ALTBalaji records 18X growth in subscription in FY19; claims 3rd spot in OTT

ALTBalaji financial results for FY19 are out and the OTT platform has shown growth in all aspects.

First, let’s evaluate their performance in the last half year of FY19. In Q3 and Q4, even with the same amount of expenses (Rs 45.8 crore), the company managed to take the revenue up 71.1% from Rs 8.04 crore to Rs 13.76 crore. Consequently, the losses shrank by 17.4% from Rs 36.4 crore to Rs 30.07 crore.

Where that is great for the profitability metrics of the firm, a constant burn at this nascent stage does raise a little concern over how, if the number of programs on the platform increased, the burn didn’t. What is it here, that ALTBalaji did right or wrong?

Entrackr sent queries to ALTBalaji regarding the same. The story will be updated as and when the responses come in.

Back to the numbers, the Balaji Telefilms owned OTT platform added 8.2 million paid subscribers during the three month quarter - taking the number from 13.1 million to 21.3 million. As of May 15, 2019, this number stood at 23.5 million.

Compared to FY18 the subscribers have seen a 17.8X jump from 1.2 million subscribers at that time. During the fiscal year, the company added 20.1 million subscribers in total.

Financially, this translated to 6.2X leap in revenue from Rs 6.8 crore in FY18 to Rs 41.87 crore in FY19. The expenses increased 46.4% from Rs 112.1 crore to Rs 164.15 crore, and losses took a 20.7% upturn to Rs 114.92 crore from Rs 95.2 crore.

This showcases a tremendous growth in efficiency where the cost to earn a rupee went down from about Rs 16 in FY18 to Rs 4 in FY19.

Talking about just the Q4s of these two fiscal years, the revenue almost quadrupled from Rs 3.7 crore in Q4 FY18 to Rs 13.76 crore in Q4 FY19. And with extra expenses of just Rs 10.7 crore, the firm managed to keep the losses almost similar - Rs 29.5 crore in Q4 FY18 and Rs 30.07 crore in Q4 FY19.

And hence, not very surprisingly the ranking of ALTBalaji amongst the OTT platforms in the Indian market improved. While it claims a #3 spot based on App Annie data, it seems mysterious how it poses itself above Amazon Prime and just third to Netflix and Hotstar. In fact, according to their App Annie sourced data, Amazon Prime isn’t even in the top five.

Not taking away from their obvious growth, 3rd position in the market seems far fetched. Last we checked, the company had rolled out news on this achievement via the report published in October 2018, but the data in that report was based on 2017, again showing scope for faults.

Queries have been sent to the firm around this concern as well.

Apart from this, it seems that shows like Bose, Apaharan and other ALTBalaji originals have been working well for the OTT platform’s growth. But that’s not all. As we earlier mentioned in a past article on the firm’s growth, a part of it is inorganic.

ALTBalaji drives sales through numerous partnerships and dealings with telcos, payment platforms, ISP, DTH and OEMs. Not just that, the firm has also partnered with music streaming applications to market their shows via adding their Series’ tracks on the music app inventories.

These moves, while good for brand recall and sales driving, are a little unstable in their result generating potential and cannot be relied upon for long term due to the costs attached to these schemes. But as far as the new financial results are concerned, the Ekta Kapoor led firm seems to be able to work its way well across these mechanisms for the time being.