Reliance investment a new ray of hope for ALT Balaji?

With proceeds from Reliance Industries’ Rs 413 crore investment in Balaji Telefilms going specially for ALT Balaji, we look at how the OTT platform has fared, where did it falter and the road ahead

by Madhuwanti Saha
Published - Aug 8, 2017 8:27 AM Updated: Aug 8, 2017 8:27 AM

Word in the digital industry is that Balaji Telefilms’ SVOD (subscription video-on-demand) platform ALT Balaji’s metrics haven’t picked up as well as Balaji had expected in terms of downloads and viewership numbers. Now with Reliance Industries’ decision to buy 24.92 per cent stake in the Ekta Kapoor-owned Balaji Telefilms for Rs 413.28 crore, things seem to be going in the right direction for ALT Balaji.

 It was mentioned in the BSE filing that proceeds from the transaction would be utilised to further speed up content development initiatives,  especially for ALT Balaji, ‘thereby providing it with a strong ability to compete with other OTT service providers- both global and Indian.’

Balaji Telefilms’ press release stated that post its April launch ALT Balaji has garnered over 4 million downloads across 80 countries. The digital business is negative in balance sheet due to increasing investments to scale it. Earlier Balaji Telefilms shared in a BSE filing before augmentation that it would raise Rs 150 crore from a clutch of international investors by selling 14 per cent stake in the company.

One of the sources we spoke to shared that Alt Balaji would have spent close to Rs 60-75 crore with Rs 20 crore in marketing and rest in original content production and movie acquisition. The digital streaming service was launched with eight shows followed by a few more shows later on. ALT Balaji CEO Nachiket Pantvaidya had mentioned to us earlier that Alt Balaji will be putting out 32 shows in a year, promising bold and new age content.

Most of them believe that India is not yet ready to pay for subscription, ALT Balaji’s business model.  “It will take time for people to see value. You cannot launch an app with 4-8 shows and assume people will pay for those. What’s the replacement value? How soon will you get your next shows? People need content every day,” pointed out a source.

The content on the platform also received flak and the move to put the first few episodes on YouTube (to bring in subscribers) is also speculated to backfire as the web-series didn’t have the pull factor, according to the sources in the digital space.  Most of its original series met with mixed reactions on YouTube with ‘Dev DD’ fetching maximum of 2.3 million views for its first episode on the same platform.

A founder of a digital media company who didn’t wish to be named said, “Maybe the YouTube audience didn’t like it but the content really works on the platform. Several others have tried the YouTube strategy but it doesn’t always lead to subscriber growth.”

He added, “But they are doing the same stuff what they did on TV but by adding more sexual content. You need to have young people create content for the young audience.”

Then Ekta Kapoor’s most ambitious project for ALT Balaji, ‘The Test Case' starring Nimrat Kaur, hit the wall after a delayed first episode.

Another founder of a new age media and entertainment company who chose to be anonymous pointed out that it’s too soon to jump to conclusions about their content. “Each OTT is trying to find its own niche which brings different kind of consumers. For instance, Hotstar’s focus is on TV shows and sports, Netflix has its eyes on international content and start up comedy and Voot has started focusing on kids’ space.”

It was also speculated that few shows were kept on hold till Reliance came on board. In fact two shows a Bengali web-series ‘Dhimaner Dinkaal’ and a comedy drama ‘Fourplay’ were announced days after Reliance Industries’ investment in the ALT Balaji. In fact, the Bengali series is reported to have a second season with a budget of Rs 6 lakh per episode.

Most of the people we spoke to mentioned that none of the OTT players (especially Indian) have managed to crack the code when it comes to engaging content owing to India’s diverse audience and have a bleeding balance sheet.

Nonetheless the Reliance investment has been considered to be a step in the right direction by the industry. Dinesh Vyas, Associate Associate VP (Planning), OMD, pointed out it’s a strategic investment, and said, “I think it’s in line with what Reliance Industries has planned over the years. It’s trying to invest in the content space with increased interest on OTT platform and digital spends going up. It only enhances the offer Reliance Jio has made to its customer.”

 Another producer, who didn’t wish to be named, said, “It’s a strategic investment because Reliance Industries already has a broadcast and digital arm and invested in Network18 in the past. What they were lacking was a content arm. So it synergises with their larger strategy. It’s a win-win situation for all.”

The investment also makes sense considering the similar audience profile of both Balaji Telefilms, creator of popular television shows like ‘Naagin’ and ‘Kundali Bhagya’ and Reliance Industries’ VOD app Jio Play.

We tried contacting Balaji Telefilms for their comments but we didn’t get any response.

Before Reliance Industries’ investment in Balaji Telefilms, its former CEO Sameer Nair quit after three years on July 15. 

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