Should Raagify go Lite?

A product strategy question from a product manager interview, set at Raagify, a fictional music streaming company.

The question

Skills this case tests

A starting structure

Revenue per 1,000 MAU = free users × ad ARPU + Lite payers × Lite ARPU + Premium payers × Premium ARPU

How to approach this case

Clarify the goal first: total revenue, payer count, or both, and whether Premium must stay healthy. Ask how revenue splits between ads and subscriptions today. Then think about who would buy a middle plan. Some free users want to pay a little. Some Premium users would happily pay less. A Lite plan only works if it wins the first group without pulling down the second, so design it with clear limits, not just a lower price. Decide which features stay Premium only and explain why. Do the maths per 1,000 users: new Lite revenue, minus Premium revenue lost to downgrades, minus ad revenue lost when a free listener stops hearing ads. Think about how Indian users like to pay for small plans. A strong close picks a price and a feature set, sets guardrails on downgrades and churn, and keeps a long-term holdout.

The full method for strategy, pricing and growth questions

After the mock interview you get scores on five skills, what to fix with quotes from your answers, and the ideal path for this case.