December 22, 2006

 

If this succeeds

If Moser Baer delivers on its promise of selling movie DVDs at Rs 34, it surely is a great news for the consumers.

But that may not come as good news for companies like Seventymm which aspires to be India's Netflix. This is not a good news for TV channels which screen movies. For just Rs 34 you get to watch ad-free movies. That too, at your own convenience and pace. Of course, piracy will be crushed without any support from law enforcement agencies. And, your local DVD rental shop will just vanish.

Now, there is an piquant situation. Substantial part of the revenue for new movies come from satellite rights. For example, KANK's satellite rights were sold for Rs 12 Crores. If the DVDs are available in market before it is screened on TV channels, as it happens today, then value satellite rights will nose dive. Even if the distributor decides to release the movie on DVD only after the TV channel makes recover their money, people may choose not to watch movies with an hour of ads. They will wait for another few months to get it on DVD.

All in all, this might work great for movies may be more than 1 year old. But, getting the latest movies on this price point will be real tricky.

Of course, the hurdle is the first word of the post - If.

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