I spent some time thinking about the movies-on-demand & DVD rental industry in the last few days and the opportunities / challenges / market size for the same. There has been a lot of buzz recently in the DVD rental industry because of emergence of more than a few companies serving the said market. I had profiled CineSprite, an online DVD rental company, a while back and the comments had interesting information on the other players; this post will try to look at the opportunities in this industry on a whole and these companies in particular. 

Traditionally the needs for on-demand movies have been fulfilled by the local DVD rental shops and they have been very generous with the rental rates, courtesy piracy - the first and the biggest challenge for any authentic entertainment business in this industry. These are small-time, unorganized businessmen - and being able to afford large inventory is a perennial problem for them. Companies like Cinesprite, SeventyMM, Madhouse, Catchflix promised to solve that problem by building organized, well-run companies specializing in DVD rentals with an eye on the national market. IPTV and movies-on-demand served over internet by companies like Rajshri offers yet another lucrative option to the consumers. In order to better understand the opportunities - I posed the following questions to Cinesprite (Amit), Catchflix (Vinay) and Madhouse (Nandini).

 

Q: Who are your biggest competitors - other DVD rental companies / local DVD rental shops, etc? And what are your thoughts on why you are best suited to address the market?

 

Cinesprite: We are here to serve the needs of a different set of people, the upwardly mobile corporate executives and their family. These are the same set of people who earlier used to rent movies from a local store but are not able to do so now because of their busy schedules. We are trying to close the gap that this set of customers feel (at a conscious or a sub-conscious level they feel this way) – the key ones being unavailability of time to visit local stores to rent or return movies thus paying late return charges, they are more individualistic and want variety in their choice or rentals. Thus we don’t see ourselves in competition to local stores as both are serving different needs.

As far as other online rental companies are concerned, the market is large enough to have any direct market share competition.

 

Catchflix: Currently, it is a fragmented market to competitors are a mix of high-end movie rental stores, small neighborhood, pirated DVD sellers, and online rental service providers like Seventymm. Here is why we are best suited:

Transactional Pricing: Unlike subscription-based DVD rental models, Catchflix offers a transaction-based rental service (Rs. 99 for 1 DVD, Rs. 149 for 2 DVDs, Rs. 189 for 3 DVDs). Members can keep the DVDs for three days, with free delivery and pickup. There is no monthly commitment.

Next Day Delivery: We promise next day delivery and we also give members the option to choose the delivery date. In the case of other services, members create a queue of movies and just wait for them not knowing when they will get what.

No Membership Fee or Deposits: Catchflix does not charge any membership fee or security deposit which sets it apart from the other service providers. Our members are mostly urban professionals who are responsible folks. Hefty security deposit is a way of making everyone pay for carelessness of a few and puts off movie aficionados. 

Website and Service Quality: Our members also find our website very rich and user-friendly and our service very prompt.

 

Madhouse:  Let me answer the latter first, Our USP: Madhouse provides the convenience of multi-touch point interaction to its customers. Madhouse is not an ‘online only’ rental site. Madhouse’s rental service is available for members / customers via web, phone, SMS and physical touch points.

Madhouse offers Monthly Subscription Plans and Individual Movie Packs (pay as you go) providing a wider choice for customers.

Madhouse does not charge a one time registration fee and has affordable pricing for its plans and packs, with nominal refundable security deposits.

The movie rental space is getting all the prime attention, currently. On one side are the organized players, of whom most or all of them are online rental stores, on the other are the local video libraries, who are either illegal entities or have limited inventory. Both of them poise challenges, but it is too soon to say who the biggest competitor is.

 

Other questions answered by the companies in the PDF file here.

I will not go into the comparison as to which is better since I don’t have a strong opinion but, I am sure, a lot of readers would. From the response of the companies above, it does look that they strongly believe in the fact that the market is big enough and it’s the right approach to serve the market. Given the fact that these companies are targeting high-income society who already have access to high speed internet connection, I feel that their biggest competitor would be IPTV and movies-on-demand programs launched by companies like Rajshri (they plan to have the premiere of Vivah, their latest movie, on http://www.rajshri.com) and not local DVD rental shops. Ajay has come up with an excellent post on Indian Netflixes - will they work? He is very apprehensive about this industry and ends his post with “Enuff said to scare away the any entreprenuer even remotely willing to think about DVD rental as a viable business plan. I wish I am wrong, and this can really become a good business and many of these guys have good exits.“.

