BIGFLIX has been really pushing themselves on the urban youth. It's nothing new and its surely not rocket science.
Yesterday over a cup of tea while it was pouring outside, we did a quick calculation over their market. Given that we in India are 1.2 Billion strong, we discounted 25% as junta that is old and would not be interested in rental movie viewing. Then another 25% who would perhaps be younger than 18 and would not be interested in such a service.
Then we took away another 15% of youth that could maybe not afford this kind of luxury. So we assumed about 35% of junta that actually may use this. We discounted this by more than 50% since we may have missed a few other factors (well, some tea - rains - you can get an idea!).
That leaves us with just about 10% of junta. So 120 million. Let's even move out another 20 Million. So assume there are about 100 Million people who fit their demographic market.
Right now they are charging about 8 USD per user per month.
You do the math !! Even if they grab 30% market share (due to some furious marketing), they could be making about USD 200 - 240 Million a year !! They have about 15,000 titles. Royalties would be paid on per content copy. So that means each DVD and each CD.
So where's the challenge in this business?
There are 2 MASSIVE problems actually - Marketing this to the 'right audience'. This is the trial and error phase - a phase where there will be lots of money spent and wasted. The second problem is the 'execution' of this model. This means making sure that when I order a movie - i should be able to get the CD delivered to my doorstep in less than 30 mins.
With DTH services providing booking of showcase ad-free movies, this is going to one good time for the movie goer. I can now plug in my home theater to the Tata Sky showcase and watch DVD quality Hi Definition video and audio.
Now what bothers me is why Tata Sky doesn't have so many titles on their Showcase ?
Yesterday over a cup of tea while it was pouring outside, we did a quick calculation over their market. Given that we in India are 1.2 Billion strong, we discounted 25% as junta that is old and would not be interested in rental movie viewing. Then another 25% who would perhaps be younger than 18 and would not be interested in such a service.
Then we took away another 15% of youth that could maybe not afford this kind of luxury. So we assumed about 35% of junta that actually may use this. We discounted this by more than 50% since we may have missed a few other factors (well, some tea - rains - you can get an idea!).
That leaves us with just about 10% of junta. So 120 million. Let's even move out another 20 Million. So assume there are about 100 Million people who fit their demographic market.
Right now they are charging about 8 USD per user per month.
You do the math !! Even if they grab 30% market share (due to some furious marketing), they could be making about USD 200 - 240 Million a year !! They have about 15,000 titles. Royalties would be paid on per content copy. So that means each DVD and each CD.
So where's the challenge in this business?
There are 2 MASSIVE problems actually - Marketing this to the 'right audience'. This is the trial and error phase - a phase where there will be lots of money spent and wasted. The second problem is the 'execution' of this model. This means making sure that when I order a movie - i should be able to get the CD delivered to my doorstep in less than 30 mins.
With DTH services providing booking of showcase ad-free movies, this is going to one good time for the movie goer. I can now plug in my home theater to the Tata Sky showcase and watch DVD quality Hi Definition video and audio.
Now what bothers me is why Tata Sky doesn't have so many titles on their Showcase ?
