Kuku FM - Pay for Show Pricing

There are 2 types of content on Kuku FM: non-fiction and fiction. Most of it is locked behind a paywall. Users acquired for non-fiction had a decent free to paid conversion, while fiction users had a low intent to pay, nearly 1/5th of non-fiction. This meant way higher Customer Acquisition Costs for fiction. If we were to grow this business vertical sustainably, we had to improve our conversion manifold and generate more revenue.

On deep-diving and conducting many user interviews, we identified that users are still unfamiliar with our fiction library and mostly interested in listening to the show they were acquired for. Non-fiction isn’t plagued by this issue as the users recognize the popular books on our platform and therefore, are willing to pay for the entire library. We set out to validate this learning by introducing a new a la carte plan called ‘Pay for show’ – users only need to pay for the show they like, at a lower price.

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Experiment Setup
To check business viability, we designed an experiment to fare Annual + Pay for Show subscription page against the Annual Plan page. We compared the following metrics separately for fiction and non-fiction:
1. Conversion
2. Revenue
3. % Share of Pay for Show
4. % Upgrade to annual plan
We also planned to measure LTV in the long run, if the early signs turned out positive.

The new model worked really well for fiction.
1. At ₹69/show, we did 3.3x times payments compared to the control group and bagged 24% higher revenue.
2. 6% Pay for Show users upgraded to annual plan in the 1st month. Improving this number to 10% meant offsetting the loss in annual subscribers.
3. Pay for show share was 80%

NF users preferred the annual plan with access to the entire library at ₹399, instead of ₹69 for a show.
1. We did 27% more payments compared to the control group, but achieved a similar net revenue.
2. We lost 9% annual conversion. ~22% desired upgrade rate, for offsetting this loss.
3. Pay for show share was 25%

1. We scaled this new plan for the fiction catalog to all users, at a price of ₹69/show.
2. Made improvements to improve discovery for this new plan on the show page, paywall & subscription page.
3. Planned a roadmap for further improvements, like building a capability to show this plan for only specific shows, and configuring the price for each show individually.

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