She’s best known as India’s soap opera queen. For years, millions of people across the country laughed and cried in their living rooms every night as they attended weddings and funerals, and participated in epic family fights along with the characters of Ekta Kapoor’s melodramatic television shows. She inspired an entire genre of what came to be known as saas-bahu serials, which were so popular that when the hugely successful Kyunki Saas Bhi Bahu Thi killed off one of its most loved characters, Mihir, many heart-broken fans went into mourning—and eventually she was forced to bring him back to life.

Kapoor clearly has a finger on the pulse of television viewers in the country. The joint managing director and creative director of Mumbai-based Balaji Telefilms was only 17 when she started producing television dramas and over the next few years had some monster hits under her belt, from Kahaani Ghar Ghar Ki and Kasauti Zindagi Ki to Bade Acche Lagte Hain. Not surprisingly, her unprecedented small screen success only made her dream bigger. After nearly five years of making television soaps, she turned to the big screen in 2000—only that didn’t turn out to be as happy an experience. Kapoor, veteran Bollywood actor Jeetendra’s daughter, had a few big hits but many misses too; last year was particularly bad when nearly all her movies sank without a trace. Her movie business, Balaji Motion Pictures, has been making losses for years, dragging down the parent company, Balaji Telefilms .

But the 42-year-old film and television producer isn’t one to give up. Although her television serial business, which accounts for more than 60% of Balaji Telefilms’ Rs 416.32 crore turnover, is still doing well, Kapoor has her eyes firmly set on the future. She’s cut down on her movie business and a year ago, she decided to reinvent herself and made her foray into the world of digital entertainment.

In April 2017, Balaji launched its online avatar ALTBalaji, a video-streaming service, or, to use industry parlance, an over-the-top (OTT) platform. Incidentally, ALT Entertainment was conceived in 2010 to focus on films and television content for the youth, but its new avatar aims at reaching consumers directly on their smartphones instead of going through broadcasters.

Video-streaming is the hottest trend in the entertainment business today, globally and in India. Everywhere you go, people are hunched over their mobile phones watching movies, TV shows or videos on the Internet. As demand grows, global giants like Netflix and Amazon Prime Video, and homegrown Hotstar are slugging it out for a share of India’s over $200 million video-streaming market. And ALTBalaji doesn’t want to be left behind. “Despite not being a broadcaster, consumers were quite familiar with the Balaji brand. So, we decided that going directly to the consumer on our own through ALTBalaji was the right step forward,” says Kapoor. “It’s sort of a dream come true for me and I am feeling liberated as I can select my themes and don’t have to be dictated in making content for the homogenous television viewer.”

Nearly a year down the road, Kapoor is hoping to claw her way back to the top with the digital project. She’s banking on the fact that ALTBalaji is the country’s first large OTT platform with only original content tailormade for Indian audiences. Many others rely on their global or legacy content to attract customers. The other advantage is that Balaji now has intellectual property rights to the shows on its subscription-based app—the rights for its past television shows are with broadcasters like Star TV and Colors, and thus are available on their OTT platforms. Today, even if Amazon commissions serials for Prime Video, producers retain intellectual property rights, which then provide them an income in the future .

The gamble seems to be paying off: ALTBalaji was among 2017’s top four most downloaded new apps on Google Play, the Android app store. And at last count the company said it had a million unique subscribers under its belt. At just Rs 300 for an annual subscription, obviously it’s too early for ALTBalaji to be making a profit yet. ALT Digital Media Entertainment—the entity that owns ALTBalaji—reported a revenue of Rs 1.1 crore in the third quarter of FY18, a marginal drop from Rs 1.2 crore in the preceding quarter, while operating losses stood at Rs 20.9 crore. But the industry is confident. “Ekta’s ALTBalaji is a good idea and should work because there is no local language original content for the burgeoning mobile users. If there is someone who can pull it off, it’s got to be Ekta,” says Jyoti Deshpande, CEO of production company Eros International, who will move to head the media and entertainment business of Reliance Industries.

