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Every week we hear of yet another India specific Social network being setup and launched. Many of them with big media budgets and deep pockets - throwing a slew of TV advertisements at us.

Some of it just doesn’t make sense. Are we going back to the Bubble1.0? Or is there a true hidden pot of gold at the end of the rainbow, this time around. I wonder.

My reasoning tells me that they are trying to quickly gain loyalty from the initial influx of members - and plant the seeds of their viral growth before others snap up these people. By getting an initial seed market share, they will be able to grow virally and quickly once they achieve the tipping point - and once people become part of one social network with their old and new friends, they will be less likely to shift away or fit in with another Social Network - offering the same features.

The true value is in the users “social network”- and not the features being offered by the service (although features and GUI are important here, they dont play that much of a predominant role in the long run). The key to success, is to quickly garner up enough users, reach the tipping point quickly and grow exponentially thereafter.

The technology that powers these Social Networks is pretty basic to develop, and if you have a few thousand dollars to spare - you can easily purchase a very stable tried-and-tested out-of-the-box “white label” commercial solution that will get you up and running in as little as 48 hours. These white label solutions are as powerful and feature rich as the leading global social networks. You can find a list reveiwed by Techcrunch here or a detailed list here. My favourite white label ready-to-go solutions are, in no particular order of priority -

• Affinity Circles
• Crowd Factory
• Small World Labs
• Sparta Social Networks
• PHPizabi
• Leverage Software
• Kwiqq

There. Now, the technological secret is out of the box So, next time someone tells you how complicated the technology is to put together - its not. Its easily purchasable and is, infact pretty non-complicated to develop. For the record, I recently hired 3 interns to develop a Social Networking Solution in 3 to 4 months flat. Also, I do have reason to believe that Rediff’s new ishare media sharing service uses a packaged white label solution by Kickapps (atleast it looks very similar).

Given this scenario of low barrier of entry, that allows any mom-and-pop garage run show to enter the field, I wonder which of Indian Social Networking players are justified with their big media spending strategies. After all, Friendster was once upon a time the first mover with the biggest name in the Social Networking industry - but is now failing miserably as users flock to the other offerings.

As a second part to this post, I will review the players in the Indian market, including the overseas global networks like Orkut, Facebook, Linkedin etc. that are spreading like wild fire amongst Indians. I will base my review purely on readily available stats and research. You may read the second part to this post here.

— Vishal Lamba    Filed under: Uncategorized | No Comments »

I recently wrote about the ZapakMail venture being a terrible move by Reliance - a very high cash burn with not much value add. It just didn’t make any sense to do, and Alexa ranking and traffic figures confirmed my point. There’s not much value in providing a “local” flavor of web mail.
Now, Indiatimes has joined the bandwagon by relaunching their webmail offering. Apart from a flashy TV ad that really doesn’t mean much, their service boasts unlimited space and with dazzling new Web2.0 features.

I don’t care how good or catchy their TV ad campaign is and who they hired to make it, but this service is not going to catch on like wild fire - as depicted in the TV advertisement. Gmail, Yahoo! Mail, Hotmail and Rediffmail (to some extent) - have been around for eons in Internet time, and have already spread wide and far.

The Indiatimes webmail service also features some supposedly new catchy and useful offerings. Apart from having unlimited storage space (something they should’ve done 18 months ago - to counter the traffic migrating to Gmail and then other unlimited webmail offerings) - they’re claiming to have useful features like shopping, purchasing air tickets, accessing Wikipedia and even playing games - all without leaving the webmail page!

Give me a friggen break!

Who in the world would want to do this… other than a random few people who click on it out of sheer curiosity. The team behind the Indiatimes Webmail strategy, have not only woken up 18 months too late (with their unlimited webmail size offering), but have also not understood the basic fundamentals of the mindset of the Internet user.

People access webmail to read and reply to email messages. Thats the very basic reason we go to our webmail box. If we want to go to Wikipedia - we will go there directly.

Sharing of documents is something of an add on and may have some degree of overlap with email… being an online storage model - but allowing email users to access Wikipedia?? shopping services?? games??

