Do the Math

Let's do the math on PSR.

The original thought was to give away five P1 million prizes weekly, all funded from text entries. On top of this, we would need to add the marketing expenses of PSR, which we can estimate at anywhere between P5-10 million per month. This means that every month, at least 30 million text entries would need to be received, assuming that the PSR program received P1 out of every P1.50 charged to the texter. This means roughly 1 million texts a day to break even.

(I can't confirm this, of course, since this calculation assumes rev share is 2:1 in favor of PSR vs. the current 70:30 rev share that telcos receive for VAS services. Let's just say that this is a theoretical exercise to try and calculate how many texts need to be received to make the program self-sustaining.)

At any rate, when I arrived in PhilWeb on June 13, with text entries averaging 20,000 to 30,000 a day, it was clear to me that PSR was something that I needed to be very focused on immediately.

The first step was to lower the hurdle. We moved from a weekly draw to a monthly draw, thus saving P15 million in prizes to be given out. At these new levels, PSR profitability suddenly became attainable.