My take on the entire thing and the Indian opportunity is the following:

• I see the DVD rental business, in its current model, as being able to attract attention for at least next 3-4 years (provided the investors are willing to keep pumping money), after which the speed / availability of the broadband connection will become a big barrier for these businesses.
• The low-income society aren’t that fashionable in requesting “I want to see the episode 15 of Friends from Season 2″. Their choice is limited to watching the more recent movies and the cheap pirated DVDs from the local DVD shop will work for them (unless we can control piracy - I, honestly, am not so hopeful).
• It will, eventually, be the game of content - when it comes to targeting the high-income society. Getting high-quality content will be much more affordable and easy-to-deliver in the digital format in the long run - which proves advantageous to IPTVs and on-demand movie portals.
• I see all these companies changing / tweaking their business model in the next few years. One model could be to start auctioning the DVDs once it becomes a little old and the normal requirement becomes substantially lower than peak requirement. There could be many more such models, that I am sure these guys can come up with.
• A positive thing is that it will still be 3-4 years before the Indian Netflixes start facing that problem and if one plays the game well, they should have gotten a critical mass of paying customers. Even if I have 100,000 regular paying Indian customers (is that a very bad guess?), I can do many more interesting things with it.

Again, I just wanted to reiterate my belief that a business model that became successful in the US will mostly not become successful in India, as is - with the exact same business model. Tweaking it just a little can yield amazing results.

Promotions: (All 3 companies have given their promo-code, feel free to choose your favorite one)

1. Cinesprite gave me a promotion code that gives 15% discount to the first 50 rental subscriptions signed up through this blog. This offer is valid for signups till Nov 25th, 2006 - so feel free to avail it.
   Promo Code: LATESTININDIA
2. Madhouse Signup to avail a 10% discount on the first month rental or the first movie pack.
   Promo Code: latestinindia
3. Catchflix Signup to get Rs. 50 off on your first movie rental. That means just Rs. 49 for a DVD for 3 days with free delivery and pickup.
   Promo Code: latestinindia.

Something that I am not a big fan of is the attitude of businesses believing in CYA (Covering Your Ass) before giving something new to the users. There are many examples of the same - Travel portals (Yatra, ClearTrip, MakeMyTrip, TravelGuru, …) and Social Networks (Jhoom, Minglebox, Yaari) have done that - where they are, practically, building the exact same thing. Everybody claims that they have a different way of approaching the problem but they will do so AFTER they are done with doing what others have done. Though I do understand the reasons for the same and realize that it’s important to ensure the survival of a business before being adventurous, it doesn’t necessarily translate to me liking the approach. Not to forget mentioning that most of these companies either run out of cash or the business model changes by the time they are done ‘perfecting’ the existing solution.

Lately I spent a bit of time looking at the indian job portals and the trend continues there. Naukri and MonsterIndia continue to lead the race and the argument on who is bigger doesn’t cease to stop. My personal experience says that there is little to choose between them and we have an account with both these providers (that I am dying to get rid of as soon as other providers match up in the resume count). Both Naukri and Monster work decently well for people at entry and junior level but the job consultants still work better for senior level people. There are other job portals like JobsAhead (acquired by Monster), TimesJobs, CareerIndia, ClickJobs, etc which are also trying to have a piece of pie (which is substantially big). ClickJobs impresses the most because of its user-interface, some premium services and customer-focus.

Job board is another way the companies in the US have targeted the market, specifically for a niche segment. 37Signals and GigaOm have that offering in the US and the similar stuff has been provided in India by JobMilan (I am sure there are others also but I am just not aware).

Yet another site that I want to mention here is CampusChai which is operating in the same space but claims to be focusing more on the college campus placements than the general job search.

First impression: I was pretty excited after reading the byline but the first page disappointed a bit. The employer registration didn’t work for a long time - the AJAX call was made displaying the status but the page did nothing more for the first couple of minutes. The site, in general, has a clean interface which is very encouraging and shows signs that the stress will be laid on the usability and not the plethora of features (hats off, if you can keep it that way).

When I signed-in to the site as an employer, this is the screen I saw:

The site has a pretty good use of AJAX which makes it highly interactive and responsive. I liked the usability aspects of the site which tells me that the implementation team has done a pretty good job. What I didn’t like is the fact that even though they want to specialize in providing tools for managing campus placements easier (that also is a tough job because of the education needed for the college placement officers - who, in my opinion, will not be too easy to convince), they started with being yet another job portal. Of course, the number of resumes is also very limited currently which doesn’t make it really valuable currently. And the dynamic display of jobs in the front page can be done away with - it’s distracting to say the least (changing the job on page-refresh is ok, abusing AJAX is not).  It’s early days but I see some good signs there - like they have a blog at http://campuschai.wordpress.com. My recommendation: Come on guys, you need to live up to the reputation of ‘Campus Recruitment done better‘, as claimed in your byline. Leave the act of following to the big guys - you can’t beat them with the unchanged rules. Change the rules - that is your best bet to win it!