I really dont think they are going to successfully push email users to gaming content, or wikipedia, or to purchase tickets. If users want to d othese, they can directly navigate to the vortals. I just dont see any value add in doing this, or did i miss something?

— Vishal Lamba    Filed under: Uncategorized | No Comments »

An oligopoly of 4 matrimonial sites is dominating this market and controlling probably 90% of it. Matrimonial sites tend to be of serious nature - and people and families that are less conservative are targetted by the service providers. The typical user of online local and dating services is not the right target user and visitor to these sites… but there maybe just a very small fractional overlap.

The four front runners are - Shaadi.com, BharatMatrimony.com, Jeevansathi.com and SimplyMarry.com. The first 3 have been around for 8 to 10 years now. Shaadi.com was intially Sagaai.com, and Jeevansathi was purchased by Info Edge a few years ago, the folks behind Naukri.com. SimplyMarry is TimesofIndia’s very very late move to break into this market. Known earlier as timesmatri.com - which apparantly is terrible choice for a name - my guess is that they switched over in an attempt to create a better brand and name. Who does not remember the wildly popular and successful Sunday 4 page matrimonial print insert that came with the Sunday Times. I guessed that TOI was making around Rs 20 crores every week with it. Why they took so long to switch over to and supplement the print version with an online version and promote it heavily is something I fail to understand. Specially when BharatMatrimony and Shaadi advertised within their print editions. Also, the Times Group has been one of the front runners in the Internet digital space - quickly setting up the Times Internet division and launching Indiatimes.com very early on in the dot com days. Not moving quickly and aggressively into the Matrimonial space has cost them dearly now. Perhaps they were happy with the print matrimonial edition’s revenues, and saw a self launched online version more as a threat and conflict of interest with their successfull money making print version. They probably saw the “trust” that they built in the print brand over the decades, being broken in some way by an online version - if the online version was marketed very aggresively.

So, where we stand currently is that that there are 3 close front runners running neck-to-neck  and then there is SimplyMarry.com - coming in a distant fourth.

Whats interesting here is that traffic to all the 4 sites has been declining over the last 12 months (see the alexa link above). My guess is that there is still a lot more potential - but suddenly a lot of people visiting these sites have been exposed to more choices of Indian flavoured social networks - that are a totally free way to meet other like minded individuals. Add to that the entrance of popular social networking sites like Orkut, Tagged, and now Facebook. Suddenly the non-traditional conservative single can build a network of local and global friends - for fun or dating … and there is always the thought of “marriage” in the back of their minds - if they feel they “connect” with a potential spouse.

Because the spread of the Internet is no where near saturation point in India, these 4 services will continue to be popular and make money… because of their very large  “singles looking for lifepartner” databases  - which is their most prized asset.

The only issue and danger, in the long run, would be a gradually eroding Indan culture being eaten up by western cutural invasion through globalization and media. If desis gradually move towards the dating game or live-in concept, the online matrimonial market may take a hit. But, we’re still decades away from that. But, if and when it does happen, they may find themselves in the same boat as the once highly successfull, but now steadily declining Match.com - that is losing all its traffic and revenues to the Web2.0 Social Networking wave, thats free to ride - for anyone and everyone. 

— Vishal Lamba    Filed under: Uncategorized | 1 Comment »

This post is a response to something I just read on Techcrunch, and wanted to write about. Sometimes, I dont understand the rational behind some of the decisions by the people incharge of some companies. But, thats because I probably dont have access to past data and statistics and the in-depth research that they have.

Now, Amazon beleives it can make the “fresh-produce home-delivery” model work this time around with “Amazon Fresh” - almost 6 years after Webvan failed miserably with the same model… even after Webvan went IPO and rapidly expanded into 26 cities all over USA. The business model is exactly the same, with absolutely no hint of a Web2.0 angle - because there probably isn’t any. For those of you who were sleeping during Bubble1.0 - Webvan tried to build a huge profitable empire by delivering fresh produce to doorsteps of people who placed their orders online.

