Zee's bet on Radhe for both OTT and pay-per-view release may not have paid off

On the other hand, analyst Karan Taurani, who closely tracks the media and entertainment space and is Vice-President, Elara Capital, said that Zee's bet on Radhe has not paid off.

Pay per view not paying off

According to Taurani's assumptions, the number of subscribers who got on board to watch Radhe is around 0.9 million (nine lakh). And during the opening weekend, he said that this number would have gone up to 2.5 million (25 lakh).

"Even within subscribers only 30-40 percent are new. And the ones who have paid the larger chunk are existing Zee5 subscribers, which means overall realisations are very low for such a large film which is approximately Rs 20-25 crore opening weekend."

If we look at the last three Salman Khan Eid releases in theatres including Bharat (2019), Race 3 (2018) and Tubelight (2017), the opening weekend collections have been around Rs  90 crore, Rs 100 crore and Rs 61 crore respectively.

If we look at Zee's plan offering Radhe on either Zee Plex and ZEE5, the existing Zee5 subscriber is eligible for one view whereas a new subscriber can pay Rs 499 to subscribe for the platform annually including one view of Radhe. Viewers can also watch Radhe on Zee Plex for Rs 250.

Zee5 currently has 65.9 million monthly active users (MAU) and 5.4 million daily active users (DAU).

Taurani thinks that a large chunk of views on Zee5 has come from existing subscribers and added that only partial number of the viewers have actually ended up paying Rs 250 for the film.

In that case, the cost of acquisition is high as Zee paid around Rs 225- Rs 250 crore to acquire Radhe, out of which 40 percent is for music, overseas, satellite and 60 percent is for digital, according to industry experts.

Experts believe that it will be difficult for Radhe to breach half of the digital rights cost.

But limited revenue on OTT or pay-per-view platforms isn't the only concern. For Zee, another issue is piracy which other OTT platforms have faced earlier too.

Piracy is a problem

Radhe which was made available on both Zee Plex and ZEE5 on May 13 was leaked online soon after its release on various platforms including WhatsApp and Telegram.

While Zee has filed a complaint at the cyber cell, the issue of piracy will be a matter of concern.

Senior Trade and OTT Analyst, Girish Wankhede said that it’s a big issue and it has to be curbed fast. "Streaming from illegal websites and apps like Telegram has put a huge dent of Zee’s revenues and it needs to be rectified fast."

Even Taurani thinks that number of viewers will take a steep hit in coming days due to ease of access to pirated content.

New subscriber additions

While Radhe's business may not have been strong on pay per view, it is not all bad news for Zee.

This is because Radhe's addition in its content portfolio will help the company get more subscribers on board.

Taurani estimates that "the only big advantage it (Zee) has is that this (Radhe's release) will lead to a marginal spike in the number of new Zee5 subscribers. It is believed that the renewal ratio on new subscribers is healthy at 60-70 percent," he said.

Filmmaker and producer Akshay Bardapurkar pointed out that for any OTT content in key. "OTT is all about stacking up content. The more content you have that contributes to overall valuation of your company." And this is why he thinks that Radhe is an important addition to Zee's portfolio.