MUMBAI: Ekta Kapoor’s over-the-top platform has managed to solve the OTT revenue question. The ALTBalaji management always spoke of profitability and breaking even rather than cash-burn and tons of investment and it seems that aspiration will soon be achieved.
The management at Balaji Telefilms remains relentlessly upbeat about lowering the recorded loss in the balance sheet gradually. In the third quarter, it stood at about Rs 16 crore. As shared with investors in an earnings call, the management is optimistic to bring it down to single digit in the fourth quarter. “April-June onwards we will practically breakeven the ALT business,” the company says. It also mentions that the breakeven is at the P&L level.
Before September 2019, ALTBalaji shows were available for free on telco services. The indirect customers were yielding very low average revenue per user (ARPU) bordering between Rs10 to 15. The platform last year entered in a deal with ZEE5 also. All 42 shows which were produced before September are exclusive to ALTBalaji and the 13 co-produced shows on both platforms. Due to the changes, now all ALTBalaji content is behind a paywall, be it on its own service or on ZEE5.
“This has enabled us to one raise our ARPU. Secondly we have direct subscriptions going up, as a result year-on-year. We are doubling our subscription revenue overall and also through direct subscribers, so that is the benefit of going behind paywall. We feel that as our library increases we need to ensure that people form the habit of paying for our content and our content is not offered free. We had to do telco deals and give it off free in the first, probably 30 months of our existence because our library was small, but now we have taken a call, now with the library is growing that we are going to go only behind paywall,” the management reaffirms.
The revenue has gone up this quarter too which stood at Rs 23.1 crore in Q3. The management thinks numbers are looking more and more cheerful in terms of the topline. It attributes it to two factors – one, the exclusive 42 shows and the ZEE deal. Because of the deal, it has been able to manage P&L and revenues.
“It is a 60-40 content share, 60 per cent of our content cost is picked up by ZEE and I think on an annual basis that will amount to at least about Rs 80 crore to 90 crore and the rest of the money that we spend on the apps has to be made by us directly through our exclusive live and show that exploit and as a result of that we hope to breakeven between 36 to 48 months from our launch,” the management states.
The management is very confident that its direct subscription revenues are doubling every year. At the closing of this financial year, it estimates the figure to stand well above Rs 31 crore to 32 crore . It is also expecting to double direct subscription revenues next year as well. Moreover, the two-year ZEE partnership will also span most of the next financial year leaking into the year after.
“We want to be the only OTT platform in the country that has broken even that too with a considerable base of originally-produced shows. We are now the number one store house of originally produced Hindi content in country and we will also demonstrate that we are able to market our shows exclusively better than everybody else because our efficiencies are better. We are achieving this at a much lower marketing spend than the competition,” the management says.
“That is reflected in the fact that we are consistently in the top four gross billing OTT apps on the Android and the iOS web store pick any month in the last 12 months we will always be in the top four, though our rate to the consumer is probably one of the lowest it is Rs 100 for three months and Rs 300 for a year."
"What we are therefore setting to establish is that there is a mass market, which we are successfully able to target and operate a profitable OTT business with the topline of about Rs 150 crore to Rs 200 crore in the coming two financials,” it adds.