Kapoor isn’t one to leave things to chance. A deeply religious woman, she often visits temples before a big release and even walked several kilometres to Mumbai’s Siddhivinayak Temple last year for the success of a show. According to employees who have worked with her, she visits temples and religious towns, and uses stories from these trips in her shows. Her visits also help her understand the hopes, aspirations, and fears of people which she then uses to make her stories resonate with society. But it’s a crowded market out there and ALTBalaji might need more than just divine help. Her competitors like Star, which owns Hotstar, and Zee have much deeper pockets, and digital players like Amazon and Netflix are in a different financial league altogether.

But ALTBalaji is unfazed by the competition: It has released 13 original shows, 10 of them in Hindi, and it hopes to end the year with 20 to 25 shows. The lineup of programmes includes horror show Ragini MMS Returns and the military-themed Test Case, which tells the story of a fictional female combat officer. But one of its biggest projects is Bose Dead/Alive, a nine-part series on Subhas Chandra Bose starring fast-rising Bollywood actor Rajkummar Rao. ALTBalaji took over two years to research the subject and shot the episodes over three months, spending nearly as much as a feature film. “Bose is very important to us. With it we highlight that we are willing to stake all our might behind making exclusive shows for the digital medium,” says Kapoor. Adds Rajkummar Rao: “I choose to work on the project for two reasons: the digital medium is the future and you can expect nothing short of the best when someone like Ekta Kapoor decides to work in the medium.”

ALTBalaji’s plans are long-term. It is aiming for 7.5 to 8 million subscribers at Rs 30 to Rs 35 per month over the next three years. “In the first year, we will focus on putting out more quality content and increasing the number of shows rather than push for subscriber acquisition,” says Nachiket Pantvaidya, CEO of ALTBalaji.

Perhaps ALTBalaji can afford to wait to turn a profit. Last July, Mukesh Ambani’s Reliance Industries invested Rs 413 crore for a 24.9% stake in Balaji Telefilms, funds that helped Kapoor step on the gas for her digital venture. Earlier, she didn’t have the monetary flexibility to commit big money to creating digital content after Balaji Telefilms posted a consolidated loss after tax of nearly Rs 30 crore in the year ended March 2017, largely due to the underperforming movie business. Movies like Great Grand Masti and Kya Kool Hain Hum were flops and even the critically-acclaimed Udta Punjab, on the controversial subject of drug abuse in Punjab, didn’t make much money. To be clear, its standalone profit—a reflection of Balaji’s TV business—was a healthy Rs 31 crore after tax.

The timing of kapoor’s entry into the digital space couldn’t have been better. The war for digital content is heating up as video-streaming services join hands with telecom companies to rope in more subscribers. Airtel has a string of content deals with the likes of Hotstar, Amazon Prime, Eros Now, and SonyLIV. Vodafone offers various data packages in India that bundle a Netflix subscription with them. ALTBalaji has also clambered aboard the bandwagon by tying up with major telecom players such as Airtel, Vodafone, and Reliance Jio so their subscribers are able to access its content for free. The deal is a win-win: Data consumption for telecom companies goes up as customers access more video and the audience for content firms increases dramatically. “The telecom provider becomes the catalyst for customer acquisition for us while for them our content helps in data consumption,” says Manav Sethi, marketing head of ALTBalaji.

Kapoor says the deal with telecom companies will not only allow her to retain the intellectual property rights to her shows but will also provide data on how subscribers view her content. The data will help her understand the demographics of her viewers better so she can create content tailored for a targeted audience. Until now, she had to adapt her stories so they appealed to the largest common denominator—or some 100 million viewers in cable homes. But the digital medium allows her to push the envelope. “I can now create newer silos within the established audience for crime, sex or violence, all of which was taboo in the television drama for the mass audience,” she says .

ALTBalaji is staring at a potentially massive audience with Indians increasingly turning from television to the Internet on their phones and computers to watch films and other shows. India has an estimated 300 million to 400 million smartphone users and the number is expected to top 500 million this year. Thanks to Jio, data rates have fallen from Rs 250 per GB 18 months ago to Rs 10 per GB, and Internet speeds have also increased substantially, making viewing video on phones much easier. “Tectonic shifts are happening in the video-on-demand market and it may well be the next e-commerce-like story in India,” says Vikram Malhotra, CEO of Abundantia Entertainment, a production company that makes content for the likes of Amazon .

