TOUCH FACTOR

New Delhi, Aug. 18: Online DVD rental firms are setting up offline shops to take on neighbourhood video stores.

“Walk-in stores are essential to tap customers who miss the touch and feel of a physical shop and also those who do not have easy access to the Internet,” said Suresh Manssharamani, president of MovieMart. The company has already allocated Rs 50 crore to set up physical shops and for back-end expansion in the next one year.

Similarly, Reliance Anil Dhirubai Ambani Group (R-ADAG) will open as many as 500 BIGFlix stores by the end of this fiscal in around 30 cities, apart from franchisee outlets. Reliance World outlets, too, will house 100 plus BIGFlix stores in the major cities of the country.

To tap NRIs and the large non-Indian consumers of Indian entertainment content, BigFlix also allows users to view movies online or download them for a fee through its broadband service.

Manssharamani also sees tremendous potential in renting out television serials, both Hindi and English, reality shows and short films.

Bangalore-based movie rental firm Seventymm has tied up with Microsoft Xbox to offer console games on rent. It also plans to invest $15 million over five years in the expansion and promotion of its services.

As competition increases with the presence of other movie rental firms such as Clixflix, Cinebox, CineSprite and CatchFlix, the existing players are using service quality to capture the market.

“At MovieMart.com, a subscriber can see all the movie titles available on a particular day and order any title he wants, compared with other rental sites, where DVDs are delivered on the basis of a queue of 10-20 movies that the subscriber needs to create and update on a periodic basis,” Manssharamani said.

The company has 10,000 customers at present and aims to reach one million customers in the next five years.

The burgeoning organised movie rental business is banking on the availability of home video titles and the robust sales of DVD players in the country, analysts said.

According to Ficci-PwC estimates, the home video market is growing at 30 per cent annually and projected to grow 70 per cent over the next five years. The report estimates the installed base of DVD players at about 47.4 million by the end of 2008.

Analysts estimate that in the developed markets such as the US, Canada and the UK, the home video market accounts for nearly 50 per cent of the film business. In India, however, the home video market constitute only 10 per cent of the Rs 7,000-crore film industry’s revenue.