When online DVD rental company SeventyMM bought out competing DVD rental company, I wondered if it was too soon for consolidation in the business. Now, Mint reports that Reliance ADAG is in talks to buy out SeventyMM. The company has denied that they’re in talks, but Reliance ADAG execs have told Mint that negotiations are at an advanced stage.
SeventyMM currently caters to around 25000 households offering around 15,000 titles on rent in six cities – Chandigarh, Bangalore, Chennai, Hyderabad, Delhi and Mumbai. SeventyMM had received substantially larger funds – $2 million from Draper Fisher Jurvetson, and $7 million subsequently from Matrix Partners India. Still, with Reliance looking to pump $100 million into Big Flicks over five years, Nimbus investing $34 million into its DVD rental venture and Moser Baer selling DVDs for less than most rent them out for, SeventyMM must feel outgunned. Sources had told me that when SeventyMM had bought Madhouse, it had been a distress sale: the company had received $228,000 from the Band of Angels, and was running out of money.
Not that any of them threaten the burgeoning piracy business in India. Do read about my visit to Palika Bazaar and Ghaffar Market in Delhi.