MUMBAI: The ALT key on computer keyboards is quite a crucial one. As is recently launched OTT/SVOD service ALT Balaji for content producer Balaji Telefilms Ltd (BTL). CEO and broadcast veteran Sameer Nair is quite sanguine that the app is well on course to hit breakeven point as planned, but admits that its TV content business will continue to be the “cash cow.”
“Alt (Balaji) started with a plan of breaking even with a target of about four million subscribers who pay us between Rs 60-Rs90 per month by 2020,” Nair told CNBC TV18 yesterday after the company announced its financials for the period ending 31 March, 2017.
Nair pointed out that card or rack rate for Alt Balaji OTT service is Rs 90 per month, but it was launched in April 2017 with an introductory first quarter offer of Rs 25. However, the pricing for users internationally is at Rs 399.
Mumbai-headquartered and Bombay Stock Exchange-listed BTL is arguably Asia’s largest TV and film content production houses delivering Hindi and Indian language content across a variety of platforms. It is promoted by Hindi film actor Jeetendra Kapoor and his family comprising his wife Shobha Kapoor, daughter Ekta Kapoor and son Tusshar Kapoor.
Nair is quite happy with the traction that ALT Balaji had got in the first five weeks since launch with downloads going past the three million mark from over 75 countries.
“The reason we got subscribers so early in the game is because our strategy is different from the rest of the players where they (subscribers) have one month free (service), but we give five episodes free,” the seasoned media executive explained on the business news channel.
Nair pointed out that that the company aimed at having two million paid ALT Balaji subscribers by end March 2018, with revenues at Rs 700 million (Rs 70 crore).
“Alt is investing Rs. Rs100-Rs125 crore (Rs.1,000 million-Rs. 1,250 million) a year and we have also got a lot of interest from strategic investors to come and partner with us,” he added.
The company in its investor presentation said that the net realization per hour for its TV programmes increased 17 percent to Rs 2.89 million in FY-17 as compared to Rs 2.47 million in the previous fiscal.
Nair is confident about the the group’s television content business and expected it to remain a robust revenue stream. He pointed out that the business would grow in the range of 20-30 percent year-on-year helping the company to better its margins and added, “ARPUs are growing, which is a good thing for us. The TV business is going to remain a cash cow in the Balaji stable.”
Nair disclosed that BTL had gone easy on film releases in FY 2017, but has begun pretty well in Q1FY18 with its offering `Half Girlfriend’, based on banker-turned-author Chetan Bhagat’s book of the same name, attracting viewers to the box office. “We had originally planned the film in a manner where we did a lot of re-sales on satellite, digital and theatrical rights. The film will make good money for distribution (people) and as well as for the company,” he explained.
However, BTL is reviewing its exposure to movie production business, at the same time, as resources allocated to the business vertical may not be yielding the desired results.
“We are taking a long hard look at it (the movie business) and, at the board meeting we decided …capital allocation will be towards television and Alt Balaji. The only reason why on a consolidated basis for a full year we are negative is because of the movie leak.”
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