In conversation with Medianews4u.com, Nitin Burman, Vice President, Head – Non-Subscription Revenue, Aha, explains the growth of alternate revenue streams including branded content, content syndication and on-ground events. Edited excerpts:
Aha’s FY22 revenue was Rs.76 crore, according to media reports quoting Tofler data. Launched in 2020, the OTT brand shifted focus to brand solutions in 2021. What is the figure for all non-subscription revenue today?
We started off the brand solutions vertical for aha in the month of May 2021, which is anything to do with non-subscription revenue. The thought process was that instead of jumping into the AVOD landscape, we will focus on brand solutions and branded content. With CenterFresh we got our first show and that was the point when we realised that brand awareness can be floated through our shows as well. Then we had a series of shows. We had aha Bhojanambu which was hosted by actress Lakshmi Manchu. We had three seasons of the show; it is under a different name now – we have changed the IP name to Chef Mantra. We will be launching the fourth season this year. Brands ranging from ITC to retail brands are on the show. That also gave us an insight that non-fiction is something we can work on as part of the content strategy. No national OTT platform, apart from the Bigg Boss OTT, exclusively streams non-fiction shows for the platform. Normally, they have a digital leg of the TV shows on the OTT platform. Since we didn’t have a TV channel, we started everything from scratch. Today we have eight to 10 non-fiction shows that brands are sponsoring.
We started with content syndication and brand solutions. In the first year of our operations, we (brand solutions) closed at Rs. 8 to 8.5 crore of revenue, which was split between brand solutions (60 pc) and syndication (40 pc). In content syndication we focused on syndicating our shows to other OTT platforms in Hindi (dubbed). The dubbed version of our shows was picked up by MX Player, Ullu etc. We have a few aha original movies which were made for OTT and sold a few of them to satellite channels. In the second year of operations, we closed at Rs.24 to 25 cr overall.
This year we are looking at Rs.50 crore. We have added categories, we started doing on-ground events. Our YouTube channel has also become a serious business for us. We have over 3 million subscribers and for YouTube we are doing a branded show which is an advertiser funded program (AFP). It’s a game show related to cricket which is called aha Dugout where two celebrities will come and play games. There will be a celebrity hosting the show.
How much does non-subscription revenue contribute to the total?
Of the overall aha revenue, currently, non-subscription will be close to 30 pc. Subscription is our biggest revenue stream and the aim is to start contributing equal to that.
Besides subscription, revenue growth is driven by brand solutions, content syndication and AVOD. What is the contribution of each of the three and how is each growing?
Brand solutions contributes 55 pc of the non-subscription revenue. We were growing at a 100 pc year from one to year two; year two to three it was almost 70 pc growth.
AVOD we started off last year, which is the first year for the category. At that time it was just 10 pc of the overall kitty. This year we expect it to grow to 25 pc of the overall non-subscription revenue.
We started events three months back. Currently we are looking at a 10 pc contribution. We are planning to do bigger events in future. So going forward we look for the category to contribute 20 to 25 pc.
Around 30 pc revenue comes from content syndication. The category definitely has potential. We are doing satellite and our content’s dubbed syndication. Now we have extended our arms to international syndication as well. We are witnessing a surge in demand for South Indian content across borders. Recently, we have closed a deal with Japan TV. We are also surprised to see the demand coming from Russia, Japan. International syndication is something which we are seriously thinking about. It definitely jas potential.
You have said 60 pc brand solutions revenue is from retail/regional and 40 pc from national advertisers/brands. AVOD has 80 pc national share and 20 pc regional participation. Has this ratio of national vs retail / regional for brand solutions and AVOD changed in the last two years?
Not much. Regional brands love to invest on shows as there are sentiments attached to it. They want to associate with big artistes – a reason why they pick up sponsorships. Second reason is that they want to be ahead of their competition. One thing we have observed in the regional market is, if a X brand has taken sponsorship for Season 1, the same category competitor will come to us in Season 2 and they are ready to pay a higher amount.
Tell us about your largest on-ground IPs. How have they grown year on year?
For me, the largest one we have executed is the comedy nights which was a six-city tour with comedians. We got comedians in both Hindi and Telugu. The next big one we are planning is ‘aha Swag Star’, which is a college talent hunt show. We will be covering 100 colleges; we are planning to showcase it in an episodic format on our platform.
You plan to venture into music, talent hunts, and film festivals. When will we see them happen? Will you also amplify the same as content on Aha?
We are working on it. Hopefully, this year we are planning to do a music tour with our Indian Idol singers. It will be a multi-city tour across Andhra Pradesh and Telangana. You will start seeing our music concerts from January 2024 onwards.
In terms of amplifying the content on the platform, it depends. When it comes to live music, it is something which we can put on aha. But with recorded content it depends on the rights of the artistes we are working with.
Yes, aha as a platform is capable of live and we will be able to do live telecast on our platform.
In the longer term, what is the split you see between subscription and non-subscription revenue?
I think in the long term, we want to be the higher contributor in terms of the revenue. That’s the plan. From the subscriber point of view, the biggest problem is retaining them. The second thing is with competition becoming so aggressive in regional markets as well, you would also want to have a sustainable revenue source which will be able to carry the brand ahead.
And third, it will also help me in taking my platform at lower cost to tier 3 and 4 towns of AP and Telangana. With 4G and 5G penetration in rural villages, I believe AVOD is going to be a big game changer for us, especially with the rural audience.
Is non-subscription revenue the key driver for profitability in the Indian context, given low subscription rates for even ad-free content?
OTT giants like Amazon Prime and Netflix who are very proud of being ad-free platforms also have announced that they are going to come up with ad plans. Definitely, this will help in reaching out to consumers. There will be two types of consumers. People who want an ad-free experience and are ready to pay the extra money, they will pay it. In India there is a major section who are not looking to pay subscription fees for each app. Either we will have to come up with a bundled plan like cable TV subscription or you will have to come up with set top box kind of plans or lower rental plans which are ad supported. Most of the apps in India are going the hybrid model way.
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