Calculate an ideal 'Streaming Media' company's revenue in India - Part 1

Note: The contents of this blog post is just my speculation.

Streaming media companies have started to make a presence in India. Netflix, Amazon Prime, Jio Cinema/TV, Hotstar, and others have caught a follow ship among the people. Some are tied to an already monetized service while others charge a monthly/yearly fee.

What has made these streaming media companies to come to India? For me the answer is Jio. Jio was the disruptive force that was required to speed up the penetration on broadband data in India. After Jio, many of its competitors also provided the 1 GB per day data at nominal prices which seemed never possible in India before the entry of Jio.

For how much time does a 1 GB data last per day. Well, if we consider a low video quality stream takes around 150 to 170 MB per hour, then the 1 GB will last around 6 hours. 6 * 60 * 30 = 10800 minutes per month. Considering that most people will not view 6 hours of content every day and many would want to view at a medium to high video quality, lets consider an average value of half these minutes per month. Say 5000 minutes per month.

Lets put a value to these minutes. Say INR 0.02 per minute. 5000 * 0.02 = INR 100 per month. In India, I think the market for a streaming media company can go to anywhere from 30 lakhs to 1 crore people for a mass appeal company. Lets consider the higher value of 1 crore subscribers.

So, 1 cr * INR 100 = INR 100 crores per month before taxes. Say the streaming media company takes a cut of 30 percent, then the company stands to get INR 30 crores and the remaining INR 70 crores per month are for the content creators.

Lets talk about the content creators and subscribers. Suppose a subscriber likes to watch content of only 2 content creators, suppose abc and xyz. Then from his/her subscription amount of 100, 30 will go to the streaming media company and the remaining 70 will be given to the 2 content creators in proportion to the time the subscriber spent on the 2 contents.

------------------------------
Please find the Part 2 of this article here: https://aajkyakaroon.blogspot.com/2019/02/calculate-ideal-streaming-media.html