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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 

Tapmad: Response to Customer Churn Marketing Management - IBA, Karachi 

Tapmad: Response to Customer Churn  

Early  one  afternoon  in  mid-November  2019,  Yassir  Pasha,  31,  gazed  at  his  laptop  screen,  going 
through  a  dashboard,  and  reflected  on  the  past  two years since he launched tapmad. Pasha was 
distressed  seeing  the  numbers  go  up  and  down  and  summoned  his  marketing  team  to  discuss 
the  issue.  From  the  first  day,  Pasha’s  ambition  was  to  make  the  streaming  service  go  viral  and 
reach  every  inch  and  corner  of  Pakistan.  That  seemed  to  be  a  long  shot  considering  the  loss  of 
customers  making  it  hard  to sustain a base. A series of stormy exchanges within the team did not 
lead to anything but Pasha with increasing consternation. 

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 

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 

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 

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. 

Pahsa  expects  to use the capital in the next two years to market more aggressively, acquire more 

content and, as a result, increase the user base; which is the bread and butter of the company.   

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.  

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.  

Driving revenue through subscriptions and ads 

StarzPlay, ifilix and Netflix have positioned themselves as premium services and derive all of their 
revenue from subscription fees. Goonj on the other hand has generates revenue from ads 
keeping the user base free from any charges. Tapmad has a hybrid approach, where revenue 
more than half of the revenue is generated from subscriptions and the remaining from 

Evolving payment mechanisms will drive OTT content monetization  

In addition to monetization models, the payment mechanism is also important in driving the OTT 
market in Pakistan. There are multiple payment options besides debit and credit cards for 
instance 3​rd​ Party Wallets like Keenu, telecom wallets like EasyPaisa and internet banking. 
Tapmad has taken the additional step ahead by adopting Carrier Billing which has the highest 
penetration in comparison.   

Winner takes all economies  

Global trends suggest that digital on-demand content market follows ‘winner takes all’ economics 
and the early movers have significant advantage over the late entrants. This can be corroborated 
by the fact that YouTube has a 60% market share globally in user generated content category 
and 72% share in Indian on-demand video content category. Similarly Pandora has a 68% market 
penetration in the US music streaming market. The second best players in these markets only 
have around 10-20% market share. Similar trends are predicted in Pakistan with Netflix on the 
lead with VODs and Tapmad on lead with Live Video Channels.  
See Exhibit 3 for key levers for the digital video industry 

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.  

The way forward 

There are multiple factors that affect customer retention and hence lead to churn. The main 
causes are: 

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: 

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.  


Tapmad: Response to Customer Churn Marketing Management - IBA, Karachi 

Exhibit 1: Global Monthly Mobile Data Consumption (Exabyte) 

Tapmad: Response to Customer Churn Marketing Management - IBA, Karachi 

Exhibit 2: Digital Content Monetization framework 

Tapmad: Response to Customer Churn Marketing Management - IBA, Karachi 

Exhibit 3: Key levers for the digital video industry