Latest news with #VivekMenon
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Business Standard
3 days ago
- Business
- Business Standard
Indian OTT platforms continue to expand, but on smaller scale with low risk
Indian media and entertainment companies continue to rely on their streaming segments, but at a cautious pace—focusing on profitability and limiting financial risk. Major players with pan-India audiences, such as Zee Entertainment Enterprises' (ZEEL) ZEE5 and Balaji Telefilms-backed ALTT, have reduced operational costs over the years and rebranded their over-the-top (OTT) platforms. While the OTT industry broadly aims to cut costs, media analysts and executives note that this trend is more prominent among platforms launched by Indian companies, which cannot match the spending capacity of global giants like Netflix and Amazon Prime Video. The only notable exception is Reliance Industries-backed JioHotstar. 'OTT platforms have been present in India for the last 10 to 15 years… Even the most lenient investors would like to see some return right now,' said a media analyst, on the condition of anonymity. In FY25, ZEE5 recorded an EBITDA (earnings before interest, taxes, depreciation and amortisation) loss of Rs 550 crore, down from Rs 1,110 crore in FY24. This reduction was largely achieved through cost-cutting measures. In an investor presentation, ZEEL stated it aims to break even on ZEE5 from an EBITDA loss of Rs 548 crore (excluding network costs) in FY25, and is now positioned to become a leading and profitable OTT player, having completed its recent investment cycle. ALTT, meanwhile, has consciously scaled down operations, said Sanjay Dwivedi, group chief executive officer and chief financial officer, Balaji Telefilms. The company was burning Rs 145 crore annually to sustain the segment, which was unsustainable. 'As a result, we cut down on cost and reworked our strategy. We want to be Thums Up to Coke... Netflix and Prime Video will exist, and we will exist in a smaller way—we don't want to burn cash,' he said. According to Vivek Menon, managing partner at NV Capital, a media and entertainment fund, this shift is more visible among pan-India streaming platforms—particularly those buying content from Bollywood and the Tamil and Telugu markets, where content costs are higher. He added that OTT adoption only truly accelerated post-COVID, so the business is still in cash burn mode to build a subscriber base and requires a long, patient approach. 'It is a tough game right now for Indian players because the industry is still in the growth stage. The audience has enough free alternatives to consume content. Also, a streaming platform needs massive pockets to succeed,' the analyst said. Shemaroo Entertainment's Gujarati-focused platform ShemarooMe is 'on the road to profitability and viability,' according to Saurabh Srivastava, chief operating officer, digital business, Shemaroo Entertainment. Srivastava noted that the company saw high double-digit revenue growth in Q1 FY26, and will continue investing in its streaming platform. He said the industry is learning to rationalise operational costs and push for higher returns on investment. The subscriber base also grew by a high double-digit percentage year-on-year in Q1 FY26. Meanwhile, Hoichoi—a subscription-based video-on-demand (SVOD) platform focused on Bengali-language content—achieved cash breakeven in FY24. The platform currently hosts close to 200 original web series. 'As a production house creating Bengali films and TV for 30 years, transitioning to web content was a natural evolution,' said Vishnu Mohta, co-founder, Hoichoi. 'We focused deeply on one language—Bengali—and on serving that audience consistently. Over 60 per cent of our total expenses go into content creation. That's intentional. Unlike many platforms that spend heavily on marketing even when unit economics don't work, we've always aimed to keep marketing spends below 30 per cent of direct revenue.' He added that this approach—combined with strong intellectual property (IP) creation and organic subscriber growth—has kept the company profitable over the last few years and cash-flow positive for the past couple. Just as Balaji Telefilms expects its digital business to grow, Mohta noted that Hoichoi is considered a core business for its parent company. Media executives and analysts broadly agree that the OTT industry continues to grow, with each platform finding its niche. With several sub-segments still underserved, there is ample room for differentiated growth. 'Moving forward, it looks like most networks have a grasp on how the OTT model works and how one can monetise through subscriptions and advertising. The fact that ZEE5 is completely rebranding itself shows that investment in the sector will continue,' Menon said.
