Why Paytm needs to be India’s ‘Patreon’
A couple of days ago, I wrote an article where I talked about how newspapers need digital subscriptions to survive. Jeff Bezos seems to have read my blog cause half a day later, Amazon launched their subscriptions model.
As reported by Techcrunch, Subscribe with Amazon aims to make Amazon the place to discover, subscribe to and manage a range of digital subscriptions — from streaming services to subscription-based apps, from meal planning services to online fitness classes, and much more. It also offers consumers a single destination where those subscriptions can be managed via an online dashboard.
A subscription offering is not only beneficial to consumers but also makes it easier for businesses as they can handover the hassle of payments. Till now the payments space has largely been eclipsed by one-time-billing rather than subscriptions. However, to say that Amazon is the first entrant in this space would be way off the mark. PayTM made strides into this space when it launched recurring billing service in March and launched a developer API. Their offering is at a stage of infancy and PayTM doesn’t have a specific way to manage/discover subscriptions yet. In my opinion though, the real winner in the Subscriptions space has been this stealthy company that has targeted subscriptions not for businesses but for individuals- Patreon.
Patreon’s goal is to help every creator in the world achieve- sustainable income. Fans of creators(or patreons) fund creators through Patreon on a monthly basis. Fans pay the creator by pledging an amount of their choosing for new content generated. These fans get access to Patreon-only exclusive content which could be Nerdwriter giving away mugs to all Patreons above $5 pledge, Waitbutwhy making the Patreons part of the advisory council, or Pentatonix giving access to exclusive Behind the scenes footage.
Patreon was started in 2013 by Jack Conte, when he realized he wasn’t able to fund himself solely through Youtube despite having a good viewership. Patreon went on to become extremely important for over 50,000 creators who have raised over $100 Million for their work.
Patreon’s riding on the changing mindset of consumers. As the New York Times reports in its article- “How the Internet is saving culture, not killing it”
In the last few years, and with greater intensity in the last 12 months, people started paying for online content. They are doing so at an accelerating pace, and on a dependable, recurring schedule, often through subscriptions. And they’re paying for everything.
For far too long, consumers have deemed content on the web as their free birthright but slowly, that view is shifting. In India, the transition is bound to be slower but with increasing popularity of Hotstar, Netflix, Amazon Prime and decreasing data costs due to Jio’s aggresive pricing, this shift is speeding up. In my view, PayTM clearly stands to be in an ideal position to ride this trend.
PayTM should focus on subscriptions not only for established companies but also for individual creators. Established firms like Newslaundry , the Ken, Supr grocery have been using subscription models. PayTM can provide solutions to these sites by giving a Subscribe through PayTM button. Other media startups such as TVF which has been facing monetization challenges can leverage such an option almost immediately and experiment with it.
I will talk about the why such a model is well suited for PayTM-
- Trust — PayTM has earnt its trust in the financial services space. Consumers trust the brand and if a website has an option ‘Subscribe through PayTM’, they believe that PayTM would have done its due diligence. Consumers also know that they can pause/ stop directly through PayTM directly and hence there is no hassle of cancellations.
- Central place for subscriptions — PayTM is already the central place for important subscriptions. Electricity, Mobile recharge, LPG are monthly renewals that we automatically do through PayTM. PayTM should focus on discovery of new subscriptions which will help new content creators be discovered.
- Ease for creators- India’s creators are insanely awesome. One of the main reasons that they have not been able to take off is the lack of incentive. PayTM can give creators an easy to use interface that lets them setup the service for their content. If content creators start experimenting with exclusive content only to subscribers, they can start obtaining revenue for the effort that they are putting into their art.
- Micropayments — By Micropayments, I don’t mean the traditional bitcoin payments. PayTM is a extremely easy to use for small payments. Hence PayTM can let creators/firms charge how much ever they choose. Rs 55 per month, man! As much as the Butter Dosa in your hand.
- Regulation- Banks will find it really hard to compete with PayTM in the subscriptions space. The NACH service is NPCI’s solution to facilitate interbank, high volume, electronic transactions which are repetitive and periodic in nature. However NACH hasn’t gone completely digital and requires your signature as authentication. Hence, PayTM is the only player who has the ecosystem required to manage a subscriptions service.
Jeff Bezos has always talked about how removing the tiniest amount of friction from ordinary activities improves customers’ lives drastically. In my view, digital subscription has been a huge problem for a lot of industries and a move from PayTM into this space can accelerate digital India.