Webvan was somehow able to fool a lot of people (their VCs and the public) into believing that they had a very hot model and business all in place and only needed a large amount of cash to quickly expand into 26 cities. Some people say they grew too big too fast, and they never bothered to wait and see the success of their model in one city before scaling up to so many. This is completely unlike the Walmart model, which has grown organically from store to store based on their replication of the complete profitability and workability of their first store - and is now the largest company in the world!

Amazon has already been experimenting and delivering non-perishable items over a year ago. This time users can place orders online and pick them up themselves locally - or if the order is of a minimum amount - Amazon will drop it off anytime within a one hour timeslot at the customers place. Groceries will be delivered in temperature controlled environment.

The first thought that comes to mind is that Bezos has definitely got something up his sleeve. Amazon was an investor in HomeGrocer back in Bubble1.0, which was acquired by WebVan. So obviously Bezos has access to some stats which we dont. No doubt, there are similar locally run models in a select few cities which are working well. But I dont see the high-returns in this business. Perhaps it will come with scale?

By going back to build something that failed so miserably in the past - its a big risk. But, perhaps he wants to foray into a bigger service eventually - ultimately delivering a whole gamut of perishable items, medicines, tickets, FMCGs etc. Perhaps Bezos is eyeing an oppportunity to become a “Walmart-to-your-doorstep”? I really dont know. But, given his past acumen, he’s definitely up to something bigger.

Maybe they will build in a social shopping angle, and friends can ask friends to pick up and drop off stuff for each other earning points in some sort of barter-help mechanism.

— Vishal Lamba    Filed under: Uncategorized | No Comments »

A recent comment in response to my posting that spoke about substandard games on Games2Win, requested me to go to Games2Win and play some more games - in hope of re-evaluating my views on the quality of the content. The commenter excitedly listed 3 games that he/she thought were of stellar quality. I took up the offer and decided to play 10 random games (and later included the 3 the commentor mentioned).

Here’s the result of my experience…

Game: Pizza Passion
(time in 10:53am - time out 10:55am)

This game is really pathetic. Whats the fun in clicking the mouse button once on the pizza each time? I have a whole keyboard at my disposal here - and i dont have a chance to use it? Perhaps this would do so-so if it was launched in 2000 on the mobile phone, when one-button games had some gameplay value. Overall Rating 1 / 5

Game: Carbon Auto Theft
(time in 10:58am - time out in just about a few 5 frustrated wasted minutes)

I like the way they’ve sadly tried to mimic the GTA title. I’ve not even started playing the game and already sense mediocre content coming up. I still cant figure out why they’ve put a one liner when i click on “Story”? The story is “You are the best car theif in the country, steal your way to becoming the best in the world”. Just how long did it take them to come up with that story? Couldn’t they, at the least come up with a more descriptive plot or story line, to at least create some fantasy in the players mind?

About the actual gameplay - one word … ”substandard”. The instructions are poor and the objectives are confusing. The learning curve versus difficulty is way off balance - as the first level (to a new player) is way too diffcult.  Overal Rating 1/5

Game: Bombay Taxi
(time in 11:15am - time out in about 10 somewhat frustrated minutes)

Good presentation and graphics. Gameplay is somewhat good. But the problem here is with the keys. Its hard to co-ordinate keys as their functions get sort of reveresed in forward-vs-backward movement. There is some addiction factor in the game, that comes out of the frustration of crashing while parking, but I dont see this game having much of a return-replay value. The few players who get hooked will probably play for 20 to 30 minutes or so - but it is my opinion that they probably wont bookmark this, to come back later. There is probably a little bit of “fun” in this game… but its just not enough. Overall Rating 2/5

Thats it, I cannot waste any more time on this website. My Parting shot - I noticed a flash banner on the website saying “run before you get molested by the living dead!” hmmm.. molestation is probably not the right word to use here. Although, it does also mean to “intefere” or “annoy” or “disturb”, apart from “sexual assault” - it is my guess that people are accustomed to associating it with sexual molestation, given the various incidences being reported in the media. Games2win, please change it, if you are reading this!

