Poor logistics infrastructure and piracy have dampened prospects for several clones of Netflixs. Indian online movie rental services provider, Seventymm is still fighting with these issues even after entering into new verticals. This raises question on the consumer-entertainment model as well
The e-commerce space has been subject to much hype, especially the consumer-entertainment segment; where many new players have started taking interest. But how successful will these venture capital-backed portals be? Seventymm Services Pvt Ltd, one of the first entrants in the consumer-entertainment area, shows that there are some problems that weigh the prospects down.
Started in 2006 as a DVD rental portal, Seventymm.com has now shifted its focus to movie merchandising and e-commerce, and launched Shop.Seventymm. The online movie rental services provider ensures delivery to customer or subscriber in exchange of price of the products or registration fees. Using this facility, one can order gadgets, apparels, DVDs, books and home accessories from Seventymm, and even pay for them post delivery. Now, 50% of the revenues come from sales rather than the rentals.
In a recent interview, Seventymm CEO Mudit Khosla said that the company is planning to stream movies on 3G devices. With a customer base of four lakh, Mr Khosla hopes to generate revenues of about $1 billion by March 2012 by selling Hollywood-Bollywood tee shirts and other merchandise. The company has set up a separate merchandising team and partnered with 40 vendors for manufacturing the goods.
However, Seventymm's makeover has posed some new challenges. The basic problems, which plagued its DVD rental business still remains; and issues like rampant piracy of digital products and slow logistics infrastructure growth apply to other players as well. Moreover, some experts believe that emergence of low-cost original DVDs also dampened its prospects. Relying on the idea that the niche audience will be more interested in renting old titles, Seventymm continued with its business module. However, the company has been facing stiff challenge in form of torrent downloader and file-sharing services.
The business has taken a beating. Initially, the company was self-funded to the tune of Rs2 crore, but later received about $21.4 million in funding from venture capital firms Draper Fisher Jurvetson, Matrix Partners and NEA-Indo US Ventures.
According to analysis by VCCircle, audited figures for the year ended March 2010 indicate that it had recorded sales of only Rs6.8 crore. Data available on the Ministry of Corporate Affairs website shows that the company has been consistently making losses each year till FY2008-09. Till FY2007-08, the profit and loss account balance(debit) stood at Rs19.31 crore, which went up to Rs33.85 crore for the year ending 31 March 2009, which means a loss of Rs14.54 crore.
Despite poor performance, the company managed to raise further funds through fresh capital at premium. The company share capital has been rising each year. For FY2008-09 it went up to Rs1.55 crore from Rs 52.66 lakhs in FY 2007-08, which is inflow of Rs 1.02 crore. While the balance in reserves and surplus went up to Rs75.16 crore from Rs 24.91 crore (addition of Rs 50.25 crore).
Then in 2009, Seventymm was dragged to the court by Moserbaer, alleging violation of 'exclusive rental rights.'
The other major player BigFlix, meanwhile shifted its focus to online streaming and 'virtual multiplexes', and soon became the dominant player. Shemaroo Movies and Yahoo Movieplex too joined in.
Seventymm shifted its focus again, turning to movie merchandising instead. Apart from the 'Bodyguard' line, Seventymm's other offerings have been the 'Anna Hazare range of tee shirts and stuff related to movies like Band Baaja Baraat etc.
Unfortunately, movie merchandising hasn't been successful. Attempts were made to sell 'Ghajini' dolls and soft toys from the box-office dud 'Na Tum Jaano Na Hum', but there were no takers.
By diversifying and repositioning itself, Seventymm has placed itself directly in competition with the other ecommerce portals. The existing heavyweight players like Amazon and Flipkart, have become the go-to places for books and movies. Futurebazar is more known for consumer electronics and gadgets. And in the ecommerce space, it has many competitors like Quickr, YeBhi and Snapdeal. Seventymm, however, is seeing a rising tide of complaints. Almost on daily basis, complaints are being posted in consumer forums alleging non-delivery of goods despite full payment.
While the DVD rental model of Netflix worked in USA, it failed to deliver in India. Even Blockbuster, the most famous video rental chain last year, filed for bankruptcy and was later picked up by Dish Network. The consumer-entertainment space is a tricky one, and free internet content poses a stumbling block. The likes of Seventymm must tread cautiously and distinguish themselves in order to survive.
Healthy low-cost food and natural water to consume are important for all of us. Is there a conspiracy to force us Indians, in the name of "development" and "growth", to consume more and more unhealthy food and beverages?
Welcome to God's own country, Kerala. The coconut tree stands as a symbol for this southern state, more than what the Taj Mahal means to Uttar Pradesh. But if you want a sip of coconut water, an imported tetra-pack from the Philippines may be easier to get.
Observation # 1:- Driving from Fort Cochin to the new CIAL-built Kochi Airport, which is about an hour's driving time to do (almost 35-40 kilometres), you will see commercial establishments of all sorts. From fancy automobile dealerships (Nippon Toyota's facility has to be probably the biggest car dealer's building in all of India) to humble eateries and roadside stalls—of all sorts—except the familiar coconut water seller.
