Harry Singh, a self-employed engineer, by his own admission hasn't been near a multiplex for three months now. An ardent fan of Aishwarya Rai, Singh rents his DVDs online from Seventymm (http://seventymm.com): "Having access to an online library means easy access to movie titles that I have always wanted to watch but missed out on."
Singh learnt about online DVD rentals while on a visit to the US. "NetFlix was such a rage among my Indian colleagues who could never find the time or were just too plain lazy to trudge up to the nearest multiplex."
He came back, hunted down Seventymm, which delivers DVDs in the Delhi-NCR region, and rented DVDs that include "English classics and Bollywood masala flicks".
Shailja Baweria, a sales executive, too swears by Madhouse Media, another popular DVD rental portal (http://madhouse.in), "There are no walks to and from the local DVD store, no late fees and no hassles of pirated copies being delivered. And as there are no stores to put a physical limit on the amount of DVDs available, the virtual library offers you a choice of more than 10,000 different titles."
India has approximately 15 million DVD players, expected to reach 50 million by 2010, which translates into a vastly untapped video rental market. Raghav Kher, founder of Seventymm, feels, "Internet-based DVD renting isn't rocket science, but it is one of those great new services that is so convenient, it really adds to people's lives."
Even though Seventymm is one of the larger players in the space, it is yet to break even. Says Kher, "The volumes are dismally low in this business. That's why we are also doing offline customer acquisition and will have a mobile-based customer registration soon." He claims they will have a million customers in the next three years.
Rishi Navani, founding managing director, Matrix Partners India, who joined Seventymm's board when the venture capitalist firm invested $7 million in the start-up, calculates, "Even at an average rental of $5 a month for 40-50 million users, the online market rings in $200 million a month or $2.4 billion a year." Assuming that a name like Seventymm commands a 20 per cent market share, there is good money for the start-up.
The thing patrons seem to like most about DVD rentals is simple management of one's account (straight on the website) and the ease of adding extra titles to the list of DVDs they wish to watch next. Madhouse Media, for instance, sends ready-to-eat popcorn sachets with every DVD delivery to its patrons.
Sameer Guglani, CEO & co-founder, Madhouse, says, "In a market that is expected to touch Rs 2,000 crore by 2010, one has to introduce innovative customer programmes to gain loyalty. From regular newsletters to movie reviews, we hope to retain our customer base."
The Delhi-based online DVD rental company received $228,000 (approximately Rs 1.05 crore) from Band of Angels and Angels of Mumbai, besides a few other private investors. A business which is managed by first-time entrepreneurs Sameer Guglani, Nandini Hirianniah and Ankur Agrawal, it boasts of 15,000 subscribers in the Delhi-NCR, Chandigarh, Panchkula and Mohali areas.
Talking of convenience, renting online is possibly the best option for couch potatoes. Movie titles are home-delivered and collected for free. Managing and scaling the delivery infrastructure is the biggest painpoint for players.
"Instead of having to travel to a rental store, customers are able to peruse DVD selection online and create an ordered list of the films they would like to rent. But if the ordered DVDs don't reach within a stipulated time then customers are bound to be frustrated," reasons Amit Jain, co-founder of CineSprite (http://cinesprite.com), another DVD rental site.
While customers are allowed to keep movies for as long as they wish, maintaining a network of DVDs shipped across and balancing the inventory in the central warehouses of a city is a tough call. Players like Seventymm, Madhouse, Cinesprite and Moviemart (http://moviemart.in) are working to reduce the turnaround time for a customer to receive a new DVD within 4-5 hours in most locations. "If the turnaround time can be cut to five hours, we will be able to capitalise on the frustrations of consumers doing business with bricks-and-mortar video rental stores."
News that sports broadcasting company Nimbus Communications and Reliance Entertainment are entering the DVD rental business has added a spark in this market. Nimbus has plans to deliver DVDs in 30 minutes flat (almost like a pizza delivery!) and is expected to put in around Rs 150 crore.
"Nimbus's plan to offer some 60,000 movie titles pan-India with the help of tools like SMS, phone-ins and the Internet has given sleepless nights to scores of online DVD rental companies that have come up in the recent past," says Jain of CineSprite. But smaller players like Madhouse, adds Guglani, will be happy to integrate their businesses with the bigger ones.
Meanwhile, customers like Baweria and Singh can lie back and enjoy their movies, as the players sweat it out about who has more titles, better deals, better DVD quality, timely deliveries and pickup (quality of service) and better promotional and marketing campaigns.