Oh, and as is the trend these days, they also have a promotion which gives you a PS2 if you are the one who finish the contest with the maximum number of points. I am a loyal customer of Microsoft and don’t want PS2 - do I have a choice?

The Indian Internet space witnessed a lot of activity in the Travel domain a few months back when as many as 5 companies got funded with almost identical services (and some more which are not funded). Now, more recently, it’s the social networks that has started to see similar activity (though not yet there). Social Networking sites have been made popular by MySpace, Facebook, Orkut, Bebo - that are general purpose social networks and LinkedIn, aSmallWorld as more focused networks targeting specific verticals.

India has typically relied upon global companies for its online needs, other than Shopping, News and now Travel. And the same is true for social networks with probably Orkut being the most widely used site currently. But the last few months have seen more than a few social networks targeting the Indian market entirely and I am going to write my thoughts on those and their pluses and minuses.

By far, Orkut is the most popular social networking site in India right now. It’s difficult to meet any Indian internet user aged below 35 years who hasn’t heard of Orkut and don’t have an account. This is the first social network that I really used because most of my friends were on the site. The beauty of the site lies in its clean and simple interface, even when it lags behind in the features. Scraps, Connections (Friends), Community form the core of the site. People flock to Orkut because it helps them to keep in touch with their friends and finding new friends and dating is just subtle and incidental.

Verdict: Impressed. The challenge in front of them will be to keep the site clean, when the others are adding a lot many features. Of course, they will lose out on the fact that it’s more ‘global’ and not that ‘Indian’. 

Jhoom! is one of the first social software targeting Indian market completely, unlike Orkut. It has most of the features that the popular sites like MySpace has (minus the excessive customizations that MySpace offers). It has blogs, groups, forums, photo albums, blogrolls, polls, avatars, back-of-the-house administration tools and are adding many more features in the coming days.

Pros: Feature rich, Focused Target market

Cons: Primitive Design and UI, Overload of features that needs more thought

Verdict: Good beginning but needs more clarity in thought and expression. Marketing has to be more than just the one-time iPod contest which happened when the site opened to general public.

I got my invite to minglebox a couple of days back and logged into the site then. The idea is very similar to Jhoom! The difference is in the design and the UI. I dont know much about the founders and can’t comment convincingly on the new features but it looks that these will compete on the design and marketing.

Pros: Feature rich, Focused Target market, Cleaner UI

Cons: Still in private Beta and doesn’t offer anything new so far. I don’t have a strong reason to use this site and not Jhoom or Yaari (described below)

Verdict: Good beginning but they will have a tough time getting into the market with existing players offering exactly the same service.

Yaari! is the 3rd social network, after Jhoom and Minglebox, that has a very similar offering. It’s not public yet but a release is expected soon. The differentiator will again be the design, UI and marketing.

Pros: Feature rich, Focused Target Market, Product Blog that is being updated by the founders. Domain name - it’s a beautiful domain name for the market it is catering.

Cons: Late entry to the market, as compared to Jhoom and Minglebox.

Verdict: They stand a chance as much as Jhoom or Minglebox. The fact that they have maintained a product blog and are trying to involve the users and show them the roadmap makes them a little more transparent. I also get a positive feeling about their marketing because of the same reason.

Fropper isn’t exactly a social network by definition but it comes close to catering to the same market that the other sites are targeting. It’s inspired by the ’old school of thought’ where users are charged for even the basic use of site and has over a million registered users, as claimed.

Pros: It’s backed up by the same guys who run Shaadi.com and has built some good intelligence to keep the users interested. The day I signed up, I got buzzed by many girls and the number of buzzes decreased drastically with time. Reason: the daily email that they send to every member with the list of last few users who joined the site. I was impressed by the fact that the email they sent out to me had all girls and I assume that the email that goes to the females has all males. Now, that’s definitely a good way to get people visit the site again. When I signed on to the site after a month later, I got buzzed again in similar capacity. So, I believe that they have more intelligence than just the ‘Newest Members’ logic. They also have a lot more marketing moolah which is evident from the fact that I have seen their ads in the radio and televisions already.

Cons: They charge users a fee for the basic use of the site, like contacting users with a custom message. This is so ‘old school’. They also brand themselves as just a dating site and not a socializing site, which will create problems with adoption and repeat-traffic, once there is a decent alternative

Verdict: Unless they change their business model, the site will keep losing its members to the other networks who provide the same services at no cost. Not impressive, overall!