— Vishal Lamba    Filed under: Uncategorized | 1 Comment »

I still dont get it. While I admire Rajshri andPNC for being bold enough to offer entire bollywood movies as paid downloads from their websites, I still dont see the business sense in doing so at such a high price.  While it does make some sense to simultaneously release in Theatres and Online - to satisfy immediate cravings of Bollywood fans world over - specially for over-hyped movies, I dont see this working as a good money spinner for movies that have been around for a long while - and not at the price of $9.99 to $14.99.

True, they will reach Indians all over the globe who want to so desperately see Bheja Fry, but would desis cough up $9.99 to $14.99 for digital download versions, instead of purchasing a physical copy that they can cherish and keep on their DVD shelf? Would you pay $14.99 for a bunch of bits comprising a 400MB to 1.4 GB file size that you will probably delete to free up disk space in less than a year?

Also, the download will probably take the average broadband user at least 5 hours to download, but information on the Bheja Fry page on Rajshri.com says 1.5 hours download time at a 1 mbps connection - which is correct… but just how many people have a 1 mbps line? I didnt try to do this download - but if Rajshri’s servers are hit hard (which is highly unlikely - causing the downloads to crawl and probably take over 24 hours to happen).

It also just doesnt make any sense to me as to why Rajshri insists on inserting pesky popup ads and jarring ads even while showcasing paid products. Please spare us the ordeal of having to close your screensaver ads if you want us to buy your digital download.

The fact that Rajshri has cluttered their entire site with Google Adsense ads and popup ads - goes to show that they are not making much money at all with the paid model, and hence have to resort to other means.

Further, I dont want to encourage piracy here, but 700 mb versions of Bheja Fry and many other Bollywood movies are available readily on Bit Torrent sites for a long time now - and will probably download within a short span of time owing to the distributed P2P downloading nature of the Bit Torrent system.

My take - Rajshri should make a bold move and offer a whole bunch of bollywood movies for completely free download. These should be compeltely ad supported - with maybe about 3 minutes of ads for every hour, and having a premium sponsors logo appear in the top corners, and also probably consider having an ad-bar strip appear at the bottom - like you see on those local cable tv run channels. These free movie downloads should also contain ads that talk about Rajshir’s upcoming or premium subscription service - to which users can subscribe on a monthly basis and get access to x number of downloads package. (watchout senventymm) . They can also use these free versions to advertise movies that are available as a paid download. But, please please dont make the mistake of pricing it at $9.99 to $14.99 - specially when this is something so new for most of us. Bring it down to around $2.99 per download for ad-supported content. And yes, if the movie DRM file does get cracked and passed around on torrent - atleast the advertisers will benefit. So, thats a good pitch for the advertisers. Lets not even get into the topic of superdistribution here, as Rajshri can struggle with that later.

For those who are not aware, “superdistribution” is a highly viral way to get your digital content out by encouraging purchasers to share the content further by recommending it to their friends in exchange for a small slice of the revenues earned by further marketing it to others.

Rajshri has also been recently misquoted by Business2.0 as the Youtube of India, as we can all very well see that they do not have the slightest hint of Web2.0 anywhere on their website.

I think Rajshri is making a move that is somewhat in the right direction, but needs tuning to work - in price and methodology. They certainly have the content, but do they have the intelligence and guts to be the first risk takers? Their Alexa ranking has been dropping as the inital “new hype period” passed by in April 2007, and since then the traffic has been on a steady decline.

Quoting a much tired and wired cliche: content is King, but distribution is King Kong.

— Vishal Lamba    Filed under: Uncategorized | No Comments »

This is a tough one to answer, specially because I am a “multiple revenue streams” believer. On the face of it, it looks like People Group (owners of Shaadi.com, Mauj and Fropper.com and backed by Sequoia Capital) are trying to cross-sell a new service and offering to a large database of their current users with their pulse on their close approaching IPO .

Yes, they will surely get an immediate spike in traffic, users and listings - specially if they (or Sequoia) back it up with a fairly large media launch budget. Whether they emerge as a winner, or a top contender in the online real estate market will only be seen in the long run. The competition is very stiff - and their entry is probably about 18 months too late. My take - its going to be *very* hard to play the catchup game.

I cannot write about the quality of the service or the business model - but my guess is that it will be above average and well thought out - if they have hired the right experienced professionals from the other existing real estate dot coms. If they try and experiment with this baby and take their learnings from Shaadi or Fropper across over to this - then they better be careful. Its not the same ball game.

