MUMBAI: Balaji Telefilms' digital venture ALTBalaji showed 6x revenue growth in its second year of operations. While the over the top platform was predominantly focusing on the domestic scene in the first two years, it is set to give its international business a major push in the next two years.
“The second part of our quest is of course that we will be starting to add international consumers and they are slightly expensive to acquire compared to Indian consumers. So international which was not a major play in years one and two will start becoming of some size and relevance in year three, which will kind of then grow in year four,” the management said in an earnings call after the Q4 results of FY19.
The over-the-top platform has been able to capture the mass audience of the country on the back of shows like Gandii Baat, Apaharan, Ragini MMS and Keheneko Humsafar Hain.
In the last financial year, ALTBalaji booked Rs 25 crore in revenue from indirect users and Rs 15 crore from direct subscriptions. The company is now looking to expand its direct subscriber base that will help in accomplishing better overall revenue next year as direct subscribers account for a greater ARPU. The management also added that consumers are now showing more confidence in opting for an annual subscription of Rs 300. They also argued that along with growth in the library, a boost in marketing efforts to acquire customers would also help in luring direct consumers.
The target revenue for FY20 is Rs 80 crore. The management also stated that the customer acquisition cost is now trading between Rs 120 to Rs 180, but it could go up to Rs 220 when it targets five million subscriber acquisitions.
“The second thing is that the competition is now dropping prices. You would have heard that Netflix is also dropping its price for a mobile-only version; I have read that in the press. Hotstar has come to Rs 365 a year, so, therefore, that kind of exponential growth, 6x growth, might not happen year-on-year. Which is why we are saying that with the competitive choice dropping prices closer to our levels, we are not going to be able to double every year,” they noted.
The streaming platform will continue to spend an average of Rs 35-40 lakh per episode for making regular shows. However, it intends to produce four expensive shows of 40 episodes that could cost anywhere between Rs 80 lakh to Rs 1.1 crore per episode. However, the management also asserted that low-cost shows have garnered a really high customer base.
“There is a new psychographic that is emerging both males as well as females and we want to gear up our library to last this spread of internet. We do not want to make something that is going to be irrelevant three months down the line. So we are closely examining how to do that and how to get that point and you will see a larger proportion of thriller,” they said further elaborating on ALTBalaji's content strategy.
The management also explained that the company's content strategy relies on Hindi exclusive originals which are based on personalised needs. Another statistic they found is that men consume more online content as traditional TV lacks good content for them. The platform will beef up Hindi original exclusives over time and add other forms of content as per requirement.
At a time when all the OTT platforms are fine-tuning their strategy to acquire more customers, the service providers may be subject to regulations by the Telecom Regulatory Authority of India (TRAI). Balaji Telefilms’ management said most of the OTT platforms have already signed up for the self-regulation code, which they believe should be the way forward. However, the OTT platform said it would adhere to all the rules prescribed by the regulator.
