Affine Analytics Interview Question | How does TVF makes money ?
Question
TVF recently went to app/website only mode. How do you think it makes money to survive and pay the actors ?
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Answers ( 9 )
Any approach particular to be followed for these type of questions.
Give it a try, think of obvious answers like Ads, membership, building a brand.
Think on the line of Netflix 🙂
Could you plz drop an approach/answer to solve.
TVF was started in 2010 with an aim to entertain people by making videos revolving around daily life experiences of the normal people in a sarcastic way.
Talking about the business model of TVF, they make money from YouTube by making videos and by displaying ads during the entire video. Today TVF is having an approx. 2.5-3 Cr views/Month which actually contributes into 15-20 lac rupees. Now as per the videos published by TVF , the cost of making a video would also be some what high. We can see every video from TVF is sponsored by a big name or a start-ups for e.g. Permanent Roommates season 1 was sponsored by commonfloor, then season 2 was sponsored by OLA cabs, The famous show TVF pitchers was sponsored by Kingfisher. These companies pay money to TVF because they know their product will be reaching out to millions of people
Secondly , the people involved in TVF are also great stand-up comedians they make money by doing stand-up comedy shows for corporate organization and by doing shows at Institutions , they are actually paid a good amount of money for doing a stand-up comedy at various places.
By introducing the mobile app of TVF , they are trying to attract people on their own platform. Let suppose we consider money made from YouTube , some portion of the money is taken by YouTube as a share. By having an app of TVF they will convert that share into profit for TVF. Then after when they are sure that some people are regularly engaging in their mobile app they will start charging the user to view the content just like other platform.
The basic 3 source of incomes i can think of are-
(1) Earning from the subscriptions- for example lets suppose they have 1 lac paid subscribers in a particular year at a cost of Rs 200 so this revenue comes to 2 crore and let suppose it charges Rs 300 to each new subscriber adding in a year and lets suppose this no. to be 20,000 so it gives a sum of 60 lakh.
(2) It asks for 10-15% of the share of funding the film/series receives from its producers and funders, for providing a grand platform to release their work.
(3) In App/Website Ads from different companies.
TVF initially used to have content on YouTube. This enabled them to build a brand and attract viewers. They earned money via YouTube Ad Sense by putting advertisements in between videos. Secondly, they earned money using product placements. Tripling had Tiago, Pitchers had Kingfisher and so on and so forth. Product placements definitely are more lucrative for both TVF and the companies because of superior ROIs. Partnering with United Spirits (Kingfisher), Unilever (Ponds Face Wash) and transport giant Uber has given them the necessary push and momentum to increase the cap on their production costs.
And now that they have created successful and quality content more than once, they have the attention of the big investors.
They are planning to move to the app/website only mode and I think they will introduce the subscription method. For this, there should be a significant mass of people who are willing to pay. They will have to get more content (originals) which can be made premium. And to create anticipation, they can release the first few episodes on YouTube or make them free on their platform and once the users are hooked, they will pay to watch it further. Of course, they may not be able to charge as high a rate as Netflix or convert everybody, but this way they will earn a lot more.
Once they introduce subscriptions, they can introduce different plans based on mobile or desktop access.
In the meantime, to finance their new content, they can try raising funds. Recently, they have been given funding by Tiger Global which doubled their valuation to $80 mn.
TVF initially make money from YouTube . YouTube shows ads during the video. secondly tvf charges money from makers of video . TVF make a big fan base after so many hard word , and on the basis of fan base TVF launched it’s own TVF mobile app with all its content and few selected movies. The selected movies can watched by subscribing .TVF will make money by subscription charges. Later in future, TVF can make money by making paid Premium content . The content will be accessed only by those who have paid subscription.
Initially tvf used youtube as a platform for releasing their videos which was their source of income as thousands and millions of people watched their videos. I addition to that they earned money by advertising various products in their videos and also some of their videos and web series had sponsorship from various weel established companies.
Now on the mobile app, they can make money by providing some videos or the first 2-3 episodes of a web series for free and charging for the rest. It would work just like Netflix.
To answer such a question, let us first look at the different revenue streams and then we will explore different headers under them-
1. YouTube
Ads – Displayed during the video being played. Since YT is accessible to one and all, viewership is also high and people tend to watch such videos again and again after some time, adding to the total views. That translates to money – ads and viewership.
2. Sponsorships
Relevant brand partnerships, with sponsored placement and integration within the series, help TVF rake in ample money.
3. Subscriptions
For viewing exclusive content or latest releases, TVF can charge members a fee (maybe after some months of a free trial). There are provisions of in-app or on-website ads as well, which can add to the revenue. A benefit for a member to enrol for premium subscription would be to get rid of these ads.