Moser Baer to rock home video market

Pirated and established movie video compact disc (VCD) and digital video disc (DVD) players have stiff competition on hand with optical storage manufacturer Moser Baer today announcing its entry into the Rs 500 crore home entertainment industry, offering VCDs at Rs 28 and DVDs for just Rs 34.

Movie VCDs are generally priced between Rs 35 and Rs 200, while an average DVD costs around Rs 400. There are an estimated 26 million VCD/DVD players in the country, with the figure believed to be growing at 25 per cent.

"I believe that at these price points, we will redefine the home video market in India," said Ratul Puri, executive director, Moser Baer.

The company is setting up a 100 per cent subsidiary and investing $100 million (around Rs 500 crore) over three years towards this end. To start with, this division of Moser Baer will acquire copyrights and exclusive licence for over 7,000 movie catalogues across languages, which comprise one-third of all movies produced in India till date.

Industry sources say Moser Baer already has around 5,000-5,500 catalogue licences under its belt (it expects to have all 7,000 by March 2007) and will start with Malayalam movie titles down South in two weeks' time.

"This initiative represents an excellent opportunity to leverage our optical media strengths in patented and proprietary technology, capacity and costs, enabling us to offer high-quality titles at very attractive price points," said Yogesh Mathur, Group CFO, Moserbaer India.

The company can price its products low because of its proprietary technology. It already sells blank CDs and DVDs at competitive prices.

Home videos account for 7 per cent of the total film revenue of Rs 7,900 crore. With its foray into entertainment, the company hopes to acquire copyrights for 40-45 per cent of the films released till date.

The initiative will see release of movie titles in Hindi, Tamil, Telugu, Malayalam, Kannada, Bhojpuri, Marathi, Bengali, Gujarati and Punjabi languages.

"We will also use part of the money for content creation (niche content like educational, devotional and short films) and acquisitions," said Harish Dayani, CEO, Entertainment Business.

With 18 CFAs and 400 distributors, the new division will set up branded outlets at about 300 locations, in addition to its alliances with large format stores.

Moser Baer holds 16.5 per cent share of the global recordable optical media market. Earlier this month, the company launched "Moser Baer" range of USB flash drivers for data storage.

But what about the time to market for new releases? The company had no definitive reply.