To summarize - Orkut.com is the most impressive social network in the Indian market currently. With the arrival of Jhoom, Minglebox and Yaari - Orkut is most certain to lose out on its market share as the other 3 will capitalize on their Indian presence and more ‘Indianized’ marketing. It’s very difficult to choose one over the other amongst Yaari, Jhoom and Minglebox currently - the one with the better clarity, UI, marketing and passion will win. I wont give much of a chance to Fropper despite its marketing muscle - any site that can’t think of making money other than charging their users for the basic use, when others are giving it for free does not even deserve to win.

My recommendation for the existing and new players in this market will be to give some more thoughts on what the Indian audience will require. Here is what I believe:

1. A site that presents themselves as a dating site will not be very successful. Indians are still a bit conservative when it comes to finding dates through Internet - dating has to be made incidental with emphasis on ’socialization’
2. I will not join any social network because I want to write a blog or I want to upload photos in album. If writing blog was my primary purpose, I would have chosen Wordpress.com or Blogger. So, blogging is an important part but that shouldn’t be highlighted a lot. The emphasis has to be on providing tools to interact with friends and finding friends based on common interests. Think why Orkut scraps are so widely used. A blog wouldn’t be as popular.
3. Don’t overload the site with features. It’s good to provide features but not at the cost of trying to become a one-stop site with all the features. Historically, the applications with a more focused user base have been more successful. Don’t try to be everything for everybody. If you give me a few features, I will likely use those more than the cumulative use of all the features in a site overladen with features.
4. Work on the design and UI - please please pay more attention on the design and UI. Almost all the sites have the potential to do much better here.
5. It’s not easy to maintain your lead in this market. Any new player can come and displace you from your position if you stop innovating - Friendster lost to MySpace for the exact same reasons.

May the best team win! I, sure, will be keeping an eye on this market.

Disclaimer: Tekriti is involved in the implementation of Jhoom! but the above post does not hold any bias for / against anybody to the best of my effort.

Is Windows Live QnA answer to Yahoo’s answers?

Nandini, a friend of mine working at Microsoft, informed me about the public Beta of Windows Live QnA. Microsoft has definitely been coming up with interesting applications with their Live suite of products and this is the latest addition. I tried it for a while and the interface looks pretty neat to me.

Apart from asking and answering questions, you can also vote for answers. They also have a concept of Superstars and you can become one if you are fairly active with questions, answers and votes. Here is a sample question:

I know that I will spend more time on the site in the coming days. I have already been warned that it’s pretty addictive and I am passing on the same warning to the readers of this blog.

Santosh from JobMilan informs me of a Job Board he started in the form of a blog called JobMilan.

We have witnessed a few India focused Job Boards coming up in the last few months, which is good if one of these become really popular and they keep it free. I find all these commercial job sites over-priced - we pay really high amount for our accounts with Naukri and Monster. Here is what Santosh has to say about JobMilan:

Some of the advantage of publishing in JobMilan :-

• FREE Job publishing
• Exclusive Startup jobs section for startup employers
• We have a steady growth of 70% page views every month
• Strong community of job seeker querying and getting information about jobs (please see our “Recent comment” section)

I sincerely hope that the service remains free, even when this becomes a lot more popular.

I have been getting more than a few emails every month from people where they inform me about some of the cool products they have come across or are working on. I think that some of them are really cool for me to mention here - so I thought that I will start a ‘Product Reviews’ category at my blog to cover those products / services. The first one is about CineSprite.

CineSprite is the Indian version of Netflix - a DVD rental service that lets you rent out unlimited DVDs (with the condition of possessing 1 or 2 DVDs at a time, depending upon the plan) at a flat monthly rate.

From the site:

Cinesprite.com is the first fully loaded entertainment destination stirred with sparkle of comfort, shaken with the flavor of enjoyment and garnished with some unbelievable features. Get all your desired DVDs from our large selection, do not compromise and watch what you want. What’s more you get FREE shipping of DVD both ways and there are no late fee charges applied ever.

How it works?

The plans are also pretty reasonable with monthly subscription fee as follows:

1 DVD out-at-a-time: Rs. 399 / month
2 DVD out-at-a-time: Rs. 499 / month

More details can be found at the CineSprite page here. There is a special discount if you sign up for more months at a time. Just like Netflix - they have a both-way free shipping too.

I believe it’s worth a try. Let me know if anybody has tried the service or when they try it.