Munching homemade snacks, sipping a cuppa and catching a movie with friends or family, all within the comfort of home sweet home, seems like the perfect way to spend a lazy holiday. More so, if your favourite movie is just a click away.
Enter online movie portals, which have been slowly building up a customer base in India. But with broadband penetration still low, these portals have realised the need to reach out to a greater audience. Movies can now be ordered through phone and SMS. Moreover, these portals have decided to venture out of their virtual worlds into the physical space. Now, therefore, if you feel like it, you could just take a stroll to the portal?s outlet near your house and browse through your favourite titles.
Consumers now have options galore, as movie portals are finding it hard to survive by basing their business just on the online model of taking orders. Most of the online portals started at almost the same time, which was about two years ago, with the hope of tapping the flourishing home video market to cater to the middle class.
Says Subhankar Sarkar, COO of Bangalore-based online portal Seventymm, ?The idea germinated when the founder of our organisation Raghav Kher came from the US to India and observed that the home entertainment market in the country is gradually on the rise. This, coupled with the plunge in the prices of DVD players?thus increasing their penetration helped him convert the idea into reality, and Seventymm was born,? while adding, ?in 18 months, we have added more than one million customers each month.?
Meanwhile, the owners of Mumbai-based Clixflix, Glen Concessio and Dale Edwards, started their two-year-old company when they strongly felt the dearth of quality entertainment in the country. And Rahul Mansharmani of Delhi-based portal Moviemart says the idea about the portal is directly borrowed from the online movie portal Netflix of the US.
Says Sarkar, ?There were a lot of need gaps with the small fragmented shops which were selling DVDs at the time we started. This can be captured into three Cs, namely, choice, convenience and community which was lacking in the mom and pop shops,? while adding, ?we introduced these three concepts as we threw piracy away, gave consumers the freedom to watch the movie at leisure with no late fee and strengthened the community factor with reviews, ratings and movie blogs. Now, we also have a plan of setting up an online movie appreciation club.?
The FICCI-PwC report for 2007 has pointed out that there was a major surge in the home-theatre surround-sound systems and plasma televisions due to a boost in purchasing power. There is a significant increase in demand for home video products like DVDs and VCDs.
Also, with big entertainment houses like Nimbus and Reliance Entertainment entering the DVD rental business, it is poised for growth. Nimbus is planning to invest $1.5 billion to create a DVD retail chain by offering over 60,000 movie titles in 56 cities.
While the market for home video is really growing, the penetration level for broadband in India is still not high enough. Realising this, all the major players are now becoming proactive and increasing the points of distribution. The consumer now has an option to call up and place the order or send an SMS to procure the DVDs at home and once in a while browse catalogues and pick up movies from the outlets.Most of the portals work on a membership basis with refundable security deposits?there are offers such as subscription of six DVDs for Rs 400 with two being delivered at one point of time. Also, there are plans like Rs 699 per month for unlimited delivery of DVDs?two delivered at a time. The discounts increase depending on the type of membership. Clearly, the increase in the number of customers will boost the
revenues of these companies.
Says Edwards, ?Only an online model will not work in India. In our case, most of the customers come to the store for the first time and after that keep placing orders through phone.? He believes that their entire handling of the business encompasses four models?store, online, SMS and call. While the older clients prefer calling or visiting the stores, the younger generation is game for online browsing or sending an SMS. Says Mansharamani, ?The response that we got from the online model was pretty disappointing because the majority of the customers are still not computer savvy in India. But now the outlets are getting very good response as there is a major influx of customers.?
Although some of the players are taken up with the retail model, that includes tying up with retail majors, the others are against retail tie-ups. Edwards feels that the movie portal?s connectivity to the market should not be restricted by technology. ?We are in talks with some retail players and are open to options like strategic alliance or providing the logistics to a retail chain,? he says. On the other hand, Moviemart wants to increase the number of titles in standalone stores, but is not looking for tie-ups with any retail chain. ?We are not going to tie up with retail chains because we believe that customers want personalised service, which is better in standalone outlets,? Mansharamani feels.
Meanwhile, though it recently acquired Delhi-based online portal called Madhouse, Seventymm has plans to grow further organically and not through acquisitions. ?The Madhouse acquisition will help us in maintaining a lead in North India. The execution part in our business is really crucial and this acquisition has added the cofounders of Madhouse in our team which will surely strengthen us,? says Sarkar. But he rules out the possibility of growing through acquisitions. ?Our growth will not be through acquisitions as the market is still not mature. It will be an organic growth for us,? he feels.
The future of online portals can be positive only when customers download movies. ?Right now the distribution of DVDs and VCDs is only in physical format. But five years from now, the broadband infrastructure will be compatible and download of movies will be possible.?
Not just increasing the modes of distribution, DVD rental companies are also high on marketing their brands to customers through various innovative means. For Seventymm, it is interactive marketing. Sarkar believes that customer acquisitions can happen anywhere, Clixflix believes in ?subtle marketing?, whereas Moviemart in Delhi thinks that the print ads in local newspapers and email marketing fetch the target group to its stores and site.