At the end of the day, ALTBalaji is banking on its Indian content. When Netflix and Amazon Prime launched in India, both the streaming services replicated their overseas content for Indian audiences. So, Netflix viewers watched successful international shows such as House of Cards while Amazon had its Grand Tour. Even Hotstar relied on global hits such as Game of Thrones to attract viewers. But what Netflix and Amazon did not have was content in local languages that drives television viewership in India.

“It is now a given that Internet audiences are the biggest growth drivers for consumption of video content and that makes it imperative for any player to focus on those users,” says Amit Goenka, CEO of Zee International, the largest domestic broadcasting company. “Just as there is good demand for news in regional languages, we feel that there is going to be a huge draw for regional language entertainment content.” Goenka also heads Zee’s recently-launched OTT platform, Zee5, which plans to have content in 12 Indian languages.

ALTBalaji might have had a headstart on local content, but competition is nipping at its heels. The business models of the streaming services may vary—some rely on subscriptions, others on advertising, and some on a revenue-sharing arrangement—but everybody is putting big bucks in original digital programmes for local viewers. Realising the huge potential in local regional language programming, global giants like Amazon and Netflix are now splurging on edgier content only for Indian audiences. Netflix has partnered with Phantom Films, a production company launched by directors Vikramaditya Motwane and Anurag Kashyap, for its first Indian show: Sacred Games, an underworld thriller with Bollywood actor Saif Ali Khan in the lead. Amazon, according to media reports, has allocated $300 million to produce local content—it kicked off its Indian programmes last year with Inside Edge, a series on a fictional T20 cricket team, and has a lot more in the bag, including the recentlylaunched Breathe starring actor R. Madhavan.

Apart from global players such as Amazon and Netflix, local television networks such as Zee and Star India, and film studios such as Eros International (Eros Now) are also investing in online shows. Competition just got hotter after Reliance Industries picked up a 5% stake in Eros International, and with Eros’s Deshpande moving to Reliance. Of course, Star has the biggest winner of them all in its pocket: It has the television and digital rights for the Indian Premier League, one of the most popular cricket tournaments among Indians. “Right now, there is a surge in demand for local content and everyone wants to churn some. There is a stress on resources too but that will settle down in a couple of years,” says Deshpande.

Kapoor’s plans were set in motion months before Netflix launched in India in January 2016. Balaji’s then CEO, Sameer Nair, hired Sony Entertainment Television’s online business head, Nachiket Pantvaidya, to head Balaji’s new but still unnamed venture. Pantvaidya joined Balaji the same day that Netflix’s services became available in India and was later made the CEO of ALTBalaji. He is now the group chief operating officer of Balaji Telefilms after Nair quit to join as CEO of Applause Entertainment, a firm funded by the Aditya Birla Group’s chairman, Kumar Mangalam Birla, to create content for new audiences.

When ALTBalaji was launched, Pantvaidya started with a clean slate—Kapoor was creating new content for the app and he had to build an audience and convert it into paid subscribers, a trail that they hoped would lead to commercial success. Since the Internet is more democratic than a clutch of cable distributors who hold sway over television viewers, several new players have joined the fray and business models have been tweaked in favour of content producers. But not everybody in the business is so gung-ho about ALTBalaji. “Sameer scripted ALTBalaji and his quitting sent wrong signals to investors. Ekta is not autocratic as she used to be but she must understand that good digital talent is in short supply and her success in the short run will depend on the team she builds,” says a former Balaji Telefilms CEO, who did not want to be identified .

Today, ALTBalaji’s biggest competition is from global giants such as Netflix. And taking them on won’t be easy because they have mega bucks to spend. In January, Netflix broke into the $100 billion valuation club while announced its best ever quarterly result recently. Balaji Telefilms, on the other hand, is way behind with a valuation that has never topped $500 million. The question is: Will Ekta Kapoor’s digital foray help her climb back to the top? It won’t be long before we have an answer.

(The article was originally published in the March 2018 issue of the magazine. )

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