10 Responses to “Reliance ADAG in talks to buy out Seventymm ?”

1. kanny on September 11th, 2007 2:59 am

   that wud be a sad happening as i am currently a happy member of seventymm and i know how reliance-adag sucks on customer service front !

2. Team Seventymm on September 11th, 2007 7:33 am

   Mamla filmy hai ! The gossip bug now seems to have bitten the serious financial publications as well. The story in today’s edition of ‘Mint’ with the headline - R-ADAG in talks to buy out Seventymm (Pg 7) is completely speculative and baseless. We at Seventymm strongly deny any such development and even intent in near future. We are progressing strong, hale & hearty and hope to continue the momentum with your support - our family members’ and business partners.

3. Jammin on September 12th, 2007 12:41 am

   Interesting story. Not quite sure what the business sense in this deal is?

   Consider these facts:Its been almost 10 years since Netflix (online model with physical delivery of the media)and 3 years since MovieLink, Amazon, etc (online download model)have hit the market. After all the hullabaloo these guys account for only 16% of dvd rentals in the US (where by the way PC penetration and downlaod speeds are gazillion times better and cheaper than India). Organised Retal chains like Blockbuster / Movie Gallery / Hollywood Video / TLA, etc., have 9000 stores and together with the mom and pop stores account for 82% of the US rental market share where the concept of a customer phone-in model does not exist. DVD rental ATMs account for 1%.

   My last dollar would be on more ‘hands on approach’ operators like Clixflix who are penetrating on all fronts.

4. pranav on September 12th, 2007 12:51 am

   Jammin,

   I’m not sure about the numbers you quoted above so I wont comment on it.

   but most of the Netflix subscribers I know are loyal converts.just for the sheer variety and flexibility and genres it provides.

   What is the ‘hands on approach’ you’re referring to ?

5. shashank on September 12th, 2007 1:04 am

   Jammin,

   Not quite sure about your figures but endorse your view.

   If assets are to be coonsidered valuable, then one must consider at what cost they were built or acquired. When 70mm launched they raised 40 crores at a time when the home video market was estimated to be Rs 400 crores. So you start of with funds equivalent to 10% of the organised market and then after 2 yrs have only 25000 customers to show for it spread across the country. The cost of serving these customers might erode the intrinsic “asset value”.
   Dont quite see how buying an over capitalised company is a good deal particularly when the online size of the market would acccount for the “crumbs” of the industry and not the “pie” - which is offline.

6. pranav on September 12th, 2007 1:13 am

   Shashank / Jammin,

   In case you werent aware about the wordpress feature where each comment is logged by IP. So, it doesnt take me more than 2 seconds to figure tha you’re the same person..

   You might want to be more careful the next time you go on a hidden agenda..

7. Jammin on September 12th, 2007 1:26 am

   Pranav,

   The figures i quoted are from the Entertainment Merchants Association which is a not-for-profit international trade association dedicated to advancing the interests of the $33 billion home entertainment industry . EMA represents approximately 600 companies throughout the United States, Canada, and other nations. Its members operate approximately 20,000 retail outlets in the U.S. that sell and/or rent DVDs. Membership comprises the full spectrum of retailers (from single-store specialists to multi-line mass merchants, and both brick and mortar and online stores), distributors, the home video divisions of major and independent motion picture studios, and other related businesses that constitute and support the home entertainment industry. EMA was established in April 2006 through the merger of the Video Software Dealers Association (VSDA) and the Interactive Entertainment Merchants Association (IEMA).

   The “hands on” approach is a robust model which would combine the online model with the offline model - the need of the industry (in being able to offer legit product) and present movie renter (for the sheer convenience). Blockbuster’s TOTAL ACCESS and Clixflix’s ALL ACCESS would be good examples.

   As for the ‘loyal’ Netflix customers, theres talk of Netflix ‘fixing’ their internal churn figures. Simply put if the churn is 4% per month X 12 months = 48%. Netflix would suggest the AVERAGE to be 4% - good use of the English language I guess. The churn experienced by Netflix is actually in the vicinity of 63%. Netflix’s last quarterly report figures also do report for the first time in its history a decline of customer acquisitions.

   But, I buy your point about the variety. The ‘Long Tail’ is a great leverage in a mature market and industry like the US. But in India, we are still searching in the dark on the best way forward to grow the home entertainment industry. And while the pundits opine and dispense with ideas, the common man just wants original stuff conveniently and at an affordable price. He does not want to jump through hoops and be restricted by user discipline (make a queue,etc.,) or by technology (find a computer, get a good dialup, log on, etc). It kills the mood of watching the flick to start with.

8. Jammin on September 12th, 2007 2:45 am

   Pranav,

   Thanks for the ‘tip’. Will be sure to tell my buddy Shashank not to blog from the ‘OFFICE’.

   PS: We do get our flicks from Clixflix.

9. Gaurav on September 12th, 2007 9:00 pm

   I think it doesn’t make much sense for R-ADAG to acquire a company with 25,000 customers and 15,000 titles. They can easily build this model into bigflicks or start a separate business. R-ADAG can get much better rates titles if they buy in bulk. They can easily beat 25,000 customers even if they promote the new service via their own existing marketing channels.

10. nemo on January 6th, 2008 6:56 am

    Seventymm - HORRIBLE SERVICE! Not sure why Reliance is interested to invest. Nothing to gain, I’m sure they can start off on their own and build a stronger service model. This company first needs to invest in Systems and Customer Service before adding new features to make more money!

    Recently subscribed and all the positivity vanishes the moment your cheque is collected.

    Ask for a suggestion and they will give an uneducated one! Order a DVD and wait until the delivery boy arrives, or you can call the next morning to check and the reply is its been dispatched.

    I waited half a day and then called again to check. Now the reply is “SORRY, SYSTEM FAILURE, DVD WAS NOT DISPATCHED”

    Guess these guys can do with some serious investment in SYSTEMS & CUSTOMER SERVICE PEOPLE if they want to be a leading online rental service.