Business - The Moser Baer way

Moser Baer has been one of the single-largest drivers of DVD sales in India. The company entered the business just 15 months back, but today its CDs are available in more than 70,000 outlets.With presence across large stores like Planet M and Crossword and even grocery shops — grocery shops contribute to 30% of revenues — Moser Baer can be credited with giving DVDs an FMCG-like status. Explaining the logic grocery sales, Harish Dayani of Moser Baer says, “If you can sell a chocolate or food item worth Rs 40 or Rs 50, why not a DVD? Besides , chocolates give the grocer a margin of only 10%-12 %, whereas DVDs gives him a margin of 25%.” For the producers of blank CDs and DVDs, getting into the movie DVD business was a natural process of forward integration . “Home video in India was growing at a normal rate; we gave it a fillip. Piracy was always contributing to the growth, but the legitimate industry was not able to pick up because of the pricing. By giving consumers a value proposition, we have helped curb piracy to a great extent,” Dayani says. Moser Baer recently launched a Super DVD, which has three movies on a single disc. These discs will be priced at Rs 45 in the case of old movies and Rs 50 if it’s a combination of new releases. By virtue of its pricing, Moser Baer has no interest in the rental business. “If you can sell a DVD for Rs 40 or Rs 50, what is the point in renting it out — the earnings will be hardly Rs 10 or Rs 15. The logistics issue and manpower problems are all avoidable ,” Dayani says. Moser Baer also has a website where consumers can order from over 10,000 titles. Dayani is bullish about the business and doesn’t think there’s any cause for worry for another two-three years. He does, however, see movie downloads as a definite threat. “That is still some years away. We will create a business model to deal with it when the time comes,” he says confidently.