Riding the boom in the OTT space, ALTBalaji, the digital venture of Balaji Telefilms, witnessed revenue growth in the second quarter of FY20 at Rs 20.1 crore.
The growth in revenue in the second quarter has helped the company post revenue of Rs 32.4 crore in first half of FY20.
"In the first year of our operations we made Rs seven crore, in the second year Rs 42 crore and our guidance is that this year we will make Rs 80 crore of revenues," said Nachiket Pantvaidya, CEO, ALTBalaji and COO Balaji Telefilms.
He said the strategic deal with Zee5 was a big driver behind the surge in revenue.
"One reason for that (guidance for FY20) is our Zee5 deal. In the first half, only 20 days of September saw the effect of Zee5 deal and this will get amplified in the second half," he said.
ALTBalaji's exclusive content alliance with Zee5 went live in September.
The video streaming platform believes that the alliance with Zee5 will help in reducing content-related expenses and drive direct subscription revenues. Till now as many as five shows have been co-produced and are live and another 50 plus concepts are in the pipeline.
After the partnership with Zee5, ALTBalaji has moved to single partner system from multi-partner. This means that there will be no ALTBalaji content on telcos.
Before the Zee5 deal, ALTBalaji's user base of 23 million saw 80 percent to 90 percent subscribers coming through telco partners. And Pantvaidya said that the ARPU (average revenue per user) from these subscribers was low.
This he expects to change with Zee5 coming on board.
"While we will lose considerable subscriber base from October (due to no ALTBalaji content on telco partners), our subscriber base will be direct and we will see growth in revenue due to improvement in ARPU," he said.
He added that "in the first two years we had to go with telco partnerships and offer free content because of weak content library but now we are exiting that model and going into paywall model,” Pantvaidya said further.
ALTBalaji offers subscriptions for Rs Rs 300 a year and Rs 100 a quarter (three months).
Pantvaidya also claims that revenues of ALTBalaji are going up by 60 percent to 70 percent every year.
“ALT will break even in the next four to six quarters. Losses have been reduced by 40 percent to 50 percent year-on-year. We are not trying to over invest in digital. We are still on the target to bring 25 to 30 shows every year. As our library builds, we will see more encouraging quarters,” he said.
ALTBalaji currently has as many as 49 original shows and aims to take it up to 60 to 65 shows in about six to seven months’ time.
"We have a cash reserve of Rs 250 crore plus which we will keep adding to and the good news is that cash surplus is not getting depleted. Fifty percent of the cash reserve we will reserve for creating content and customer acquisition in the year coming by," he said.