With 3.3 million users, Balaji OTT platform focuses on original Hindi drama to break even

Ekta Kapoor-owned Balaji Telefilm’s OTT (Over-the-top) platform ALTBalaji has added 2.1 million users in Q1 FY19. According to a report by Television Post, as on 30 June, 2018, ALTBalaji’s user base stood at 3.3 million. It had added 1.2 million in entire FY18.
The report also showed how the platform’s revenue grew from Rs 3.7 crore in Q4 FY18 to Rs 5.8 crore in merely one quarter (Q1 FY19), while the net loss for Q1 this year was a humongous Rs 26.4 crore.
Sunil Lulla group CEO of Balaji Telefilms, in an interview with ET, mentioned how the overall losses (Rs 1.2 crore for Q1 FY19) were on par with the company’s plans. In June Balaji had released three prime-time shows, and Lulla claims that they are the first company to do that across television and OTT platforms.
He further adds that ALT is an investment avenue as of now and will not turn profitable for upcoming three-four years, but should break even after that.
ALTBalaji is a paid OTT platform that focuses on original exclusives in Hindi drama and other languages such as Tamil, Telugu, and soon Arabic as well. While the dubbed content will take months to reach the public, right now the main focus is on Hindi, according to Lulla.
Classic Ekta Kapoor style, the content on the show caters largely towards female viewership while there are a few shows for cricket fans as well. There are separate categories for Kids shows and Comedy originals on the video streaming platform.
While Lulla believes that ALTBalaji will be number one in the Television space, the changing tastes of the Indian population and the larger picture of OTT presents a different story.
An ant climbing up OTT walls
In January 2018, ALTBalaji had partnered with Reliance Jio to offer its OTT services on Jio’s digital platforms. The collaboration was expected to help ALTBalaji to leverage the over 160 million user base of the network with its cheap data packs and low-cost smartphones.
The content generated by ALTBalaji targets households, and the availability of content in different languages contribute to its regional viewership. The subscription rates of ALTBalaji lie between Rs 100 to Rs 300, former being monthly charge and latter being annual fee. They also provide offers on the fees like Mobikwik cashback etc.
While these steps taken by ALTBalaji should bring a large population residing in Indian households like women and children, from different regions to its platform, the number of subscribers at the end of Q1 FY19 were 3.3 million.
The crux lies in the fact that the video streaming, content consumption and binge-watching culture is followed largely by the youth in tier 1 and tier 2 cities plus the aware upper middle-class households in other cities. These demographics represent a requirement for variety and quality in their content and the genre of trending content is significantly changing in the environment, especially since it came out to create an alternative for television.
While nothing can be said about the quality, the variety of content on ALTBalaji is significantly less as compared to Hotstar, Amazon Prime and Netflix. The genre by Balaji Telefilm’s OTT still largely follows the Television prototype, which becomes a hurdle in its growth.
Compared to ALTBalaji, in Indian OTT ecosystem, Hotstar has a user base of over 5 million, Amazon Prime of over 13-14 million and Netflix has 0.7 million plus paid subscribers. While the figure of Netflix can be attributed to its content that has few shows for regional population and the high cost of subscription, ALTBalaji lies far behind the Hotstar and Amazon Prime, that offer the subscription to the consumer at more than thrice the ALT’s price. The credit again goes to the genre and variety of content provided as well as the population targeted.
On a global scale, Netflix has more than 130 million subscribers and Amazon Prime has over 100 million paid users. Meanwhile, China is a country that has invested heavily in OTT platforms. It has applications like iQiyi, Youku and Tencent Video backed by tech giants like Baidu, Alibaba and Tencent (resp.) which engage a large population of the country and make heavy revenues. They also use technology to create a better platform with respect to User Interface.
The challenges faced by ALT relate to the content creation and converting its target audience into paid subscribers, meanwhile keeping up with the giants in its competition.
Keeping in mind all the discrepancies in ALTBalaji’s model, and the competition it faces against OTT platforms like Netflix, Amazon Prime’ and Hotstar, it would be interesting to see how ALT tackles the challenges posed by content and turn profitable in three to four years, and climbs the wall of OTT.

Source: Entrackr