PAY BACK PERIOD

Shreyash Ankolaer (3P)

From: Customize Resume <customizeresume@gmail.com>
Sent: Monday, January 10, 2011 11:13 AM
To: vishal.chandankar@relianceada.com; khalid.sayed@relianceada.com
Cc: rohan_daxi@yahoo.com
Subject: Pay-back Period

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Dear Vishal / Khalid,

Pay-back Period

For most capital investments, a pay-back period of one year is considered “Excellent”.

Generally speaking, corporate finance managers will approve any project with a pay-back period of two years.

During our meeting, you mentioned that it would require a capital investment of approx. Rs. 50/- lakhs (bandwidth cost) to launch a TV Channel.

If Job Alert Channel manages to recoup Rs. 5/- lakhs per month, it would mean a pay-back period of just 10 months!

This means getting a total of 10,000 subscribers @ Rs. 50/- per month (spread over next 3 months i.e. ~100/day).

I believe BigTV has a current subscriber-base of 3 million. So this certainly looks like an achievable figure – a mere 0.3%!

I would not be surprised if BigTV is aiming to add 10,000 new subscribers everyday during 2011.

Of course, you are the best judges, with your vast experience of DTH platform’s paid channels.

These projections must be viewed in the perspective of Naukri’s claim of registering 10,000 new jobseekers everyday! (similar claims by Monster and TimesJobs – which is understandable knowing that every jobseeker does register on all the 3 jobsites.)

With Indian Universities churning out 3,500,000 fresh graduates every year (12,000/day), this sounds believable.

If their parents have invested a few lakhs of rupees on their 4-year education, would they grudge Rs. 50/- per month?

Maybe they are already spending Rs. 100/- per month on their mobile phone bill!

Can we convince just 1% (120) of those 12,000?