Moser Baer To Form Moser Baer Entertainment As A Separate Company: A Closer Look
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In a wonderful example of corporate diversification, Moser Baer has announced the hiving off of it entertainment division as a separate company, pending shareholders; approval, reports Business Standard. The company will initially be valued at Rs.250 crores.
New Delhi based Moser Baer has been a world leader in optical storages. OK, that’s CDs, in simple terms. On one of my trips to Delhi, I had met an employee of Moser Baer once who had shed light on some of the aspects of how the company works. Although, being a hardware company, the policies and processes that he described made me think, Moser Baer deserves a lot more attention (press) than it actually gets. A few months later, it delved into film DVDs and VCDs distribution. Priced at Rs.34/-, the DVDs by Moser Baer were the cheapest in the country by a mammoth margin (A DVD of Krrish was priced at Rs.700 then ). So, all the issues related to the company not getting enough footage got addressed, as almost all the national media covered Moser Baer. That was in 2006.
Though, they have been increasing the price of DVDs every few months and the titles that you usually find in there are not always the blockbusters (barring a few ones, that they heavily advertise), Moser Baer has been bullish on its plans. The idea is to achieve scale. Given India, scale means billion. Contrary to what many industry-experts felt, Moser Baer achieved break even in less than 12 months. And since then they have been driving up the volume to maximize the revenues. Reportedly, the revenue for the fourth quarter of FY’08 (ending March ‘08) was Rs.42 crores ($ 10 million).
Earlier this year, I noticed the name of Moser Baer on the posters of Rahul Bose starrer “Shaurya“. Yes, Moser Baer had entered the film production. Being an ardent movie-buff, and a tech-business follower, I was excited to see this entry. Specially because film making is a very different business from CD manufacturing. In fact, altogether different. Although, its past experience with distributing the low cost DVDs gives it the experience in distribution that might help it to make money.
Apart from the DVD distribution, the company is also getting into theatrical distribution. It distributed the animated movie Airbuddies and has secured the distribution rights to a few other films. On the production side, the company is producing five Tamil movies already. The step to go regional is an intelligent one. Since to achieve scale, it would be required to reach to the different regions. Now, with its distribution mechanism already in place (via DVDs), the company won’t have much difficulty placing their content (movies it produce) into the hands of thousands of Indians.
Moser Baer is adapting sooner than its competitors. Not only that, it’s branching off into various domains. The beauty is, how well it is leveraging its strength in its areas to these new frontiers. So, using its expertise in DVD production and distribution, it got into films-DVDs distribution. And then, building on the strength of DVD-films distribution it got into theatrical distribution and film production.
I am all for diversification. I have always been. I will be watching the progress of Moser Baer keenly. I hope they taste success with the films they make. Being an avid cinema goer, I know I need a lot more movies than the ones that are already being made.
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