Online DVD rentals: learning from Netflix?

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With both Seventymm and Bigflix, I have come close to signing up – but never signed on. The barrier was not the registration fee but a niggling doubt whether this kind of service is really useful for me. I am quite Ok buying the DVDs I desperately want or renting them from a store. When renting, being rushed to see a movie is an irritant. The online rentals promise to remove this worry but I am still not convinced. They have built huge businesses in the US. Netflix, which took on Blockbuster, is one such success. Netflix claims a subscriber base of 8.2 million and an inventory of more than 100,000 titles. According to the Netflix website, its members say they rent twice as many movies per month than they did prior to joining the service. Some of the reasons for Netflix’s success include: lack of late fees, unique distribution system, huge inventory unmatched, creation of a user community and personalization. Based on the movies you have ordered previously, movie titles are recommended for you, using other user ratings. Even its website is noted for its simplicity and was nominated for the Webby Awards in 2003 & 2004. Their method of delivery – the red envelope has become iconic in its own way. What seems like a basic service has actually been thought through to work virtually error free.

The challenges faced by Indian DVD rental services are not about coming up technology like that of Netflix – that’s the easy part. They could even delight consumers with their customer service. After all, we have our SMS services for reminders & orders. The personal pick up service may work in most cities. Our brands need not rely on couriers & postal services for delivery & pick up. The challenges are in the area of consumer mindset and competition.

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  • Who is the target audience?: the up-market, English movie aficionados are small in number. While they may be potentials, will the services offer the titles relevant to them? They are not likely to be fans of the popular genres like action. If they don’t find the titles they want online, they are unlikely to be regular users of such services. If the potential is the rung below who are not averse to some Hindi or regional movies, are the comfortable with online transactions? Housewives are ideal consumers but they have their fare on TV and DTH. If its the ‘on the go’ generation, that’s precisely the problem – they are on the go. They would prefer to hang out in malls or party with friends. Would a quiet family evening watching Titanic on a rented DVD get to be their habit?
  • Competition from low-price DVDs, piracy and DTH: the unit price of some Hindi & regional titles are dropping. The corner store pirate is still around. And DTH offers some new movies to watch on-demand. These could be barriers for signing up with these rental services.
Investors see a huge potential in movie rental service in India. Check out this interview with the investors behind Seventymm. They are betting big on the future of the business.
I feel that unless piracy is eliminated, the full potential of movie rental service will not be realized. Combine this development with the huge inventory of movies in our regional languages and then you have a compelling proposition. The pundits are also predicting a shift to downloadable movies in the near future – now that is something more likely to happen. Rajshri and other production houses like Bigflix are offering movies for download – for consumers outside India. It’s only a matter of time before it gets introduced in India. Personally speaking, I am still hesitant to tie up with one of the rental services – purely on the perception that they may not have the kind of titles I would want to see. Also, there is perception of time bound watching with rented DVDs – even if one can take ones own time. So one ends up buying the DVD to watch at leisure. I am never one to fall for pirated stuff – I avoid them completely- but so that’s not competition.
I have still not found that one compelling reason to sign up. Have you?
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1 comment

  • For some like me who watches movie on the house.. its a great way of doing it and so cheap.. they have pretty good collection.. at least 70mm.. 300 bucks unlimited DVDs for the month. one dvd a day..delivery and pick up anywhere.. so its mostly delivery at office and then pick up from here.. good quality prints.. of course i do buy DVDs of the movies which are my all time favourite but a lot more movies specially English are available with these guys than any dvd shop. Of course the other option is pirated DVDs which is huge specially in agencies here.. we have this dude who pretty much travels every agency in town and sells truck loads of DVDs…so yeah i guess the only reason could be cheap and collection and assurance of quality

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