For Excel Home Video, it is time to expand as big companies like Anil Ambani's ADAG are planning an entry. The firm recently added MGM to its portfolio of Hollywood studios it has deals with. It is also tapping the TV DVD segment aggressively this year.
Eventually, Excel plans to get into local content as well for the overseas markets. Indiantelevision.com's Ashwin Pinto caught up with Excel Home Video MD M.N. Kapasi to find out more about the home video market and the company's growth plans.
Excerpts:
With how many studios does Excel have deals structured?
We have a revenue sharing arrangement with the studios. We also have the master license of Electronic Arts. |
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What is the share of Hollywood studios have in the home video market? How is Excel faring and what is the growth rate you are expecting?
Within this category, Excel has a 40 per cent market share. We expect growth of 25 per cent CAGR. |
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Generally how many units do you sell on an average for a title?
For this year so far, our top sellers have been Dor, Pirates Of The Caribbean: Dead Man's Chest, Night At The Museum, Cars and The Devil Wears Prada. |
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Excel has been scouting for a strategic investor for quite some time. Has anything moved on this front? |
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How has Excel gone about improving its distribution model?
We have chased the non traditional distribution model quite aggressively. This includes having a presence in major retail stores which do not have music but have movies and games. A division in our firm actually looks after this aspect.
We do not have baggages. Firms that are older than us came into the home video area with baggages. They had the psyche that home entertainment is more a rental product than a retail one. Our aim was to make the home entertainment space an ownership business rather than just a renting one. |
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Could you talk about your Movies and More division that launched last tear?
Right now there are 14 outlets in Mumbai and Pune. The target is to reach 40 outlets across different cities by the end of the year. |
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Now you have ATM machines and online selling companies dealing with DVDs. How is Excel adapting in this changing environment? |
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One problem for a Hollywood fan is that only a fraction of the films released in the US are available on home video in India. That is also the case with theatrical releases. Do you see this situation changing or is there not enough demand for Hollywood beyond blockbusters and franchise properties?
However the certification process is the one factor that slows us down. Even though home video is a private decision, unlike cinema which is public we still have to get our products certified. The TV show Prison Break has been sitting with the censors for the past seven months. |
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Could you elaborate more on the television DVD plans?
We are looking to have 20 titles here. Six to seven titles are already present in the market. We will launch new seasons of shows like 24, Desperate Housewives, Lost, Alias. Commander In-Chief is another show that we will launch on DVD. TV shows on DVDs in developed markets contributes 22 per cent to home videos revenues. We expect similar growth in India. |
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Does Excel have plans to get into the rental business as well?
As you said, there is a lot of content in the US that we don't even have a fraction of. You find rental products in the grey market and through parallel imports. For instance, the film Borat has not been rated and is available for rental. If we were to get into rental, then we would have to compete with this. A level playing field does not exist. Having said that, firms like Reliance are setting up rental outlets and we are looking forward to seeing how they fare. |
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You mentioned the tie up with Electronic Arts last year for interactive gaming. What progress has been made in this area?
We brought in new capabilities. We released the Harry Potter And The Order Of The Phoenix game which was at the same time as the global launch. Next year there will be Fifa 2008. At this point in time we are not talking with Indian game publishers. Electronic Arts realised that we have in-house synergies which would help the games business.
Since we have the market leader in gaming with us, we would like the business to settle down before distributing other firms' products. The amount of money that Electronic Arts puts into making a game is sometimes equal to a Hollywood blockbuster. That is why their products are at least twice as superior to the competition. |
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Packaging is important when it comes to purchasing decisions. What innovations has Excel done recently in this regard to distinguish its products?
There are only two Hindi films that have DTS sound on the DVD. Both of those titles, Lagaan and Parineeta, were released by us. Parineeta was the first Indian DVD to have a director's commentary. |
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What are the major titles coming up? |
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In terms of marketing what are the kind of activities that Excel does to create buzz around new titles?
We find that this particularly happens for premium classic titles like Titanic, Sound Of Music. We also have a money back guarantee for all our products.
We do tie ups with hardware retailers. So if someone buys a DVD player from a certain retailer there will be our coupons offering a discount. That way it makes it easier for the customer to immediately start a library. In the past we have also done synergy marketing like re-releasing a film on home video when its sequel was being released theatrically. |
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There is a lot of talk about low prices of DVDs. Does Excel have plans here to reduce prices which would lead to more sales?
This is based on consumer research. I don't think that home entertainment is a commodity business; it is a content driven business. Do you buy a book just because it costs Rs 30?
We do consumer price point promotions. We have a promotion running with 200 titles. Each is not more than Rs 333. Our dubbed VCDs are cheaper than the English VCDs. |
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The challenge in local content is that prices are coming down. How will you cope with this?
Right now we do not want to compromise on quality. Parineeta, Corporate and Dor sold over 1,00,000 units at price-points that are 10 times higher compared to low priced DVDs that you refer to. Great content, good quality at the right price-points and penetrative distribution will always have the ‘Consumer’ with it.
We also want to sell Indian content on home video abroad in countries like the US, UK, Australia from next year. The NRI market is underserved in this area. We have already started putting plans in place for this. In those markets the content on home video might be there but the quality is lacking in terms of presentation. We will make sure that our products are available with as many retailers as possible. We, however, do not plan to set up our own stores abroad. |
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What are your expansion plans?
Our aim is to release six to eight films next year. We will scale this up as we go along. We are looking at a revenue sharing model with the producers and we are confident that this will happen as we are transparent in our operations. |