MUMBAI: Faced with a home video market that is facing the heat from piracy entertainment companies like The Ultra Group are looking to diversify to increase margins. The Ultra Group is looking at the kids retail sector in a big way with its brand of Ultratoons Clubs.
Speaking to Indiantelevision.com The Ultra Group MD Sushilkumar Agrawal said, "Our business plans complement one another. We are planning to open 50 Ultratoon Clubs this year. The first ones will be opening in a few months time. Kids will get a privilege card which will entitle them to discounts on CDs, VCDs and DVDs. There will also be toys, gifts and greeting cards." This ties in well with Ultra‘s plan of entered the Greeting Cards business.
It is in the film production sphere though that Ultra is banking on. As had been reported earlier by Indiantelevision.com in the past Ultra made two films Yash and Chhota Sa Ghar. Now it has made two films Chor Mandli and Ek Hi Rastha. They will be released in August and September. The aim is to produce six films. Depending on how they fare Ultra will decide on taking the business further. The company has sunk in Rs 200 million on production and distribution.
Piracy squeezing the home video scenario: As far as home video is concerned Agrawal noted the menace of piracy saying "The home video market while being big is mainly controlled by the piracy. Official business is in the region of Rs 1.5 billion. This does not include the South as figures are not available. Our share will be a little over 20 per cent. The piracy though may be worth Rs 8.5 billion.
"This is just an estimate and piracy may be worth 10 times that. Piracy has become diffused as it has gone into small localities. While home video growth may be in the region of 10-15 per cent if the piracy is unchecked that market may not experience any grow." He concedes that it is also difficult to stop cable operators from showing films illegally. Agrawal says that 85 per cent of Ultra‘s home video business is Bollywood based. It does not have any tie ups with any international studios but does import films from independent film companies like Carlton and Keystone.
This contributes to 10 per cent of the home video business. In terms of growth factors he says that while VCDs have grown the market the DVD growth has not been over 10 per cent. It could become 35-40 per cent of the total home video market Agrawal opines in a few years time. For that to happen the prices need to come down and retailers in the interior parts of the country need to understand the concept.
Home video for TV shows non-existent: Agrawal goes on to state that the television market for home videos does not exist. Only Ramayana and Mahabharata have fared well. The others have not clicked. Viewers are used to free content. Even in sports the market apart from WWE, which Ultra sells is limited as viewers want to see cricket live. The past has no interest for them.
As far as buying the rights for films for television are concerned he says that on an average the acquisition costs have not gone up. "We do not acquire the satellite rights for films. We acquire the cable and home video rights. Recently we acquired a title for home video. It was not hot at the box office but was critically acclaimed. It is My Brother Nikhil."
As far as setting up a digital distribution network is concerned he declined to give details saying that it is in the initial stages. Also in the area of film distribution it will only distribute Keystone Library of films, which it had acquired last month in Mumbai. "Nobody has exploited this market. That is why it is small in size. Only after we see the performance of the first five films can we judge the market potential."
