Wednesday, March 14, 2007


So, I went for dinner at Bulu’s place. Bulu is one of those creative guys who don’t blog. He gives a simple explanation for not blogging, “I don’t have enough time to think, write and fill my web dairy.” Well buddy, do you read any blog? “Yes, reading is my source of inspiration.” Fair enough. Then we started discussing boring stuff like work, latest scandal in his agency etc, when suddenly Bulu’s four year old daughter Sonia came running inside “Papa I want to watch Finding Nemo.”

Bulu picked up his phone called someone and order the DVD, turned back at young Sonia and said, “It’ll be there tomorrow morning, you can watch it once you’re back from school.”

Bulu used an offline method to hire a DVD from an Online DVD Rental company. The concept of Online DVD rental is not a new concept. A new category in India though, which is gaining popularity. Netflix, Blockbuster, Lovefilm, Quickflix are some of the popular Online DVD Rental brands in US/UK/Australia. In India, VC’s and Angel Investors found Online DVD Rental a lucrative business to bank upon. Madhouse, SeventyMM, Catchflix, Cinesprite, Moviemart are few such companies to open shop in India. They follow the same business model - Get online, fill registration form and pay a fee, decide a plan and select your movie. Most of them are regional players and unlike the west they don’t use postal service for logistics. However the good point is that you can call, send SMS or queue your list in the website for the DVD's to be delivered.

Common brand proposition – India’s first online DVD rental company + No Late Fee + Free home delivery + largest collection

If you put together all of them, their customer base adds up to a million approximately. Given that India’s favorite pastime is watching television and cinema, the number seems insignificant.

I found few basic challenges that these companies need to overcome soon. A quick look at the movie list and you’ll find the same old movies enlisted on every website. No major differentiation in offering. Movie channels air the same movies and even show new releases then why do I subscribe you? To watch movies at my own convenient time. Not a strong enough reason. As a customer if I want to watch a French or a Japanese movie, what do I do?

Logistics is a big issue. They are unable to deliver on time therefore cannot reach smaller towns. Ultimately end up making big promises and a growing list of unsatisfied customers. Another issue is the penetration of Broadband on optical cable backbone with set-top-box. As they gain momentum, services like video on demand, pay per view will pose a severe threat.

No proper customer segmentation based on age, individual viewing or family viewing, what genres of movie does a person like, customer recommendation etc. Atleast this would have given them a fair amount of knowledge and insight about their own customers.

Lastly, internet penetration in India is low. Therefore as a company you limit yourself to a set of niche audience from the very beginning. And honestly this internet savvy audience is in no mood to watch ‘Mard’ or ‘Dil Main Dard’ ordering from the net.

So what do Online DVD Rental companies do to secure a bigger pie of the Indian market? Here’s my take on how these companies should do marketing:

We are infested with tens of thousands of neighborhood CD Shops serving us pirated VCD/DVD’s. A great opportunity lies in bringing them under your fold. How? A more effective online-offline business model.

  • Create a franchisee business model. These stand alone neighborhood shops will be more than willing to be a part of brand and instantly give you a multi city presence (Also save you the cost of setting up several warehouses)
  • Create brand retail outlets. Ask them to junk all pirated VCD/DVD’s and you provide them with original copyright legal versions. (Use PR effectively and ensure that people are aware you care hence serve the best)
  • Create a call center and your brand shop is the delivery point (aka a Pizza Corner)

Once you put in place these basic infrastructures, you’re ready for marketing 2.0.

  • Tie up with LG, Philips, Samsung, Videocon, Onida and Sony Home Theatre Systems for one year free subscription with every purchase
  • Remember what Reliance Communication did? Handset + Subscription @ Rs. 501/-. To penetrate in smaller towns offer a DVD Player free with two years of subscription. Buy DVD players in bulk from a manufacturer, brand it and sell it along with your subscription. It allows you to enter Non-DVD player owning households immediately. You reach to a larger audience
  • Exchange scheme – Pay for a year's subscription and bring along your old VHS Player, walk out with a brand new DVD Player
  • Since computers are also touting themselves as a complete home entertainment device, tie up with HP, Compaq, Zenith, Acer, Lenovo to increase your subscription.
  • Tie-up with Filmfare magazine and create a Filmfare Award Winning Collection. One years subscription of Filmfare gets you a Online DVD rental subscription or vice versa

Once you’re ready with your marketing 2.0 effort, it’s time for revenue generation 2.0

  • Producers are spending a fortune on advertising their movies in different media. Use your website for advertising these flicks. Make money
  • Use your DVD jacket/DVD envelope for advertising. Make money
  • Use your brand shops for advertising. Make money
  • Use your movie catalogue for advertising. Make money

Now that you’ve made money and I dare say lots of them, use your brain and start segmenting your customers based on genres and likings and make an enviable list of movies. Include world cinema, foreign movies etc. a collection that will draw customers to you by itself.

Before I end, if you think these are difficult ideas to execute, the easiest solution will be to hire me as a consultant. Will someone please write back to me on this soon?

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1 comment:

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