Time of India
5 days ago
- Business
- Time of India
New script unfolds in media world
Warner Bros Discovery 's decision to split into two separate entities, just three years after its headline-grabbing merger, reflects a broader dismantling of the old media conglomerate model where everything from streaming to cable to studios was bundled under one roof. With streaming now the primary growth engine, companies are under pressure to separate their fast-growing digital verticals from slower legacy businesses such as linear TV , cable news, and broadcast, industry experts said. The idea is to create leaner, more focused businesses that can compete more effectively in the crowded streaming space, be valued independently, and attract sharper investor interest, after years of eroding valuations. 'Given the rise of OTT platforms and the market dominance of Netflix, studios are being forced to rethink,' said Vivek Menon, managing partner at NV Capital, a debt fund focused on media and entertainment (M&E) industry. 'They're separating high-growth content and digital units from cable and traditional operations that are seeing only low-single-digit growth. Netflix's valuation is setting the benchmark and everyone else is chasing it.' The move by Warner Bros Discovery (WBD) to split its operations mirrors steps taken by other media giants like Comcast and Lionsgate . In late 2024, Comcast spun off NBCUniversal cable networks, including CNBC, MSNBC, and SYFY into a separate public entity called Versant. Lionsgate followed suit in May by separating its Studio and Starz units. Analysts see these breakups as a response to the slow breakdown of linear TV economics and the rise of streaming as the dominant consumption mode. According to Nielsen's The Gauge report, streaming overtook the combined share of cable and broadcast in May 2025, accounting for 44.8% of total TV usage in the US. WBD's restructuring will create two standalone companies: one focused on streaming and studio operations including HBO Max , HBO, Warner Bros Pictures, and DC Studios; and another housing traditional networks like CNN, Discovery, and Cartoon Network. CEO David Zaslav will lead the streaming-first unit, while the bulk of WBD's $37 billion debt will sit with the legacy cable business. To support the realignment, WBD has secured a $17.5-billion bridge loan and plans to buy back up to $14.6 billion in debt. The cable unit, Global Linear Networks (GLN), will hold a 20 percent stake in the streaming entity, which can be monetised later. 'WBD's linear struggles aren't unique,' said Paul Erickson, principal analyst at technology research and advisory group Omdia. 'Comcast and Lionsgate have done similar splits to create operational clarity and increase appeal for future deals or capital raises.' Morgan Stanley called the WBD move long overdue. It valued the streaming and studios business at over $40 billion, using a 12x EV/Ebitda multiple, while GLN was assigned a 5x multiple and projected to carry negative equity due to its debt burden, even after factoring in its 20% stake in the digital business. WBD has been cautious about its moves in India. After shelving plans to launch HBO Max as a standalone service, the company chose to license HBO content to what is now JioHotstar.
Time of India
5 days ago
- Business
- Time of India
New Script for Media: Warner Bros Discovery split marks end of bundling era
Mumbai: Warner Bros Discovery 's decision to split into two separate entities, just three years after its headline-grabbing merger, reflects a broader dismantling of the old media conglomerate model where everything from streaming to cable to studios was bundled under one roof. With streaming now the primary growth engine, companies are under pressure to separate their fast-growing digital verticals from slower legacy businesses such as linear TV , cable news, and broadcast, industry experts said. The idea is to create leaner, more focused businesses that can compete more effectively in the crowded streaming space, be valued independently, and attract sharper investor interest, after years of eroding valuations. "Given the rise of OTT platforms and the market dominance of Netflix, studios are being forced to rethink," said Vivek Menon, managing partner at NV Capital, a debt fund focused on media and entertainment (M&E) industry. "They're separating high-growth content and digital units from cable and traditional operations that are seeing only low-single-digit growth. Netflix's valuation is setting the benchmark and everyone else is chasing it." The move by Warner Bros Discovery (WBD) to split its operations mirrors steps taken by other media giants like Comcast and Lionsgate. Live Events In late 2024, Comcast spun off NBCUniversal cable networks, including CNBC, MSNBC, and SYFY into a separate public entity called Versant. Lionsgate followed suit in May by separating its Studio and Starz units. Analysts see the breakups as a response to slow breakdown of linear TV economics and rise of streaming as dominant consumption mode. According to Nielsen 's The Gauge report, streaming overtook the combined share of cable and broadcast in May 2025, accounting for 44.8% of total TV usage in the US. WBD's restructuring will create two standalone companies: one focused on streaming and studio operations including HBO Max , HBO, Warner Bros Pictures, and DC Studios; and another housing traditional networks like CNN, Discovery, and Cartoon Network. CEO David Zaslav will lead the streaming-first unit, while the bulk of WBD's $37 billion debt will sit with the legacy cable business. To support the realignment, WBD has secured a $17.5-billion bridge loan and plans to buy back up to $14.6 billion in debt. The cable unit, Global Linear Networks (GLN), will hold a 20 percent stake in the streaming entity, which can be monetised later. "WBD's linear struggles aren't unique," said Paul Erickson, principal analyst at technology research and advisory group Omdia. "Comcast and Lionsgate have done similar splits to create operational clarity and increase appeal for future deals or capital raises." Morgan Stanley called the WBD move long overdue. It valued the streaming and studios business at over $40 billion, using a 12x EV/Ebitda multiple, while GLN was assigned a 5x multiple and projected to carry negative equity due to its debt burden, even after factoring in its 20% stake in the digital business. WBD has been cautious about its moves in India. After shelving plans to launch HBO Max as a standalone service, the company chose to license HBO content to what is now JioHotstar. Discovery+ remains WBD's primary digital platform in India. "India remains important, but expansion will be evaluated closely to ensure return on investment," Omdia's Erickson said. "Discovery+ will likely be the face of WBD in India for the foreseeable future." He said WBD's content bets will now become "more deliberate."
