Rivals up the ante to counter Moser move

With optical storage major Moser Baer kicking off a price war with its recently released 75 Hindi movie titles, the big boys in the industry are fighting back with a vengeance.

Moser Baer is offering older films at Rs 34 for a DVD and Rs 28 for a VCD and has even promised to do the same with new films such as the Sanjay Dutt-starrer Munnabhai MBBS.

Here is the action: T- Series, one of the oldest players, has recently cut DVD prices to Rs 45 on select movies and is offering a package of three films for Rs 75. Ultra has brought down the price of its old catalogues from Rs 300 to Rs 45 even before Moser Baer started the war.

"Quality products sell. We welcome competition and we don't see Moser Baer's DVD launch as a threat," said Mukesh Desai, CEO, T-Series.

"At the moment, we are watching the response to Moser Baer DVDs. By mid-May, we will consider revising our prices," said Atul Maroo, joint managing director, Shemaroo Entertainment. Adds Kumar Taurani, managing director, Tips, "If Moser Baer receives repeat orders, then we might have to consider lowering prices."

However, don't get too excited: The cost of acquisition could range from Rs 4 lakh to around Rs 1 lakh in case of old titles, while a new title could cost anything between Rs 1.5 crore and Rs 2 crore depending on the star-cast, songs, production banner and box-office success.

Recovery of the royalty on newer films is also an issue, said Susheel Pawar Agarwal, managing director, Ultra Group. He said, "Initially, the quantum is big but survival depends on repeat orders which are usually low so how do you recover your money if you cut prices dramatically?"

Ultra reduced its DVD and VCD prices two months prior to Moser Baer's announcement in December last year. Ultra brought down its DVD price from Rs 300 to Rs 45 for old catalogue titles.

On the other hand, T-Series has been running marketing and promotional initiatives on a regular basis. The latest being the 'Sun and Moon offer' : Under the sun imitative one can buy three DVDs for Rs 75 and under the Moon a single DVD at Rs 45.

CEO of Moser Baer, Harish Dayani is quite upbeat as the company's target is to acquire 50 per cent of the mainstream movie titles out of the 5,000 mainstream Hindi movies made so far.

He said, "At the moment, we have acquired 1,500 Hindi titles and may acquire an additional of 1,000 titles to achieve the target of 50 per cent market share." He added the response has been encouraging as the 74 titles were released via 450 distributors across the country.

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SPINNING DEALS

Moser Baer is offering older films at Rs 34 for a DVD and Rs 28 for a VCD and has even promised to do the same with new films such as the Dutt-starrer Munnabhai MBBS.

T- Series, one of the oldest players, has recently cut DVD prices to Rs 45 on select movies and is offering a package of three films for Rs 75

Ultra reduced its DVD and VCD prices two months prior to Moser Baer's announcement in December last year. Ultra brought down its DVD price from Rs 300 to Rs 45 for old catalogue titles