Many more Bollywood movies are coming to a computer near you—as long as you are outside India.
Seventymm Services Pvt. Ltd, a start-up that runs the mail-order Web movie portal, Seventymm.com, became the latest one to announce its online video-on-demand (VOD) service, joining an already crowded field of players in a relatively nascent industry.
Other such service providers include Rajshri Productions Pvt. Ltd’s Rajshri.com, Eros International Plc.’s Bondemand.com, Live Asia TV-promoted WatchIndia.TV, Anil Ambani’s Reliance Entertainment Pvt. Ltd’s Bigflicks.com and Tinselvision.com from Tinsel Cinema Llc.
“Digital downloads (are) the future of movie watching and we would like to get started in the West, where there is both technology capability and demand for Indian content,” says Subhanker Sarker, chief operating officer, Seventymm.
A Hindi movie theatre ticket costs about $20 (Rs792) in the US. In comparison, online VOD titles are priced between Rs100 and Rs600 for every download, depending on the film and demand
Currently estimated at $200 million (Rs792 crore) in annual revenues, the total overseas market for Indian entertainment content, including music, television and Bollywood movies, primarily comes from about 20 million so-called non-resident Indians, or NRIs.
They now account for roughly one-fifth of all the revenues for any major Hindi film release, claims a recent report by industry body Federation of Indian?Chambers?of?Commerce and Industry (Ficci) and consultant Ernst and Young (E&Y).
“Although there are certain Indian channels available on television for NRIs, they still usually get to watch television episodes, which are outdated. And DVDs bought from Indian stores are usually pirated prints,” notes Smita Jha, a principal consultant with PricewaterhouseCoopers (PwC). “Online VOD services will make it easier for the overseas market to access latest releases and shows.”
NRIs are also willing to pay a higher price for Indian content, points out the Ficci-E&Y report. A Hindi movie theatre ticket comes for about $20 in the US, while subscription to an Indian channel, such as Zee Network, costs about $25. In comparison, online VOD titles are priced between Rs100 and Rs600 for every download, depending on the film and demand.
The response to online VOD has been encouraging so far, the companies claim.
Bigflicks, launched in September with plans to invest $100 million over three years, claims it has crossed 10,000 film downloads in about two months. The company now has tie-ups with more than 30 production houses, with which it has a 25-40% revenue-sharing arrangement.
“It’s a huge opportunity to reach out to the Indians scattered all over the world,” says Kamal Gianchandani, the firm’s chief operating officer.
Rajshri.com says it gets 1.75 million unique visitors every month, 85% of them from abroad. This traffic is growing at 18%, and the company claims that the site already serves one million hours of video and 15 million video streams in a month. “Our business plan is to be a $100 million company in the next five years, and our performance this first year has already put us ahead of our expectations,” says Rajjat Barjatya, managing director, Rajshri Media.
Even the three-week-old TinselVision says it is optimistic about returns on its $6 million investment. “We have already formed partnerships with Shemaroo, Zee Network, Yash Raj Films, B4U, Zoom and Star,” says Saad Shervani, a vice-president at TinselVision. “Advertisers have also shown tremendous interest and we have companies, such as Simplymarry.com, ICICI Bank, Vodafone and Peugeot, as advertisers.”
Online advertisements are also a critical source of revenue for VOD service providers. “We have noticed that 75% of our hits are going into the free content sections, which is (also) attracting advertisers,” says Shervani.
Rajshri says it has tied up with six ad agencies and networks in the US. “We charge anywhere between Rs100 for banner ads and Rs950 for video ads,” says Barjatya.
All VOD players are lining up aggressive marketing plans.
“Marketing is extremely crucial right now, as even the oldest player has been around for only 14 months,” says Shervani. TinselVision says it has set aside $1 million for marketing activities in the first year. Besides ad spots on South Asian TV channels in the US, the UK and Canada, and in “ethnic” newspapers, the company has also tied up with Patel Brothers, a leading grocery chain to promote its service.
Rajshri, too, is busy rolling out a new campaign in the next three months. “We have been focused on revamping some of our content, but now, the time for marketing the service is right,” says Barjatya.
“As more players enter this space, it is important for companies to package their service right, offer a large variety of content and provide the right technology so that users don’t face any problems experiencing the service,” says PwC’s Jha. “If it fares well in the overseas markets, it will catch up in India too, when technology permits.”
A study by industry body Confederation of Indian Industry and management consulting firm AT Kearney Ltd showed that film-related content did not feature in the Top 5 of the list of content accessed by people in India from the Internet, in part because of limited penetration of high-speed Internet within the country.
But most online VOD players are looking at India, too, eventually.
Seventymm’s Sarker believes that in the next five years, entertainment will be viewed differently in the country, saying: “It’s technology that’s holding us (up).”