The route is densely lined by coconut palm trees on both sides. However, there is not a single stall selling fresh coconut water on this route. Perforce, you have to stop for bottled soft drinks, if you wish to slake your thirst or revive your humidity-sapped energy levels. At one such stall, the taxi driver interprets, while I ask the intrepid Malayali shopkeeper as to why he does not also keep fresh coconuts. This is when coconuts are growing in his backyard!
What he tells us is amazing—all along this route, and many other tourist routes, there is an incentive paid to them to not sell fresh coconut or fruit juices. Who pays? He gives us a wry knowing look, bubbly and sweet. This is in the State, where the Plachimada episode brought out a rare awareness on the issues behind 'coca-colonisation' of groundwater by soft drinks. It is probably imperative for somebody to regain space and visibility. What has happened is that this somebody simply banned the competition—fresh juices; as Pepsi had said (in an old marketing campaign)—nothing official about it.
Observation # 2: The rail route from Hyderabad to Bengaluru via Kurnool, Dhone and Anantapur, or the other one via Seram and Raichur, passes through, at places, amongst the driest parts of India. Driving along this part of the country, one has encountered—like one does in parts of Rajasthan around Jaisalmer and Jodhpur, people standing on the side of the road and waving empty plastic bottles at cars, beseeching drivers for water. Climate change has made some difference in increase of rainfall, but creating water bodies to preserve water, or charge underground reserves is still not well understood. The late Sir Arthur Thomas Cotton and the Raichur Dooabs notwithstanding, this part of the country still suffers terrible water shortages at times; and flooding at others.
In both these locations you will find that bottlers for the major soft drink and packaged water companies have put up huge facilities—to tap new sources of water, collect and secure existing water-sources, as well as produce their beverages and "mineral" waters. There is an element of secrecy with these projects, which exceeds the security consciousness of the nuclear plants in these areas—but broken by an overly, loquacious water-resource specialist, on his way to one of these huge projects, who shared a compartment with me on a recent journey.
Free drinking water is not part of their business plan for this area. It is, however, part of what Forbes magazine also claims in a recent article, an ambitious move to "claim" the potential $50 billion water market in India. The same article also talks about "development" being linked to this. To enhance this development, as brought out in the article (http://www.forbes.com/sites/ericagies/2011/09/26/access-to-water-may-limit-indias-development/), these factories will have 8-metre high walls, further protected with barbed wire and armed guards. And certainly, plenty of roadside stalls selling water and soft drinks—actually, those are already in position.
Observation # 3:- Head towards Uttarkhand from Delhi, on the roads to Haridwar/Dehradoon or Haldwani/Nainital, and you pass through the rich lush agrarian sugar belt of Western UP—crisscrossing rivers and canals in the Upper Dooab, there is not a dry spot any place, off the road it is green irrigated even during the summers. Not too many years ago, along with the heavy and heady scent of the "raab" that emanated from the sugar mills and molasses- or jiggery-making units along the road, were lines upon lines of stalls, selling fresh sugarcane juice.
Each small town en route had its own little twist. Adding and tweaking the quantities of added lime, masalas, black rock salt, garlic, ginger, spices, or even the diameter of the sugarcane itself—some were green in colour, others came out yellow or brown. In addition, if you wanted to take fresh hot gud or whole jaggery, then all you did was remove the hubcaps from your car, wash them well, and hey, you had circular cakes of heavenly sweet unrefined sugar ready to go—soft or hard, sticky or stiff—again, to choice.
Today, all along these routes, you cannot spot a single stall selling fresh sugarcane juice. Sure, if you take the trouble to head into the small towns—and in Western UP, that means a detour which will add an hour, or more—then you may spot some.
However, all along the main roads, at the humble dhabas or swank rest-stops with huge food courts, the problem is: "Sorry, not available". The proprietor of one particularly successful food court en route, who has become a friend over the years, told me that the pressure from you know, who was very strong. Install anything to do with fresh juice of any sort, and face all sorts of action from the health & sanitation department. It is one of those rare places, en route, where cleanliness and hygiene, as well as environmental awareness, are as good.
Is there a conspiracy to force us Indians, in the name of "development" and "growth", to consume more and more unhealthy food and beverage? Something like the way opium was sought to be introduced in China in the 18th century and tobacco is still pushed in the developing world, by the Warren Buffet School of Business Thought?
One would think so, if one sees how railway food, for example, has also changed over the last few decades. Put aside the sheer volume and weight of plastic and foil along railway tracks all over the country—usually not visible from the air-conditioned coaches pelting past with their dark-tinted windows. But they hit you in the face and the nostrils if you choose to travel non-air-conditioned—it is the rapidly-vanishing concept of a freshly cooked hot meal, which used to be a staple. It has now been replaced by packaged goods of all sorts.
Fair enough, dining cars are not feasible anymore for reasons of cost and also safety, but does the replacement have to be packaged cup-noodles, biscuits (See: How does the wood in your bread, biscuit taste today? ) and white bread based fried food? A simple basic vegetarian thaali, of the sort still available for Rs10 or Rs15 outside railway stations, can and should be the aim. This should be in addition to regional fresh hot-cooked meals on trains and platforms. That by itself would take care of a large number of transients who have been deprived of home food.
