(with inputs from Salman SH)

During the quarter ended June 2017 (Q1 FY18), Balaji Telefilm’s video streaming app ALT Balaji received 4.2 million downloads, up from 2 million downloads in the last quarter.

The company added that it made Rs 2 crore in gross billing during the quarter, via free to paid conversion of ALT Balaji users. The app features both free and paid content and also provides a subscription option. Revenue recognised in case of ALT Balaji for the quarter was Rs 80 lakh, with revenue recognition on the basis of the plan selected by the subscribers. This indicates that a significantly larger number of subscribers opted for plans higher than 3 months. Q1-FY18 EBITDA for the ALT business was a loss of Rs 31.3 crores, versus Rs 3.2 crores for the same quarter last year (prior to the launch of the service. Balaji says that the higher loss is due to marketing expenditure for the business, and the expensing of content spent. The operations reported a Loss after Tax of Rs 29.9 crores, versus Rs 70 lakh for the same quarter last year. Total amount invested in ALT as of 30th June 2017 was Rs 100.2 crores

The Numbers:

  • Gross Billing: Rs 2 crores
  • Watch Time (Minutes consumed per active session of usage): 72 minutes
  • Users completed watching an entire series: 125,000
  • Minutes of video consumed: 160+ million
  • App downloads: 4.2 million.
  • YouTube video views via masthead campaign: 10 million

MediaNama estimates

ALT Balaji’s gross billing for the quarter was around Rs 2 crores, while the revenue recognized for the quarter was around Rs 80 lakh. That’s around 40%. Given that revenues for longer term subscription plans would have been recognized during the quarter, this indicates that a minimum of 60% of subscriptions were of 6 or 12 months. It’s likely to have been more.

We did some calculations for ALTBalaji: essentially, there are 3 plans, of 3 months (Rs 100), 6 months (Rs 180) and 1 year (Rs 300). The first set below assumes that there were mostly 3 month subscriptions, the second, that there were mostly 6 month subscriptions, and the last that there were mostly annual subscriptions. We calculated ARPU for the quarter, for different combinations of subscription plans: for 12 month plans, we’ve only recognised gross billing for 3 months, by dividing the total amount by 4. Now if you divided the quarterly collections by the ARPU estimate, you get the total number of paying subscribers. Divide total app downloads by paying subscribers, and you get the conversion ratio.

One calculation missing from this is based on the estimate is with the assumption that there were a maximum of 40% subscriptions of the 3 month plan.

 So the conclusion (and do correct us if we’re wrong):

  • Subscription base (estimate): 200,000 (minimum) to 266,667 (maximum) subscribers, likely to be close to the 240,240 mark (assuming around 30% subs with 3 month plans)
  • Quarterly ARPU (estimate): between Rs 75 and 100, likely to around Rs 83.25.
  • App Download to paid subscriber conversion: 4.76% and 6.35%, likely to be close to the 5.72% conversion range.

Financials

  • Loss after tax (including ALT Balaji) for the quarter was Rs 23.4 crore, up from a loss of Rs 30 lakhs in the same quarter last year. However, excluding ALT Balaji, the company posted Profit After Tax of Rs 5.7 crore during the quarter. 
  • Overall revenues (including ALT Balaji) stood at Rs 144.6 crore, up 18.8% YoY from Rs 117.4 crore in Q1FY17. Excluding ALT Balaji earnings, the company reported revenues of Rs 143.8 crore for the quarter.

ALT Balaji partnerships during the quarter

The company has entered into multiple partnerships during the quarter to grow its user base.

  • Tech companies: like Microsoft, Apple, Google, YouTube, Amazon, Ola among others for app integration. With the Amazon tie up, ALT Balaji was made available on Fire TV Stick, which also supports competitors like Netflix, Prime Video, Hotstar, among others. It also partnered with Ola for adding the app into OlaPlay, the in-cab entrainment system.
  • For Payments: In the domestic market the company partnered with Airtel Payments Bank, Jio Money, and PayU for UPI based payments. It also has carrier billing deal with Fortumo. It also partnered with PayPal for international payments.