For over six decades, Senthil Kumar’s family has been in the movie business, producing Tamil films under the AVM Studios banner. It is a lineage to which Kumar, a computer science engineer, first added a digital edge.
Real Image Media Technologies, a company that Kumar launched in 2002, transmits digitized movies to over 300 theatres in the US, Europe and India with plans to increase the network to 1,000 theatres by the year-end.
To this digital cinema platform, built around a proprietary technology that Chennai-based Real Image calls ‘Qube’, Kumar is now adding an advertising overlay.
Theatre screens that have installed the QubeXP server can now receive real-time cinema advertisements that are highly localized and can be aimed at specific audiences. The service—branded QubeCast—allows advertisers to book their slots and provide content to a centralized server that then beams it via satellite to theatres.
For instance, a storeowner in a mall, who is keen to run a product-launch promotion on multiplex screens in the mall, can use QubeCast to reach his audience in less than half an hour. Such nifty features, Real Image hopes, will help it differentiate its offering from the more than half-a-dozen players in the digital cinema space in India.
New Delhi’s UFO Moviez, a part of tyre-maker Apollo International, supplies digital content to over 600 screens with plans to take the number to 3,000 by 2008. Other peers include Pyramid Saimira, Reliance Adlabs and PVR Ltd.
Such advertising revenues, Real Image hopes will help attract venture capital firms in a second funding round it goes into in the coming months. The financing it receives will partly fund the equipment— costing between Rs12 lakh and Rs40 lakh—theatre owners have to install to connect to the QubeCast service and, therefore, have been reluctant to spend money on.
“Third-party financing that will help theatre owners upgrade technology is necessary to break this deadlock,” says Kumar. Real Image has so far raised an undisclosed amount in funding from three venture capital firms—Street Edge Ventures, ICF Novastar International and Intel Capital.
Real Image’s core offering still remains QubeCinema. The platform developed by Real Image can master or transform films shot in the traditional analog format into digital content that is later distributed to cinema screens in disk format.
“The benefits of digital cinema such as reduced piracy and more efficient distribution typically flows to producers, while theatre owners pay for the cost of technology upgradation,” says Kumar. In return, a digital print typically costs 15% less than a traditional film print.
“By building a market for QubeCinema, they have laid the pipelines, now there is a captive audience that advertisers will pay to reach through QubeCast,” says Vijay Angadi, managing director, ICF and Novastar International Funds, which invested early in the Chennai company. “As advertisers seek to go local, out-of-home options like in-cinema will emerge as the medium of choice.”
In-cinema advertisements considered a part of the fast growing out-of-home advertising space, is valued at Rs200 crore in India and about $400 million (Rs840 crore) in the US.
QubeCast is expected to tie in with other products in Real Image’s portfolio such as its digital signage product Qsign as well as a music jukebox QJam, a smart digital jukebox, that offers local event and promotion on kiosks at public spaces such as coffee shops with the focus being highly targeted local advertisement content.
With customers such as E-city, a part of the Subhash Chandra-led Zee group, RedeCine in Portugal, Landmark Theaters in the US, Real Image is looking to expand its footprint. “By the end of March 2008, we aim to have revenues of Rs100 crore,” says Kumar.