Zapak recently announced its tie up for movie merchandising with the kiddy movie Hari Puttar which was also in the news for being sued by Harry Porter producers. This isn’t the first time that zapak has got into movie merchandising. Even earlier it had done a similar deal for the movie Bhoothnath for which it sold over 50,000 merchandise packs. Even for Hari Puttar Zapak is selling merchandise packs priced at priced at Rs 149 and Rs 199 and has tied up with 3000 toy and stationery stores in more than 77 cities where all the products will be made available.
We got in touch with Rohit Sharma COO of Zapak Entertainment to better understand how did movie merchandising fit into the overall scheme of things at Zapak. Here is the interview.
Why is Zapak moving offline with movie merchandising as a business? What is the objective there?
Worldwide gaming merchandise contributes significant revenues for Gaming companies especially MMO developers and publishers. Now that we are ready to launch Crazy Kart, our first MMO and also 2-3 title in the next 12 months, we believe that setting up a distribution network for merchandising business will help us capture the entire value chain. That is our key objective of setting up the merchandising distribution network. However with the distribution infrastructure in place (5000 retail outlets in 0ver 50 cities), we are approached by a lot of production houses to create online/offline movie merchandise for them distribute the same. Because our TG is kids and the youth, we feel it fits well with our strategy and takes our brand to the retail level and ready to leverage once we launch our MMO gaming merchandise
What kind of deals and margins are being seen in the movie merchandising and distribution business for zapak?
Distribution and merchandising margins are in line with industry margins
How much % of total revenues does zapak expect to come from these merchandise sale? (going forward next 1 year, 3 years?)
10% in year 1 going upto 15-20% once we launch our MMO’s in the next 3-5 years
You recently started selling disc’s offline for games how has been the response to that?
We have had a tremendous response with the gaming CDs, especially because of our disruptive pricing of 49 Rupees and extremely high quality of games. There is an extremely favourable response from both the trade and the consumers
How much % of total revenues does zapak expect to come from these disc sale? (going forward next 1 year, 3 years?)
The percentage that I mentioned above includes cumulative percentage share for both movie merchandise and gaming CDs. For us it is one business line
What is the current break up of the revenue at Zapak.com (Ads vs Downloads)?
Right now is primarily ad supported. We will start getting subscription/transaction revenues once we launch our MMOs.
Are you seeing any interesting trend in the user behaviour at Zapak?
With over 5 million registered users on our site, we are seeing a trend of increase in repeat visitors on our site. Although we add almost 8-10K new users everyday, we are able to attract our existing users to come to back to us. This is primarily because of fresh and high quality gaming content
Another major trend is that although our core TG is the age group of 12-25. We are seeing an increase in the number of users in the age group of 6-12. The kids segment contributes almost 25% of our audience today.
The third trend is that with the launch of Zapakgirls a dedicated gaming site for girls with over 200 games, we have now almost 18% of our users as girls.
PS: We had also done a Video interview with Rohit on WATShow a while back. The same can be viewed here>>
