Even as the number of users of OTT platforms and active paid users runs into millions, a look at the numbers of some leading players in the OTT space reveals that it might not be the most profitable and lucrative business.
While in some cases, companies state India revenues are lower than in other markets, in other cases, companies have been incurring losses and analysts predict further losses.
Zee Entertainment, which is to be acquired by Sony Pictures Network India (SPNI) has said in its regulatory filings that the revenue and EBITDA loss of ZEE5 for Q1 FY22 was Rs 110 crore and Rs 200 crore respectively.
The sequential increase in the revenues of Zee5 has been only Rs 4 crore it was pointed out in the company’s call with analysts. The management had stated that the increased momentum on subscription revenue was largely offset by the impact of Covid on advertising revenues.
“I think we have already stated that this will be the peak investment here for ZEE5, in terms of losses and as the revenue growth starts to come in, you’ll see losses coming down.
Although next year may only be marginally low, the year after that, you start to see significant changes in that”, Punit Goenka, MD and CEO of Zee Entertainment had said talking to analysts after the company declared its Q1 FY22 results.
For the first quarter of FY21, the revenue and EBITDA loss for the quarter was Rs 94.9 crore and Rs 145 crore respectively, as per company filings.
The monthly active users (MAU) has doubled from 39.7 million in Q1 FY21 to 80.2 million in Q1 FY22.
As per Emkay’s research, September’23E losses for both Zee5 and Sony Liv are seen at Rs 1,020.4 crore and Rs 510.2 crore.
SPNI-owned Sony LIV had a total of 6.8 million paid subscribers at the beginning of August 2021 and the platform is targeting to achieve 10 million paid subscribers by the end of the calendar year 2021, as per Emkay’s research.
Meanwhile, Zee’s board had declined Invesco’s demand to hold an EGM to remove Punit Goenka.
Analysts say that Invesco’s demand could delay the Sony deal and could keep the stock volatile in the short term.
Walt Disney, which operates as Disney+ Hotstar, has mentioned in its filings that its subscription revenue has fallen since the launch of Disney+ Hotstar. “The average monthly revenue per paid subscriber for Disney+ decreased 29.12% from $5.63 to $3.99 due to the launch of Disney+ Hotstar”, Walt Disney has stated in its filings.
This decrease is between March 28, 2020, and April 3, 2021.
It has further stated that Disney+ Hotstar’s average monthly revenue per paid subscriber is significantly lower than the average monthly revenue per paid subscriber for Disney+ in other markets.
In April 2020, Hotstar service in India was converted to Disney+ Hotstar and on September 5, 2020, in Indonesia.
Hotstar is an Indian brand owned by Star India and operated by Disney Media and Entertainment Distribution, a division of Walt Disney.
As per Statista’s recent research, the average revenue per user is likely to be flat in the pay-per-view segment, OTT advertising and video downloads. According to Statista, the average pay per view revenue is likely to go up only to around $3.44 from $2.84 now.
While OTT advertising revenue per user is around $2.27, it could go up to $3.05 by 2025.
According to Ormax Media, India’s OTT user base is 353.2 million people. There are 96 million paid users of OTT platforms.