Seventymm.com was the first DVD rentals company that recieved million dollar funding in India. It used that funding to acquire a smaller player like madhouse.in mid last year. We also featured an interview with the founder of madhouse post the acquisition. Now even though it might have made that acquisition seventymm.com has hardly spent any amount of it 10 Million $ funding that it raised from VC’s like Matrix, DFJ and eplanet ventures.
Here is what Seventymm chief operating officer Subhanker Sarker has to say on the proposed usage of the funding,“We have raised around $10 million through separate rounds of venture capital funding led by Matrix Partners India, Draper Fisher Jurvetson and ePlanet Ventures. We will be using this capital for movie acquisitions (a rental license arrangement for one, two or three years) and brand building. The fourth quarter of this year will see an investment of Rs 80-100 million in mass media campaigns, which include both online and offline marketing,”
Well though their plans are BIG.. There is something BIG that is competing with them in the same space. Yes im talking about Reliance Entertainments BigFlix.com which recently tied up with NDTV Imagine’s Ramayan. BigFlix itself has taken dual route to this business i.e. dvd rentals and paid online streaming service. Its reported that Reliance ADA will open as many as 500 BigFlix stores by the end of this financial year in around 30 cities apart from franchisee outlets. Reliance World outlets too will house 100 plus BigFlicks stores in the top ten cities. There are plans to tap the overseas market as well.
And its not only Reliance, Nimbus is looking to pump moolah and expand in this market too. Nimbus’ Showtime plans an investment of over Rs 150 crore over the next 3 years. The company plans to open 140 stores in 40 cities in the next one year and hopes to get 500,000-750,000 subscribers in the first year itself! And then there is Moviemart which was earlier present in Delhi and the National Capital Region (NCR), has now launched its services in 300 cities in India and is targetting to reach a customer base of one million in the next five years. Now thats some aggressive plans if you ask me! One f our bloggers has earlier tried to gauge this industry and tried to predict as to what might be its future.
If you ask me Im a little circuspect about this bullishness about dvd rentals. This is because of two reasons one is the audience that is going to be larger is not going to be the home viewing audience by audience on the go! To me entertainment kiosks that let me download movies my pendrive might be a better idea for the future than dvd rentals. Also given the huge infrastrature costs connected with this I hope for these people’s sake this doesn’t meet the fate that most video rentals faced in India. Also one needs to factor in piracy and pirated local players which offer home delivery as well and have little infrastructure costs. In the long run its a very risky business if you ask me! I infact am more upbeat about pay for online streaming and download and mobile videos as and when technology upgrades to support better data transfer and connectivity on mobiles.