Zomato, you have bitten off more than you can chew with video streaming
Four reasons why Zomato Originals could hurt the company's IPO plans in the future
Zomato, Zomato. HSBC earlier this year valued you at $3.6 billion; recently your founder proudly quoted a whopping Rs 200 crore+ monthly revenue for your delivery partners. As you confidently enter the content industry this week, you should know that category is like the G7 of the Internet right now, and with all due respect, you’re New Zealand at best. Here are four reasons why it will hurt your IPO plans in the future:
While Netflix India starts at Rs 499 per month, the recently launched Apple TV comes for a meagre Rs 99 per month. Zomato, with just food as a centerpoint, can only hardsell the subscription so much. For Zomato Gold, they were the Netflix of content streaming, a comfortable first-mover advantage in home category; this is a completely tricky, new terrain to survive.
Zomato, you are missing the basic insight of a customer journey. Your audience has compartmentalised lifestyle. The monthly 70 million active users Zomato boasts of, open the application for a quick order in or unlock a Zomato Gold deal inside a restaurant. For original content, they would probably rather binge Hell’s Kitchen at Hotstar on their smart TVs, while eating that delicious burger delivered to them.
Facebook understands customer insights best; Facebook is the yellow pages of friends, Instagram the trendier hangout joint and WhatsApp for those long conversations. Zomato needs that kind of clarity. Even its competitor, Uber, markets Uber Eats and Uber cab services with separately. The venn diagram intersects but doesn’t eclipse.
Zomato has jumped too late in a category, with what seems like half-cooked intentions. Zomato Originals as part of their social media content plan would have worked effortlessly, but marketing it as a standalone app feature where brands pay for eyeballs is far fetched. What this new feature will do is inflate the distance between cost and revenue even further, hurting their stock prices if and when they finally launch their IPO. Alibaba and Sequoia Capital should fund Netflix, Amazon Prime or Hotstar in India if they want a bite of the irresistible OTT. For just like social media and ecommerce, eventual duopoly over here too is inevitable.