For a nation obsessed with cinema and the glamour that surrounds it, by being able to afford a DVD or VCD in the price range of Rs 28-34, happiness (with reference to Moser Baer advertisement) could not come in a better package. The promise of many big names to bring blockbuster films at economical prices on DVD/VCD seems to hold a revolution yet to be realized in the Indian Home Video Market.
The New Economics of Indian Film Industry: Creativity and Transformation report by CII and A.T. Kearney, suggests that the domestic market for Home Video is virtually unexplored, and much can be done to tap this. Around 84% of the revenues of the largest film industry in the world come from box office sales compared to 25% in the U.S. Whereas, the United States receives 40% revenues from home video sales, India manages only a depressing 8%.
These figures are supported by the fact that India already has about 26 million DVD/VCD users, growing at a healthy rate of 25% annually. 75% of the small town population prefers to watch films at home, and most of them do so by buying pirated CDs. Clearly, a valid argument for expansion of the home video market can be built. A report by Pricewaterhouse Coopers confirms it by speculating a compound annual growth rate of 31 % to Rs. 2,500 crore by 2011, for the domestic home video market.
The existing market in home video sales is dominated by Moser Baer, the world’s second largest optical storage manufacturer, which forayed into the entertainment industry through home video market. The initiative enabled people to consume more of the content on home video. Taking cue, Reliance-Anil Dhirubhai Ambani Group has also launched its Video on Demand online service, Bigflicks.com. It plans to open 100 retail stores by the end of 2008 which will rent films, as well as sell DVD/VCD. Similar ventures in content distribution have also taken place in the U.S.
India has a very strong base for the regional market asa far as home videos are concerned. 80% of all the movies made in India are in regional languages. Hence, DVD publishing can penetrate the regional markets by providing content in languages like Tamil, Malayalam, Bengali, among others. The string market demand for Hindi and English content in various languages can also drive this market.
The home video market in India also has a strong demand for mythological and religious content. There is also a growing market for documentaries, educational films, world cinema etc.
The growth of the market can also be felt in the figures that suggest of the Rs 1,500-crore home video market in India. However, only Rs. 200 crore of this is official; the rest can be credited to piracy. The increase in demand perhaps, is either unrecognized or not catered to properly; such that piracy gets a boost in the domestic market. With the expansion of the supply of low-cost DVD/VCD (which obviously have a much better print quality, owing to their proprietary and patented technology which enhances quality and significantly reduces cost), it is possible to curb the piracy in entertainment industry.