Comments on: Online DVD Rental: Behind the curtains with Madhouse

By: iLeher » Chat with the founder and CEO of Seventymm Catching the Internet Wave in India

Sun, 22 Apr 2007 05:22:46 +0000

[...] Bollywood is big. It produces more movies than Hollywood. It sells more tickets worldwide compared to Hollywood. It has more more than double the annual growth rate compared to Hollywood. It was only a matter time that someone took notice of this and did an Indian version of Netflix, the online DVD rental service. Well as it turns out, several did. Seventymm is one of the largest and most VC funded players in this space. We profiled another company Madhouse.in few months back on iLeher. There are several others trying to make a mark in this seemingly lucrative space. And just when you thought the market is getting saturated, the Indian behemoth Reliance announced its entry in this space with BigFlicks.com. Did someone say bubble? Well we’ll see who (perhaps there is room for more than one?) emerges out as the winner but the activity in this space is peaking because of combination of several factors including growth in Internet penetration and usage, growth in the installed base of DVD players and burgeoning venture funding scene in India. [...]

By: vijay kurhade

vijay kurhade — Mon, 26 Mar 2007 06:34:26 +0000

as per one concern earlier, production houses will start selling cheaper content, like moserbaer has started selling recorded movie dvd’s for rs 39 & vcds for rs 29 that could be a concern for renta movie kind of services.

By: vijay

vijay — Mon, 29 Jan 2007 17:45:21 +0000

rent-a-movie definitely has a potential as far as tradition of movie watching in india goes.

But going ahead theres a twist in tail here which most of this players should not overlook. with bandwidth prices going down, mobile population and capability going up and a strong multiplex culture coming up, how easy all this ventures will find to break even. Even issue is with target segments here as there behaviour changes very rapidly so do business will have to adjust here.

Few things are required as far as our subcontinet goes with a service like this which definitely has potential.

By: vivek garg

vivek garg — Fri, 26 Jan 2007 00:52:24 +0000

Madhouse did tell us these numbers but we were asked not to disclose them. I will let Ankur answer this if he wants to.

By: alok sharma

alok sharma — Wed, 24 Jan 2007 22:10:57 +0000

Hey,

Any information on the
1. number of customers they already have
2. the rate at which they are adding new customers

I think clarity on the above facts will put certain doubts to rest or may be validate them (as the case may be)

By: Vivek Garg

Vivek Garg — Sat, 20 Jan 2007 19:05:14 +0000

I agree Mahe. Online DVD rental totally fits the Long tail model.

By: mahe

mahe — Fri, 19 Jan 2007 15:30:45 +0000

[People are interested to see recent films than older one...]..Rajan

I beg to differ with rajan on this point..i am an example of a customer who would sit at the neighbourhood dvd store browsing thro that long list of films to pick that one classic hollywood film i last heard of. and this happeded only when my PC graduated from a VCD rom to a DVD rom..i think there would be a lot of people like me who would want to pick an old flick…infact i am waiting for one such online rental service to start in hyderabad..

By: Ankur Agrawal

Ankur Agrawal — Mon, 15 Jan 2007 12:39:16 +0000

Hi Everyone, Thanks for the comments and questions. I think I agree with Vivek’s reasoning.
Here’s our take:
1. On competition from internet downloads (via Torrent or other technologies): We think that internet is an important medium, and we are closely tracking global developments in this space, but we think that it will be at least a few years before movie downloads starts getting enough users. (There will always be some users downloading over the internet, such as in universities, but that number is currently small)We plan on offering content to our users over the platform they want, once the platform matures a little.

2. Our dependence on broadband penetration: Madhouse is actually a movie rental company, not an online movie rental company. We have lots of customers who communicate with us over the phone, not the web. We strongly believe that internet only is not a viable strategy for a business like ours. Therefore internet penetration does not effect us a lot.

3. Selling DVDs. We are looking at multiple ways of reducing cost of content for us, and sales of used DVDs is one option we are considering.

4. Demand skew towards new movies: Yes, new movies have a stronger demand than older ones. Again, we are working on a number of initiatives that help us work with that. A lot of them are operational in nature, and some are strategic. Over time, we have realised that there are some unique aspects of the Indian market structure that help us address this ‘problem’. Of course, those aspects will need to stay confidential

Ankur
(COO, Madhouse)

By: Shashikant

Shashikant — Mon, 15 Jan 2007 11:25:24 +0000

Very detailed analysis of the rental business! But, here is the catch. Moser Baer is planning to sell film DVDs at Rs 34. If they succee, they will effectively wipe out the video rental business.

[Shameless self-promotion]
My post about the same.
[/Shameless self-promotion]

By: DesiPundit » Archives » DVD Rentals

DesiPundit » Archives » DVD Rentals — Sun, 14 Jan 2007 23:08:44 +0000

[...] ileher has an interesting discussion on the DVD rental industry in India with Madhouse as a test case. They are also offering a discount coupon for Madhouse. [...]