But instead, we hear that a move is afoot at the Rail Ministry to give more attention towards providing what is known as "fast" food. In other words, the Rs20 "veg burger", the Rs12 or Rs15 bottle of water or soft drinks, and the rest of it—including pizza in a new-generation plastic wrap, which will heat it up when unwrapped. Brilliant! You then throw all this plastic out of the window or door, on to the track, where in due course of time it causes another set of problems, while you settle for modern generation diseases. In a country where lemon rice with curd, or dhokla with chutney, or idlis with sambar, or a simple fish-daal-rice-onion meal or biryani in a banana leaf would do—we are going to see "development" in the form of a KFC or McDonalds burger get free advertisement space on our trains as aspirational food.
But in the midst of all this, it does appear as though there is hope, and not just for the ultra-rich spending on healthy food at high-end hotels and restaurants. In what appears to be the beginning of a countermove by consumers, one can spot change moving back towards eating and drinking healthy at low cost. I have spotted this of all places in the non-mall non-glitzy locations of urban India—where people gather to catch local buses or trains, or hang around before, during and after working hours. It is happening even more in places where the local authorities are unable or unwilling to move street hawkers on. It is certainly happening at the expense of pedestrian walking space. But what is important is that one does not have to go to Bangkok to eat fresh healthy street food anymore.
This is at reasonable prices, with some visible attention to hygiene and cleanliness, and lectures on health and nutrition thrown in for free. I have seen this lately at the Sector 17 market in Vashi, Navi Mumbai, not too far from the otherwise much maligned APMC centre, in the covered walkways of Nehru Place in New Delhi not too far from the Okhla Mandi and even in the evening food stalls of newly resurgent Patna. Whether it is multigrain bread for sandwiches which contain tofu and amla slices without butter in Vashi, or brown unpolished rice with rajma and free-range "desi chicken" in Nehru Place, or the fish tikka made of silver carp in Patna with a splash of olive oil and served with litti, the re-advent on non-fried non-butter non-maida, non-vanaspati and healthier food does seem to be vanishing.
At all these locations, you will spot rows upon rows of stalls selling fresh fruit juice. From the humble bel at Rs10 a glass to mausambi (sweet lime) at 25/- and moving on to more exotic fruits, there is a price point for everyone. But it is the basic hygiene that seems to have suddenly caught on, which is interesting - no more hidden water pipes, the fruit is juiced in front of you in a transparent manner, and no extra charge if you do not want ice added. As for the food, what can go wrong with grilled fish, especially, if it is fresh and part of the pisciculture revolution in Bihar - at 60/- rupees a kilo for silver carp, it does not get better.
To be honest, these new evolutions of basic healthy food may have not made their way on to the menus of "mainstream" restaurants as yet (none of the "aspirational fast food" brands will serve whole-wheat bread, for example). But something does seem to be happening on the streets of India.
Now if only we could get the fundamentals on drinking water correct.
To those who would try their best to deprive us, we have this to say, in the words of one of the rising number of Wall Street protestors—we can see what you are doing but that doesn't mean we don't know what you are doing.
How long will Coke and Pepsi and their other friends, purveyors of unhealthy fast foods, keep getting away with what they have done first in their "home" countries and now wish to do elsewhere in the world? Are we seeing a repeat of the tobacco cartels and their ways again?
We have to do something about this. Stand up and ask your elected representative at all levels—what happened to my fresh, frugal and healthy street food? When and how did it get replaced by this packaged garbage?
Following RBI clearance for the deal, IRDA will now grant final approval for completion of the transaction, Reliance Capital said in a filing to the exchanges. This transaction pegs the total valuation of Reliance Life Insurance at around Rs11,500 crore
Mumbai: The Anil Dhirubhai Ambani Group's financial services arm Reliance Capital (R-Cap) today said it has received approval from the Reserve Bank of India (RBI) for its proposed 26% stake sale in Reliance Life Insurance to Japan's Nippon Life, reports PTI.
The company had signed a definitive agreement to sell a 26% stake in Reliance Life Insurance to Nippon Life Insurance for Rs3,062 crore earlier this year. The deal was subject to regulatory approvals.
The Insurance Regulatory Development Authority (IRDA) has already granted in-principle approval for the proposed stake sale. Following RBI clearance for the deal, IRDA will now grant final approval for completion of the transaction, R-Cap said in a filing to the Bombay Stock Exchange.
Commenting on the development, R-Cap CEO Sam Ghosh said, "We are delighted to receive the RBI approval, bringing us closer to concluding this transaction very shortly."
"This is great news as we move closer to completing the transaction," Nippon Life Insurance president Yoshinobu Tsutsui said.
This transaction pegs the total valuation of Reliance Life Insurance at around Rs11,500 crore.
Nippon Life is a 122-year-old Global Fortune 100 company and the seventh largest life insurer in the world. It is a leading private life insurer in Asia and Japan.
R-Cap figures among the country's top-four private sector financial services and banking groups in terms of net worth.