At a time when Netflix has launched a cheaper mobile-only plan and Apple has priced its over-the-top (OTT) service at Rs 99 per month to entice Indian viewers, AltBalaji has moved its content behind a paywall. The content includes original shows and films from the house of Balaji Telefilms.
AltBalaji, which claims to be the cheapest in the market, offers a three-month subscription at Rs 100 while the annual subscription costs Rs 300. Rival Hotstar's monthly subscription costs Rs 299 -including cricket - while the annual fee is Rs 999. Netflix, which has international content along with an India library comprising programmes in over 10 regional languages, offers an entry price point of Rs 499. The mobile plan costs Rs 199 per month.
While AltBalaji follows a SVOD (subscriber video-on-demand) model, it offered free content to viewers by way of partnership with telecom service providers - Vodafone, Airtel and Jio. The OTT firm has withdrawn content from telco platforms starting October 2019, said Nachiket Pantvaidya, CEO at Alt Digital Media Entertainment. In July 2019, the firm signed a three-year deal with Zee5 to co-create over 60 original series available only to subscribers of the platforms. "The Zee5 deal will help us break-even. It will help us get a larger sum of money than the telco partnerships," Pantvaidya said.
Although Pantvaidya did not explain the economics of the deal, the management said about 42 shows (made before September 1) exclusive only to AltBalaji will be monetised by them, allowing them to "achieve break-even" while the partnership with Zee will allow it to conserve cash burn by way of co-production. "We want to ensure we move to a pay ecosystem and people pay for content," Pantvaidya told FE in an interview.
Content in India is becoming expensive with over 30 players competing in a market estimated to touch about 550 million video viewers by FY2023, according to a recent KPMG-Eros Now report. Netflix will spend a hefty Rs 3,000 crore on India content in the two years starting 2019, CEO Reed Hastings said late last year.
AltBalaji's total cost amounts to anywhere between Rs 160 crore and Rs 170 crore, of which content accounts for close to Rs 110 crore. In the last financial year, the firm's per customer acquisition cost averaged around Rs 140-150. The firm has an active subscriber base of close to a million, it said in a Q2FY20 earnings call. The number, however, has dipped from the 5.1 million active subscribers it claimed to have as of August 2019.
AltBalaji will achieve break-even in the January-March or April-June quarter of calendar year 2020, Pantvaidya said. "What we do not want to do in the next calendar year is to acquire (customers)," he added. The company's total losses increased to Rs 114.92 crore in FY19 from Rs 95.22 crore in FY18, according to the company's RoC filings sourced from business signals platform Tofler. Revenues for the six months ended September 2019 stood at Rs 32.4 crore, higher than the Rs 20.1 crore it notched during the same period previous year.
The firm that targets the underserved male audience and female viewers (aged 20-40 years) will focus on producing long-format shows this year. While most of television prime time is dominated by family soaps, there is a lack of individualistic content - AltBalaji aims to tap into that unmet demand. "Indian TV series have been long-term and we want our viewers to see more and more episodes of the shows they like," Pantvaidya said.