Blog Post

Reliance ADAG In Talks To Acquire SeventyMM?

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.

10 Responses to “Reliance ADAG In Talks To Acquire SeventyMM?”

  1. Hey Javaliram,

    I have used Pappu as well. I was staying that side of Delhi for like 5-6 months before shifting to defence colony and i used that guy as well.. even at Defence Colony , the main market itself has a library with a respectable collection. Its open the entire week and i can simply pick up or drop on my way , or my way in from office…much more convenient.

  2. Puchoo, Javaliram, Indian Wizard. – I completely buy your points. The truth is somewhat in there in what you'll have written.

    The online business model may be flawed. But no one doubts the potential of the rental industry. It definitely is going to take a lot of adaptation for the business to be viable in this industry.

    To elaborate further, I get my films from Clixflix. Their model was online (and i gather they were the first in India with such a model in 2004), but very quickly they turned around (probably could see it first hand) and concentreted on getting movies to customers. Enter a guy like me, who often browses for films but will finally call for them. On a leisurely weekend, I often pop into their stores (I use Malad & Borivili – they have 6 or 7 in Mumbai) and get my fix instantly. When I call, delivery is anywhere between 10 minutes to half an hour. They also pick up as per my convenience. They offer all the benefits of the online model and have combined the offline avenues as well for the Indian folks.

    As for the pallika bazar bit, that will always exist – I mean what are you supposed to do if you dont have access to the real stuff. But if you got the legit option and still choose that stuff – then honestly you shouldnt be opining on business models. After all there's nothing like the original…

  3. I agree with Javaliram, the future of such businesses in India will be the same as happened with Indofilms, Indianmovies and many others in US. This business plan is flawed and will not work in India. I do not know what the guys at these VC firms were thinking when they funded such ventures. If you know whom to contact at these VC firms please let me know, I have many business ideas which need funding and they will work too and none of them is dvd rental in india. Please contact me asap on my website :-) I mean come on, the team of Seventymm themselves is saying that they are not in talks with Reliance, what else do we need. Is this news again a marketing gimmick, just like Bigtv ? I dont know, what do u say ? well its working.

  4. Javaliram

    Puchoo, you made some very interesting comments about local rental libraries and time of delivery. I would like to emphasize it little more. I use a local rental vendor – Pappu Video Library in Saket, New Delhi (name not changed).

    – I have Pappu’s cell number and I call him anytime of the day and place my request. I don't need to be online to place my request.
    – I sometimes get instant gratification of getting the delivery in half hour. For my weird requests of Spanish movies, I wait for few days and I am always told "sir jee arrange ho jayega" (may be from Palika).
    – I pay only for the movies that I watch, not fixed monthly fees.
    – Pappu knows that he can't send me any low quality or pirated stuff. Otherwise he is going to get it from me.
    – And the most important is the pick up and drop times are decided over the phone depending on my convenience.

    How can any online companies match the level of personalized service that I get from Pappu. I am sure if you try, you will find one Pappu near your place also. I am extremely skeptical of this online DVD rental business. The business model has to be driven by the market realities not the other way round. Simple copy paste of Netflix is not going to work in India, just like Shaadi will not be successful in markets like US. I hope that Draper Fishers or NVPs or Reliances put their monies in strong ideas that are meant for Indian online market. It would be sad to see all this money going in for online business models that are designed for any markets but India. This money will be pulled out as bad investments when the returns don’t come – causing another boom & bust.

  5. why? Whats the advantage here? The future for such platforms is not very clear at this stage. Already this week one has been hounded by CCE from seventymm calling and offering masive discount on registrations, security deposits etc which currently lead me to assume that they are not having the easiest time.

    They dont have an advantage with respect to having selections which have not hit the market yet. In addition they are fighting with Palika Bazaar, Bitorrent, local rental libraries and so on. For a working couple like me and my wife, their home delivery or pickup can prove to be more of a pain than anything else (i.e ensuring one is at home etc etc).

  6. i just read in the hindu that if you wanted to find out whether a particular movie show in a mov hall was available or not, you could just go to onyomo.in on web or owap.in on gprs. checked it out…good work there.

  7. 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.

  8. The home video industry certainly seems to be growing… The earliest organised operator- Clixflix also seems to be ramping up with franchising plans
    Great going – FINALLY A TIME TO SIT BACK, RELAX AND ENJOY!