We are going to add around 25,000 to 30,000 paid subscribers per day, said Nachiket Pantvaidya, Group Chief Operating Officer, Balaji Telefilms.
Watch video: ALTBalaji will breakeven in 2020, says Balaji Telefilms
Talking on Jio-fication of the industry, Pantvaidya said the internet has spread into areas, where populations of 1,00,000 - 1,50,000 towns are also watching video on internet, and therefore our content has been modified to talk to those audiences and that is seeing great gains especially with dramas.
Edited Excerpts: Everyone is talking about how ALT Balaji is expected to do much better than what is has done already. You have gone live on two more platforms Rel Jio as well as Airtel. But now, you are still sitting with losses of almost Rs 100 crore for the full year FY18. Going into 2019 and 2020, what kind of progress do you think you could make with ALT Balaji?
One of the big pieces of news that we have is that, we are almost doubling and tripling our run rate of acquiring subscribers on this platform. We are looking to breakeven with 8 million subscribers somewhere at the end of 36 months of our operation. That is about two years from now.
How many subscribers do you have now?
We have an upwards of 2.5 million, even as we speak. Here in lies the story. Till March 31, we were at 1.2 million subscribers. In the last 40 days, we have doubled it. So, we are going at a clip of around 25,000 to 30,000 paid subscribers per day, that we are adding on.
What led to doubling of subscribers?
Basically, there are three factors that led to the doubling. One is of course, there is great internet momentum in the space, which is an environmental factor. Second is, we were on to telecom partners in a big way only in the last quarter. On January 26, we went live on Jio. On March 1, went live on Airtel and that really accelerated our growth. The third thing is, I think we have now reconciled our programming strategy to make more mass content.
Before we launched the content that we have made, we just aimed at this urban mass tier I city kind of phenomenon. But now, post the Jio-fication of the industry, internet has spread into areas, where populations of 1,00,000 - 1,50,000 towns are also watching video on internet, and therefore our content has been modified to talk to those audiences and that is seeing great gains especially with dramas.
What is the average revenue per user (ARPU) as of now?
We are at around Rs 15 per user as of now. We have to also launch our international service post June 15, which is primarily dubbing our content Bahasa in Malaysia Bahasa, in Sinhala, that will kind of increase our ARPU towards 20-25.
Net-net our path to growth really starts this year. I can say, one thing that for three to four months, we were reassessing our strategy after launch because our target markets changed.
We wanted to become more mass, so now we are on with full steam. Like I said, before we acquired 1.2 million consumers in the first 12 months, but in the next 40 days, we acquired another 1.2 million. This is not including the consumers that we have on Jio, which for some reason, reasons of confidential I can’t fully reveal to you. So, it is a number that is more than 2.5 million today and growing at a steady clip of 30,000 consumers per day.
I am guessing you will still be loss making in FY19, I mean it is still a cash burn business?
How much do you think your losses could reduce to in FY19 and FY20?
I feel it will be in the level of Rs 80 crore and of course that depends on our programming strategy, how much we invest and how much we don’t invest. How the international ARPU goes up and in year three, we are inching towards breakeven. I think in the second half of the year, we will see months where we will breakeven.
For example, the loss levels month wise right now are say, somewhere between Rs 8-9 crore. In the last two months, we have started seeing a Rs 7 crore number. By the second half of this year, we will have a monthly loss of Rs 4 crore, so we are tracking it month by month to ensure that we go towards breakeven in 36 months.
Year three is FY20, right?
Yes, three years from launch.
You said Malaysian Bahasa, but is not the Indian diaspora more in the US, Canada, UK? Is there any offering there which can actually pull ARPUs?
We have offerings in both the US and the UK markets that are already out there. But marketing to those consumers is not very cost efficient. Because, when you put out an advertisement there, you have to make it non-resident Indian (NRI) targeted, it is kind of difficult. Whereas, if you dub you must understand there is half an India lying across Indonesia, Bangladesh, Malaysia and that is kind of easy pickings. So that is our next campaign.
Also, we find that second generation Indians there don’t tend to look at our content very easy. It is only the 40 plus generation who is watching there. People who are used to television, so our content is resonating with the people in Indonesia and Malaysia much more.
I just wanted to get a little more to talk about competition since you brought that topic. Netflix still has pole position and so do a couple of others like Amazon etc. how are you sort of competing with some of these larger players?
We are now like I said, 2.5 million user base. Unfortunately, data numbers aren’t published today. The only measure that we have to show that we are at pole position, is that we are the number one repository of original Indian content and that is what our real peg is for the market. We have got 21 shows live as of today. Plus 3 original kid shows plus a whole host of shorts. So, that is what puts us at an Indian pole position for sure. Maybe there is a very select set of tier I people who are watching other English competition somewhere, but we are not in that market at all.
And you don’t plan to be?
We don’t plan to be in that market. Our market is widespread. We make a
Bose, we make a Kehne Ko Humsafar Hain, we make Ragini MMS, and therefore we have a whole buffet set out for the stalls audience also to the balcony and whatever you call.
Yes, in the last year if you see we kind of rationalised our movie business. We haven’t kind of invested in any movie till we thought it was going to recover any money. So, from a Rs 2 crore
Your movie business under lot of pressure for very long. Are things improving at all?
earnings before interest, taxes, depreciation, and amortisation (EBITDA), that was there is a year before last we have closed this year, with a Rs 54 crore EBITDA, that is largely because of the fact that we didn’t do anything loss making on movies.
We just made money on our past licenses. We decided not to green light our project. This year, we will do three to four movies which will also breakeven, so we are restoring that back to good health and so if you look at the EBITDA totally consolidated Rs 54 crore is the positive on movies and TV and there is Rs 95 crore odd negative on ALT.
We will definitely be in the black at a consolidated level in two and half years, because we will have Rs 50 crore profit in the movie and TV business and that will cancel the Rs 50 crore loss that we will reach.
At a consolidated level, when do you think you can be in the black?