All management professionals talk about the famous 80:20 principle or the Pareto Law, where the focus is on serving the 20% of customers who give 80% of the business. The usual assumption? Leave the remaining 80% of the customers alone or serve them at a minimal level.
But what if the story could be flipped? What if we could fit square pegs into round holes by thinking differently? Years ago, Dr. Kota my ex-colleague, dear friend, my research scholar, and now B-School professor gifted me a brilliant book – The Long Tail: Why the Future of Business Is Selling Less of More written Chris Anderson.
Dr. Kota, like me, loves to read, and this book was a true eye-opener. It challenges our default way of thinking. Chris persuasively argues that even though the market is cluttered with 80% customers the market size is still 20%. And the beauty is that not many competitors in that market and there is less focus too. companies can operate in stealth or under the radar mode. Amazon and Netflix are perfect examples, they thrive by serving niche markets with vast selections, catering to diverse tastes that the mainstream ignores.
The Indian Cinema Parallel: Take Indian cinema. Almost 99% of movies won’t cross ₹10 crores in theatrical business. Yet, 1,500 to 2,000 films are made every year. Can the script be flipped? Aamir Khan seems to think so. His film Sitaare Zameen Par reportedly did a solid ₹293 crores at the box office. But here’s the twist – Aamir refused to sell the OTT rights to the big streaming platforms.
Why? Because while Indian cinema is widely watched, only 2–3% of India’s 1.4 billion people go to theatres. In comparison, a staggering 491 million people in India are actively engaging with YouTube content. That means theatrical releases are the long tail of the real market!
Beating the OTT Game: OTT platforms usually operate in two ways – they either buy the film outright or stream it on a pay-per-view basis. But the real viewership numbers are murky. They only publicize their “top 10” lists, and their algorithms are laughable.
Netflix, for instance, counts a two-minute watch as having “watched” a movie. By that logic, I “watched” at least 730 movies last year (two movies per day)! And if a film underperforms, the data vanishes into a digital Fort Knox. Aamir Khan was done with these games. He announced he wouldn’t stream his movie on any OTT platform. Instead, he went direct-to-audience: pay-per-view on YouTube at ₹100 for multiple views within 48 hours.
Let us do some back of the envelope calculations. Even if five people watched together, that’s just ₹20 a head cheaper than a half-litre water bottle in a multiplex.
The Math That Changes Everything
Let’s assume only 1% of the 491 million Indian YouTube audience watched the film, 49.1 lakh views × Rs 100 = Rs 49 crores.
If 5% watched that would be Rs 245 crores , almost the same as the theatrical gross, but with far higher margins.
Aamir pushed the envelope further, from 15th to 17th August, he is offering the film at Rs 50. If 10% of that YouTube audience watches at this price (4.91 crores people), that’s another Rs 245 crores. Add the two figures and you’re looking at ₹500 crores, double the theatrical revenue and likely with almost 100% margins.
The Takeaway: Don’t just be a follower. Be an innovator. Be a disruptor. Chart your own path and become the role model others follow. Aamir Khan’s move is not just about selling a movie differently – it’s a masterclass in turning the long tail into the main act.
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Excellent analysis.
ReplyDeleteThank you.
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