Big Flix vs. Seventy MM - and the winner is… Big Flix?
ContentSutra reported that Seventy mm, the online dvd rental company has raised $12mn in its third round of funding:
Bangalore-based online DVD rental company Seventy mm has received $12.5 million (Rs 50 crore) from NEA Indo US Ventures. This will be the third round of funding for Seventymm, which now has a total capital of around $22 million.
Seventy mm plans to use this money to expand its online offering, and not foray into retail as Reliance Entertainment’s Big Flix are doing.
I was thinking of switching to Seventy mm away from my account at the local Shemaroo video store - they charge a ridiculous Rs. 125 per DVD per day (although for ‘old’ customers they’re pretty relaxed on the late fee policy). The reason why I haven’t made the switch is because of the kind of horror stories that I’ve heard in terms of non-availability of DVDs and therefore huge wait times.
I think that Big Flix’ move to do the online-offline is a great one-two combo, in terms of convenience. Online rental requires a lot of planning, and actually often more legwork. I’ve often picked up DVDs from Shemaroo at the spur of the moment, on the way home from work - just walked into the store, saw the DVDs that were on display and picked even a mediocre movie, just because I felt like watching *any* movie. On the other hand I’ve often lamented them not having an online catalog, which makes browsing and booking movies much easier.
Big Flix’ model fulfills both needs.
Moreover, with its online-offline model, it will be able to attack the product adoption diffusion curve from both sides (if that sounds like greek to you, read my book review on Geoffrey Moore’s brilliant book, Crossing the Chasm). With its online play, it’ll get those innovators and early adopters using their services. With its offline play, it will literally ‘jump’ the chasm and get the early majority - who may still be more comfortable with the walk-in model - to start using its services. With time, however, Big Flix can market its online product and push the early majority to start using its online services rather than walking in by using the retail store as a ‘customer training’ platform.
I certainly don’t think that Seventy mm will have the ability to scale up / market faster than Big Flix (the score is… Startups 5, Big Indian Conglomerates 500,000!). I almost think that unless they do something truly remarkable, such that they aren’t competing with Big Flix on the same plane (perhaps by offering unparalelled customer service - which they’re clearly not doing as far as my friend Karan is concerned). If it doesn’t do so, I feel that Seventy MM will (a) either be bought out, or (b) will die out.
Therefore, in this competition, I believe that it is Reliance that will emerge as the winner. Feel free to disagree with me in the comments below.
What do you think? How can Seventy MM compete? Do you agree that the online-offline play by Big Flix is the winning combo? What’s the word on the street as far as Big Flix’ service quality is concerned?
Check out Ashish Sinha’s (pluggD.in) post on the same topic here.
Tags: Business Model, Competition, Conglomerates, Crossing the Chasm, Media, Online-offline model, Purple cow, Reliance, Service Quality, Seventy mm
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