Free view hurts ed-tech firms

Chennai: While ed-tech industry is adding new users every quarter, more than 80 per cent of them choose to not to pay for the services and the players are still finding it difficult to monetize the user base.

Ed-tech companies like Byju's, Vedantu, Extramarks, Vedantu and Meritnation have been adding new users every quarter. As per the data of RedSeer Consulting, an average 7 lakh new users are added every quarter. The numbers have gone in the past few quarters - 5.5 lakh in June quarter, 6.8 lakh in September quarter and 8.8 lakh in December quarter.

However, the apps are not able to monetize these users properly. "Indian consumers - both parents and students -are warming up to the concept of online tuitions with high rate of repeat usage. Consumers prefer online platforms due to better quality content vs available offline options, time flexibility and innovative/interactive learning tools," said Mrigank Gutgutia, Head, Consumer Internet, RedSeer.

However, an estimated 80 per cent of new users added to the pool every quarter continue to be free users who prefer unpaid/trial packages or using free applications like Youtube. Only 20 per cent of the users added every quarter use paid services.

Availability of free content on the platforms makes it difficult for the players to monetize their content and price it properly.

"Free users tend to use online content along with offline tuitions. The share of unpaid users has remained constant over the quarters. The apps will have to find out ways to monetize the user base. The apps which are heavy on content, there is no additional cost and for them profit margins are as high as 50 to 60 per cent. For those who are into live streaming classes and providing tutor services, profitability will be an issue,' he said.