The new RBI rules demanding identification for automated payments went into effect earlier this month, making it difficult for OTT (over-the-top) streaming and news media providers to retain their subscriber bases. Existing and new members have found it difficult to renew their subscriptions due to the new requirements. Platform executives and media analysts believe the rules will be particularly burdensome for new users, particularly those from older generations or those from semi-rural areas who are less tech savvy; they believe services will see a drop in renewals and new registrations after seasonal content such as the IPL (Indian Premier League) or the T20 World Cup is exhausted.
The fact that many people regard entertainment as a luxury rather than a need might exacerbate the situation. While exact figures will not be available until the end of the quarter, a downward trend has begun, as have cases of fraud involving several businesses attempting to take advantage of lost and confused clients.
All recurring transactions will now require extra authentication under the new regulation. Customers must confirm a one-time password (OTP) each time a payment is due for payments above $5,000, and while monthly subscriptions of OTT services are significantly cheaper, automated payments still require client permissions after an alarm has been delivered.
“While the RBI move may have been aimed at ensuring more transparency, it is definitely a tedious process, and only time will tell if we can all come up with robust mechanisms for this to go through seamlessly,” said a senior executive at a streaming platform, who admitted that they had begun sending out messages to subscribers but were concerned that renewals and new additions would soon drop.
According to Divya Dixit, senior vice-president, revenue and marketing at ALTBalaji, which has partnered with platforms such as MobiKwik, Paytm, Amazon Pay, PayPal, and PayPoint India, partnering with various payment gateways and providing subscribers with multiple options and channels for payment increases the chances of subscribers joining and staying on board. “By communicating through means such as email marketing, inactive users can be rejuvenated.” “A platform should also be careful not to bombard subscribers with too many reminders or notifications,” Dixit said. Customers have been advised of the change in payment conditions by ALT as well.