If you look at this 1 year Alexa graph of their 3 most prominent ventures (Shaadi.com , Mauj.com and Fropper.com ) you will notice that the traffic to these destinations has gradually been declining very significantly. This is probably due to emergence of new dynamic competition. While they have enjoyed an early mover advantage - and grown quickly - recent B2C traffic levels and thus probably revenues also have been on the steady decline. My reasoning tells me that - this is because the average online Indian Internet user has now suddenly so many more competing destination choices than what he did, even just about a year ago.

I am sure that the Shaadi.com model is very successful and their biggest money spinner so far (not sure how Mauj is financially doing in the mobile space) - but if People Group’s IPO happens this year - we can all then take a peak inside the company’s financials. Or, wait, maybe I can just have my guy hop over to the Registrar of Companies and get an official report of their filed returns?  Hmmm.

Going back to Makaan.com - I think its an attempt of People Group to list yet another online venture prior to going public later this year, in the hope of increasing their perceived value to the public. The timing is right, as any new venture will have that initial growth and blip in traffic - making things and growing projections look all rosy and nice for a few months - which will no doubt have a huge impact on their IPO !

But, lets put the IPO aside and see if they really have the mettle to compete with the big boys who are already in this space (99acres, IndiaProperty, MagicBricks). I’ll come back and write about them in 12 months… but my verdict for now is - good move for IPO, good move for short run growth, but very very tough race in the long run - and thus, I see it coming a distant 5th or 6th in this vertical - and thus generating very minimal revenues and profit for People Group in the long haul.

— Vishal Lamba    Filed under: Uncategorized | No Comments »

The August 2007 issue of Business2.0 made me question the credibility of the sources from which Business2.0 got some of their data. I’ve always thought the data and articles presented in this magazine were highly credible, but a couple of things mentioned inthis article will now make me think twice. I’ll shoot off a letter immediately to the editor and await his feedback.

Page 75 is a fold out section titled “It’s a Web, Web, WEb 2.0 World”. They’ve basically listed 10 world shaking business models - and their clones that have sprung up globally. Being familiar with the Indian Web2.0 industry - I was not happy to see some of the listings out of India, and they are very questionable.

For those readers who don’t have access to the print edition, you can see the online version here. The print version starts by saying that they began this years roadmap of international Web2.0 sites with an initial list of 90 sites and then boiled them down to 32 most important not counting the Web2.0 clones mentioned on the back of the fold out.

The writer(s) have messed up in both the short listing as well as the clones list. In the shortlisting of 32 international sites - they have included khichdee.com classified ads site in India which is probably falsely claiming to be getting 4500 new classified posts per day. Pixrat and Burrp were the other 2 listings from India on the global map and in this first section and are defintely justified and apt - other than the fact that Burrp probably inflated their traffic figures. (question - does anyone know how much traffic Pixrat is generating? I know its been gobbled up by the MIH guys and is not part of ibibo.com - but i was just curious).

The second part of the fold out article was titled “Send in the Clones“, and this is where I had my conflicts. The print section has a table listing local knock-offs of global Web2.0 models, telling readers to save this clipping for their next business trip overseas. This should not have been said by a magazine that is part of the CNN group, unless the data was accurate - because they are now completely misleading business executives.

Here’s whats wrong…

Basically, they’ve got a table with 4 wildly successful global Web2.0 models namely Digg, Facebook, Linkedin and Youtube - and their clones in various countries of the world. Since I am familiar with the local Web2.0 sites here in India - I can firmly state that the Indian data is wildly inaccurate. These are the Indian local sites that Business2.0 has listed as being notable.

