India’s DVD business blooming

Moser Baer paving new Bollywood market

Until recently, Moser Baer mostly operated under the showbiz radar as the world’s second-largest manufacturer of optical storage media (CDs, DVDs etc.). But barely two years after entering the entertainment business, the New Delhi-based outfit is fast becoming one of the most significant players in the Indian film biz.

Company has already revolutionized the video biz in the country and April 4 saw the release of “Shaurya,” the first Hindi-language title from its inhouse production unit.

Its DVD strategy is to acquire rights to as many Indian films as possible and sell them quickly at the almost unheard-of price of 30 rupees-40 rupees (approx 75¢-$1) per disc. 

“I’d rather make 10 cents on a film that sells 1 million copies, than 25% on a video at $8-$10 that only sells 10,000 copies,” says Moser Baer CEO Harish Dayani.

The low price is important, as it brings DVD purchases within reach of most Indians, and is closer to the prices paid for cinema tickets in smaller towns and rural areas. In urban areas, DVDs compare favorably with the $3-$4 ticket price at multiplexes.

Significantly too, the Moser Baer price is at or below that of pirate operators. “Let the pirates do their business, and leave me to do mine,” Dayani says. That sanguine view is possibly one that only a disc manufacturer could achieve — after all, even DVD pirates have to buy blank discs.

Doing business with all the major rights owners, Moser Baer quickly grew to dominate the Indian DVD biz, and now commands some 60% of a sharply expanded market. Its catalog of video rights exceeds 3,000 titles, and Dayani hopes to build it far higher.

At last month’s Ficci-Frames convention in Mumbai, the company’s success with one movie, romancer “Jab We Met,” was hailed by both Ministry of Information and Broadcasting secretary Asha Swarup and Sony Entertainment Television prexy Kunal Dasgupta, who described the release as “paradigm changing.”

Within a week of its theatrical outing in late October, Moser Baer began the video release and went on to sell 8 million legal copies, seemingly without detracting from the pic’s boffo hardtop run.

“The best way of tackling piracy is by managing the supply side so that the incentive for piracy is lost,” Swarup says. By releasing quickly in India’s smaller cities and getting discs out wide, legitimate distribution soaked up nationwide demand.

The company’s strategy also includes deliberately collapsing release windows and leveraging a nationwide network of several hundred retail outlets.

“A Hindi film typically does 60% of its theatrical business in the first week, 30% in the second, the third week 10% or less, which means nobody is unhappy about letting us get the DVD out,” says chief operating officer G. Dhananjayan. “For regional-language films the window is now six months. We’ve compressed it from three years.”

Dayani says he is surprised that the quick, wide, cheap releasing route has not been adopted by other companies. “I don’t think they truly believe in the purchasing power of 1 billion people. We do.”

Company is now powering up its own production line as a strategy to lock in content. “If we need 25 big films a year, then by producing seven or so, we only have to go out and buy 18,” says Dhananjayan, who thinks the Indian theatrical market is still seriously underserved. He puts the number of economically viable consumers in the country at 600 million and calculates that if a hit film attracts 10% of them, the benchmark should be a gross of $60 million.

Currently nothing comes close to that. “Jab We Met” did a powerful $9 million, while this year’s hit “Jodhaa Akbar” has done $19 million.

Company has greenlit four Hindi films and six in Tamil and Telugu, making 10 to date with a combined production budget of $15 million. It released Tamil-language “Vellithirai” in early March, and this week feels its way into the dominant Hindi arena with “Shaurya.”

Produced on a $1.25 million budget, pic is a courtroom drama about one man’s determination to push through the trial of a murder committed by a minister’s son and covered up by the ruling establishment — not exactly a mainstream Bollywood subject although suspiciously close to real-life events.

“(Production) execution is not the problem. In India, there are lots of people, many well trained. Marketing is (Moser Baer’s) strength. What is tough is getting the concept right,” says Dhananjayan, which is why Indian filmmakers have in the past often been accused of blatantly copying films from elsewhere.

“Shaurya” goes theatrically with a cautious, mid-sized 200 prints release. Distribution is through exhibitor-distrib PVR in Hindi regions and through local indies for hire in other areas.

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