well remove movie biz which has has failed largely and what you find is a good cash cow in TV biz. Balaji is also a victim of monopoly of some channels which caps its profit share from popular serials. ALT will prove to be a breaking out of these restrictions. Value creation happens when shareholders realise its potential. It could happen rather quickly.
According to me, this new ALT will substitute the movie business and drain part of serial profits at least for couple of years. Contrary to what many feel, I don’t see internet subscription business as profitable ones in India in near future (look at eCommerce, they grew in scale but not yet profitable). Tell me a single Indian internet business which is making CASH. You can count them on fingers.
One point in favour of Alt is the diaspora and quenching their thirst for Indian content. They may be more receptive to paid subscriptions. Will be interesting to see the foreign vs domestic subscriber numbers in a year or so. The Amazon tieup is also likely with an eye on the diaspora, as the Fire stick hasn’t been a big hit in India.
From their communication, it appears they’re managing their movie business well,’ de-risking’ is a term they use often (both Sameer Nair and Ekta), so losses could be trimmed. Basically selling off rights at an early stage and curtailing risk (and reward).
Disc: Invested, ~10% and bullish on long term potential
Looking at 2 million subscribers in FY18: ALTBalaji:
So, your target can be achieved by this year against minimum requirement of 2 mn by 2020. Has it changes anything of your analysis?
Hi - I wrote those statistics in Dec 2016. When i guessed that Balaji may charge 2,000/yr as subscription (as shown in my link to excel sheet - in my original post, first post of the thread). Looks like the subscription will be around 1,000/yr
as there is no indication of raising it from current rack rate levels. And so now the minimum requirement double or 4 mn subscribers by 2020. In fact, the Management/CEO also mentioned the same thing in their interviews to the TV anchor about 1 - 2 months back.
Hope this helps.
But now, if management can achieve 2mn in 2018 then by 2020, it can be 6 mn
as content will get added and internet penetration can be very high. Slow
Internet stopping me from checking these services.
Yes the management has been raising their FY18 subscriber expectations.They started with 1 mn when they launched the app in mid april this year. Then raised it to 1.5 mn around result time, end-May. And yesterday they raised it again to 2 mn. If 2 mn subscribers by FY18 happens - then it is a very big/encouraging thing!
In mid-April, during the time of the launch, CEO also said that by 2020, 4 mn is needed to break even. But may be they get 10 - 20 mn subscribers if the trend catches on. All these are extremely extremely bullish numbers, if they turn out to be correct in the next 3 years. Do the maths.
Just a word of caution - I personally discount what management says as many times management themselves don’t know the potential of the business.So management regularly under/over estimate the potential.
Relevant example: Ekta Kapoor bought her own stock (almost 1%, i guess) between 110 - 130 levels recently in end May/early June and not during late last year when the stock was available at a throw away no-brainer price of between 77 - 90 bucks for months - the time when I started this thread and accumulated my portion!
It probably says that she herself had no idea of the business potential and the rising price (or may be subscribers numbers) probably confirmed it to her.
I think the cloud storage cost should also be considered as i am from this field technically. They data which all these movies and e commerce business is stored I think will give a uplift to cloud storage data center companies more than these companies.
Do we have any domestic stories for cloud storage?
p.s: I dont intend to divert the topic but asking just out of curiosity.
Disclosure: Not invested in Balaji
Mindtek is one of them but they are contractors for IBM. Seagate. They are good and have good projects I work directly with them and Tejas who are into networking n recently into storage servers The IPO which is released is really good company as it has very good growth.
This space is into disruption and that the risk one going to take while buying old contentment creators, I think next generation not going to watch serials they create.
second youtube is free.
3rd AIB , TVF & many others are creative and millions of dollars of backing from PE
4th Netflix & Amazon
5th TV is stupid box (I don’t watch it & many of my friends have stopped wasting time watching it) instead we chose to watch TED , History Channels & Science & Technology over internet.
6th Before social network was not there people used to timepass more on tv … times are changing with more 4G penetration into villages people not going to watch foolish things rather more users going to consume FB ,Twitter & ValuePicker.
Worst content creators of the world
It would be too naive to assume that she didn’t have idea of business potential. She would have been gauging the response. There is high chance of execution risk.
The key for success of the platform is if they can keep creating new content that attracts new subscribers and can keep existing ones engaged enough to continue renewing the subscription. The rental can’t be too high, but the platform should generate enough cash to fund the new content. This is next to impossible in initial few years, regardless of what management says. They would need to bring in strategic investor. There existing library of new contents is minuscule and also there isn’t much content obligation at this moment. They would need heavy capex in initial years for decent subscriber growth. The recent netflix number shows they have content obligation of $15 billion, debt of $3 billion over revenue of $8 billion.
The good part about this model is it gives them a chance to scale growth, which otherwise was not possible with just the TV business. She knows the pulse of viewers and hopefully able to control cost and generate value for shareholders.
Disclosure - Invested at lower levels.
I agree… Ekta is very smart… And Sameer Nair is equally smart… He
would not have moved from star ( think I am correct here) if he cannot
retire with the stock options at Balaji… Sure ekta waited for the
response to Alt before cornering more shares… To be correct in last 1 yr
June to June she had bought 1.7M shares from bse out of which 0.7M is in
last 3 weeks alone…
Can any technical analyst confirm that Balaji chart has completed
- a cup and handle pattern and now will move up to 220 bucks (up movement equal to the depth of the cup i.e. 150 minus 75/80)
- wave 4 of Elliott waves and now it is in wave 5 and there after will do wave a, b, c.
thanks and apologies if all these sound Chinese to many of you. You are not missing out, it sounds the same to me so the question to technical experts!
Amazon India’s first original series “INSIDE EDGE” is available for streaming, total 10 Episodes in Season-1.
Series is of High quality and engaging content.
Alt Balaji - on target to break even in 3 yrs as planned - says its CEO. The App downloads are close to 4 Million
Alt Balaji to launch its first Bengali web series shortly
What valuation should I target?
I want to add more but I don’t know how to evaluate this - ALT Balaji. If valuation is very comfortable then I would like to add more. So, please give view in respect of recent changes.
Disclosure: I am invested.