ALTBalaji eyes more direct subscribers

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MUMBAI: Balaji Telefilms-owned over the top (OTT) platform ALTBalaji sees good potential in garnering direct subscriptions from customers. In Q3, ALTBalaji had seen a 26% increase in the direct subscription revenue.

The company is upping its investments in garnering more direct customers. The B2B segment comprising of telco deals continues to be a growth driver.

“It is not a full shift in strategy, but over the last six months the confidence that the direct consumer base is consuming us is willing to pay Rs. 300 a month has enabled us to start focusing our investments and marketing spends to attract that a little more,” Balaji Telefilms’ management said during the Q3 earnings call transcript.

The management was asked whether the company is planning a major shift to B2C model.

The company also noted that the difference in average revenue per users (ARPUs) between B2B and B2C is about 30% to 40% at this stage.

“There are two kinds of additions that happen. One is of course people who come to see the new show, but a lot of subscribers also get added when we try and go to past subscribers, who have dropped, who have churned out to whom we get also. There is addition of two types of subscribers entirely fresh and people who have churned out of our app we will get them back again.”

The company is also actively toying with two parameters in terms of improving the mix of direct subscribers versus our B2B subscribers. ALTBalaji’s committed content pipeline is close to 60 shows which is expected to go live on the app over the next 18 months.

“We are now at a process where we are confident that we will do about 24 to 30 shows in a year plus three categories of shows, so that is either male focus shows or female focus dramas. We are reinforcing that content strategy and our focus on international, which will be even more as we go ahead as our library builds up,” the management added.

ALTBalaji’s retention ratio is anywhere between 50% and 60% while 70% of B2C subscribers have taken quarterly subscriptions. As of February, ALTBalaji had 13.1 million paid subscriptions and 4.6 million monthly active users (MAUs).

Telecom operators putting their OTT platforms behind the paywall is also a good sign for the company’s B2B revenue.

Bharti Airtel, the company said, has already put its OTT platform behind the paywall. “Effectively, what we are seeing is that, that also becomes the case when we will have to go for higher ARPUs in our next contract renewal, so that is really one of the significant pointers that crunches the market for B2B.”

ALTBalaji had posted a revenue of Rs 28.1 crore for 9M FY19. The platform’s revenue for Q3 FY19 was Rs 8 crore. The revenue stood at Rs 14.3 crore in Q2 and Rs 5.8 crore in Q1.

“Yes, at the end of the year we will be probably slightly shorter or just about there,” the company’s management said in response to a question from an analyst whether it can touch Rs 60 crore revenue in FY19.

The company’s further stated that the ALTBalaji’s revenue from international markets has not been as per expectation as its business strategy has not worked the way the company had anticipated.

“We had expected some to come from international, which has not come, if you recollect a couple of calls although we said that we have had some strategy, but that strategy is not probably playing out the way we thought but let us wait for March 31, 2019 and then we will know how this also goes,” the company said.

Balaji has so far invested Rs 350 crore on ALTBalaji and has another Rs 100 crore of cash residing on the balance sheet of ALTBalaji.

Balaji Telefilms CFO Sanjay Dwivedi said that the capital employed in the movie business has been close to Rs. 100 crore. The company’s movie slate for FY20 comprises of four movies. It has secured the cost of production for these movies by way of pre-sales.


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