05/09/2016 12:35 PM IST | Updated 05/09/2016 2:14 PM IST

Reliance Jio Is Betting Big On The Content Game

Plenty of data, ahoy!

Adrian Pope

Couple of days ago, I saw a hilarious video on Reddit and sent the link to my friend. "Not now, I am not connected to WiFi," he replied.

There was nothing unusual in his response. In India, consumers often avoid watching videos or streaming music when they are not connected to WiFi. Until recently, one reason behind this was the below average 3G speeds, and the other reason was the fear of too much data being used up in the process of watching a video or streaming music.

So naturally, Mukesh Ambani's announcement last week that all Jio customers will get unlimited data until the end of 2016 is big news. Amabani also announced that Jio data packs after that date will effectively be priced at a reasonable ₹50/GB.

Denis Balibouse / Reuters
Mukesh D. Ambani

In the beginning of 2016, Reliance's Jio allowed its employees and their friends to buy a LYF phone, which offered unlimited LTE data during the trial period. Later, the company dropped the invite system.

By mid-August, Reliance had major handset manufacturers on board and consumers with a Jio SIM still had access to unlimited data. Most users began using their phones as a WiFi hotspot without any FUP. They downloaded movies or games, watched live sports on the go, streamed music, and updated their apps.

A lot of content was already available on the Internet for the users to consume but, before Jio arrived on the scene, 1 GB of 4G data cost ₹250 on average. A report by MediaNama published in July suggested that, on average, Jio customers were consuming a whopping 26 GB per month. Which is much higher compared to the 758 MB average monthly 3G usage by Indian smartphone users, as reported by the Business Standard.

Jio is turning consuming multiple GBs of data per month into a habit for its customers. If a user has a 4 GB data pack per month plan and she or he use it all up 5 days before the month ends, they probably wouldn't mind spending ₹50 to get another 1 GB of data.

As of last week, PhoneRadar has reported, Jio already has more than 6 million subscribers. And therein lies an opportunity for content apps such as YouTube, HotStar, Netflix, Apple Music, Saavn, and Hungama.

With access to free data until the end of this year, Jio subscribers will not hesitate to switch to a higher-quality stream even when they are not connected to WiFi. Streaming a live cricket match on the go will no longer be a rare sight. Even if only some Jio subscribers end up buying that extra data pack, it would still be a huge win for Reliance.

Tom Merton
Father and son using cell phone together

Subscribers with the other networks are benefitting too. Telecom carriers have slashed the rates of 4G packs and further reduction is expected. Airtel is offering ₹51/GB to their consumers after an initial payment of ₹1468.

Reliance, as a media house, is betting big on Jio too. Currently, it is offering free premium content to all its subscribers until the end of 2017. That includes Jio Play for live TV channels, Jio Music for free music streaming and Jio Cinema for movies. After the free preview period ends, Reliance hopes that many subscribers will pay for continued premium access.

By the end of 2017, when the preview offer ends, Reliance will have a large number of customers. Even if some of them end up not using the premium service at all or use less than average amounts of data, overall consumption of content is bound to remain high. Which just goes to prove the old adage, "Content is king."