. Whereas Type
entails the data and usage limitations: whether the user gets free data or not or if the user has
limited or unlimited usage access. And lastly the Structure defines the content it holds: niche,
limited or all the content available on one platform. (See Exhibit 2 for Detailed Digital Content
Monetization Framework). Tapmad aims to move from niche to providing all the content in one
platform with a weekly and monthly plan priced much lower than the competition.
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Tapmad: Response to Customer Churn Marketing Management - IBA, Karachi
Market Analysis
“The advent of OTT players, both domestic and international, is providing consumers with
multiple choices around content consumption. We are seeing a shift in consumer’s attitude from
content ownership to having easy access to a vast library at any time and place." - Shridhar
Subramaniam, President India and Middle East, Sony Music Entertainment Inc.
Content Libraries
Netflix dominates the content market with the highest number of VODs and this is partially due to
their original content. Ifilix and then StarzPlay follow in terms of Video On Demand libraries.
Tapmad has the added advantage of providing live video channels besides VODs. Goonj also
adopts a hybrid approach but lacks way behind in terms of having a plethora of content.
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Tapmad: Response to Customer Churn Marketing Management - IBA, Karachi
The Challenge
Tapmad has crossed over 500,000 paying subscribers as of mid-November 2019 and Pasha’s
ambitions are not over yet. Generating traffic and leads is a massive challenge for any marketer
but this can easily be tied back to the struggle to keep the existing customers around.
One of the biggest challenges for Pasha is Customer Churn. This may sound a bit undertaking
but he has realized that it is worth prioritizing. A 5% increase in customer retention can increase
profits by 25% to 90%.
Lets say, Tapmad runs a digital campaign and adds 2000 new subscribers in a day, gets 1000
returning customers, loose 1500 existing customers, then that leaves us with net 1500 customers
coming in that day. On the other hand if the digital campaign was not running, the company
would have simply lost 500 on that specific day. Divide that by the customer base and that’s the
churn rate.
So basically the company has to keep on marketing to acquire new customers in order to survive.
Otherwise, the customer base will slowly disappear and hence revenue will be lost.
Price
Tapmad is already priced way below all the competition. It has however adopted the carrier
billing payment gateway and the average balance in a cell phone is Pakistan is close to 1 rupee
due to multiple ownerships of SIMs by a single user and the popularity of bundles and packages
hence most people don’t keep balance on their phones. Hence, it is important to get the user to
top-up before the subscription renewals arrives.
User Experience
User experience can be improved by making the platform more sticky. Besides VOD and Live
Channels, users can stay engaged with the following:
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Tapmad: Response to Customer Churn Marketing Management - IBA, Karachi
1. Mobile Lottery
2. Gamification
3. Relevant Recommendations
Product/Market Fit
Poor product and market fit comes from the content side. If Tapmad has content that pulls
customers to them then that would require less effort to retain that customer. On the contrary, if
there is no good content and the aim is to just meet the target and not sell to the good-fit
customers, then that will eventually lead to more churn.
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