Nimbus Announces Home Video Rental And Sales Foray With Showtime

Nimbus Communications has officially launched its home video entertainment rental and sale business called Showtime. The stores, which distribute DVD, VCDs and Game CDs, are currently only Bombay centric with 8 distribution centres. The release states an investment plan of over Rs 1.5 billion in the next 3 years with a target of 140 stores in 40 cities in the next year. Projections include 500,000 – 750,000 subscribers in the first year, a turnover of Rs 600 million in the next one year and a breakeven of Rs 1.2 billion. If you do the math, they are expecting at an optimistic level, approximately Rs 800 as average revenue per user, per year. Considering current DVD rental rates in Bombay, thats an average of between 1-2 movies a month.

The title list currently has 16,000 titles (no mention whether across all stores) including Marathi, Gujarati, Bengali, Bhojpuri and Punjabi with the addition of South soon. The cost of infrastructure per store is pegged at approximately Rs 22 lakhs and multiple channels of delivery include phone-ins, internet, SMS and ye old delivery boy. Apparently everyone in the industry has read some study stating the home entertainment business is expected to grow between 30-35% p.a. The industry itself is extremely capital intensive and a logistical nightmare to support. Showtime does have the advantage of already having a petri-dish to base its operations on (its services are well known in atleast two of its operational areas in Mumbai that I know of ( Bandra-Andheri)), but faces tough competition from the recently de-cloaked Big Flix, Moser Baer, SeventyMM, Bit-torrent and my pirated DVD cornershop (who also does home delivery and movie reviews). More on Nimbus online plans here

PS: Can’t help but notice from the logo units, Showtime = Blockbuster (NYSE: BBI), Big Flix = Netflix