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Home video market becomes cheaper, cleaner

business Updated: Apr 12, 2007 22:03 IST

The home video market in India is seeing heightened competition. First, Moser Baer, a player primarily into the optical storage devices market, recently entered the market with high decibel advertisements offering DVDs and VCDs at record lows of Rs 34 and Rs 28, respectively. T-Series responded with a huge ad campaign too though its products are priced slightly higher.

However, existing players don’t feel that there is necessarily a price war in the segment Bhushan Kumar, Managing Director, T-Series claims that T-Series has been selling VCDs and DVDs of quite a few titles at Rs 45 since the past two years but just didn’t heavily publicize the offering.

Describing the T-Series strategy, Bhushan Kumar said: "At the time of launching home video products for a movie, we price it higher; then reduce it after a period of five to six months and then again reduce it further to price levels of Rs 38 for VCD and Rs 45 for DVD."
For example, the VCDs and DVDs of Sarkar were launched at Rs 160 and reduced three months back to Rs 67. In contrast, new movies like Salaam-E-Ishq, Nishabd and Honeymoon Travels will be available at Rs 160 (VCDs) and Rs 299 (DVDs).

With Moser Baer’s entry, the distribution marker is expected to become more organised. Reliance is also believed to have plans to enter the home video market. Sushilkumar Agrawal, CEO and MD, Ultra Group foresees some positives: "It is a healthy sign for the market that players like Moser Baer and Reliance are entering the home video segment. Retailing and distribution will undergo some positive changes."

He adds that Ultra reduced prices of quite a few titles like Kranti and Bade Miyan Chote Miyan way back in October from Rs 300 (DVD) and Rs 100 (VCD) to Rs 45 (DVD) and Rs 30 (VCD) as a testing exercise, but this did not yield satisfactory results.

Kumar of T-Series also agrees that the viability comes into question if DVDs and VCDs of new releases are priced abysmally low. Agrawal said pirates anyways sell the products for as low as Rs 15. Thus, product and not pricing will be the key.

The home video market is largely unorganised and notches a modest annual turnover of Rs 550 crores. It is estimated that 50 per cent of this is controlled by pirates. According to industry sources, the Bollywood home video market sizes up to Rs 100 crore of which Ultra has a 35 per cent share and Shemaroo 15 per cent.

Moser Baer has aggressively entered the market and boasts of acquisition of 7,000 titles. Harish Dayani, Chief Executive, Entertainment Business, Moser Baer said, "We expect the regional business to contribute to 65 per cent of the revenues while the rest may come from Hindi business." It recently announced its launch of Telugu titles in the home video market with 101 Telugu titles.

According to the recent FICCI-PwC report on Indian entertainment and media industry, the home video market is going to almost double from Rs 830 crore in 2007 to Rs 1,700 crore in 2010.