Nimbus plans to invest Rs 1.5 bn in home video biz

MUMBAI: Nimbus Home Entertainment, a wholly owned subsidiary of Nimbus Communications Limited, plans to invest Rs 1.5 billion over three years as it targets a nationwide presence in the home video segment.

A bulk of the investments will be towards movie content acquisition. "Content will take away 50 to 60 per cent of our investments. We have currently entered into annual licensing deals with most of the content owners," says Nimbus Home Entertainment COO Sanjay Sharma.

Though the spotlight is on Bollywood films, the company is also aquiring regional language movies. Nimbus boasts of already having access to 16,000 titles. "We mainly have Hindi movies. We also have Marathi, Gujarati, Bengali, Bhojpuri and Punjabi titles. Besides, we have world cinema titles," says Sharma.

Nimbus will soon add Tamil, Telugu, Kannada and Malayalam movie into its portfolio, elaborates Sharma.

Marketing will consume Rs 500 million over three years. Nimbus will be spending on cross-promotional retail tie-ups, customisation of offers and store-centric activities as a part of its marketing initiative.

Nimbus has launched its first four stores and eight distribution centres (stock points) in Mumbai and will now be expanding to Chennai, Hyderabad, Bangalore and Pune.

The plan is to open 140 stores in 40 cities over the first year. "We are targeting 120 cities over three years. We will be having over 240 Showtime Video stores. We are also looking at the franchise route. Besides, we are in talks with big retail chains to have a tie up with them," says Sharma.

Nimbus Home Entertainment will operate under the Showtime brand and will offer DVD rental and sale services with an online and offline presence.

"We want to initiate customer participation. By providing services to them through our stores, distribution network, SMS system, phone-ins and even with our delivery boys, we will be bringing in more choices for the customers. We will also try to help them in deciding what movies they want to take for viewing," says Sharma.

Nimbus hopes to rope in 500,000-750,000 subscribers in the first year. "We expect to have 3 million subscribers by the end of the third year. We will have 15-20 per cent market share," says Sharma.

Nimbus expects a turnover of Rs 600 million in the first year of operations. "We will operationally break even when our revenue touches Rs 1.2 billion. The operating margin in this business is 35 per cent," says Sharma.

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