Indian Digg clone - www.bestofindya.com
Bestofindya is nowhere near a digg clone - not in traffic or content. They’re hardly getting 5000 page views per day, and many stories are not Indian themed. I dont think that this site can ever get anywhere near the cult status that digg has with its users. Also, the site has been setup using the opensource Pligg script. Not that I am against opensource - just stating a fact that this can be hacked together by a 15 year old with no programming knowledge and experience, and stories can be added by a few people to kick start the UGC and SEO traffic. Anyway, if this is the best that India can give - then we have a long way to go. Either that, or Business2.0 needs to buckle up their research. If you really want to see a popular Indian digg clone - see IndianPad.com - their traffic on Alexa keeps soaring... and they’re probably getting over 250,000+ page views per day (I wouldnt be surprised if they’re even doing 500,000+… now, this is a site Business2.0 should’ve listed instead.

Indian Facebook clone - www.minglebox.com
Minglebox is not a platform in the true sense as Facebook is. Its more like orkut or myspace, and anyone who uses these sites can tell. If the writer was talking about social networking clones like orkut and myspace - I don’t have to say anything about the local clones in India - as most of you already know that there are plenty of them in India… and the competition is heated. Minglebox has the advantage of being backed (albeit controversially) by the local Sequoia guys - and thus has the deep pockets to grow fast. But we all know that there are many others out there in the race…including Bharatstudent, Bigadda, Campus18 etc.

Local Linkedin clone - connexions.rediff.com
This is probably the only correct listing. But, I don’t really see this working as successfull venture for rediff or being an effective networking tool for its members, as business today is done globally - and Linkedin has achieved the winner-takes-all status, completely knocking out other business networking competitors including openbc and ryze. I really dont see the long term value in going through all the trouble to sign up and invite your local acquaintances and associates to a local social networking service, when a global network can do all this for you AND provide networking opportunities at a global scale. On a side note: a good local technology networking site for professionals is techtribe.com - but its mostly for tech professionals and is used a lot for job hunting and finding the right talent for companies… and so, it probably did not meet the criteria.

Local YouTube clone - www.rajshri.com
This one is way off!! Rajshri.com is nowhere a “video sharing site”. Its a site run by Rajshri Media, showing and streaming their self produced videos. There is absolutely no feature allowing users to upload their own videos and share them with the community… or make Channels and Groups and interact with other video creators and viewers. No commenting. No voting. I have no clue where Business2.0 got this one from. There are quite a few existing Indian video sites, so I dont know why this was selected as the best amongst the lot - when it definitely does not qualify to be a Web2.0 model.

I cannot say for certain how (in)accurate the other country clone listings are - but my guess is that about 1/3rd of them are inaccurate and this research and editorial was definitely done in a hurry. Shame.

— Vishal Lamba    Filed under: Uncategorized | 22 Comments »

They wont. Atleast not now, and not for the next 4 years.

Why?

Because, firstly Video Movie rental in India is not big business by itself. So you can forget about taking the model online and making big bucks. Mail order and postal rental systems are the way of life in America. People participate in “mail rebates” and get excited with finding bargains by mail. I dont think the general population in India has seen this trend as yet. Its just not something we as a nation have done, or are participating heavily in currently. I can understand the rush and excitement of the founders and funders (Sequoia being one) in replicating the success of the overseas models like Netflix in India - but I firmly don’t believe this is a good bet and this cannot make large ROIs. And, defintely not the Rs 500 crores revenue that Seventymm is has reported and is planning to make in 5 years with 1 million customers. These are just rosy projections with much little thought.

Before I move on some quick math…

Lets assume that Seventymm does reach a customer base of 1 million subscribers say, each at the least subscribing to the basic “Hit Pack”.

The Basic Hit Pack costs are as follows -

Registration Fee = Rs 199 x 1,000,000 = Rs 19,90,00,000 or Rs 19.9 Cr

Monthly Fee = Rs 199 x 1,000,000 = Rs 19,90,00,000 or Rs 19.9 Cr

Refundable Deposit = Rs 999 = Rs 99,90,00,000 or Rs 99.9 Cr

So, are these figures mathematically correct and do they add up to the Rs 500 cr revenue thrown at readers? Yes, Rs 500 cr is mathematically right… Assuming that they get to 1 million subscribers monthly they will/can accrue over Rs 20 cr x 12 = Rs 240 crores every year thereafter. Plus at the least 10% annual interest on the deposit of about Rs 100 cr ( I like that) - but sincerely feel there should be no deposit as it adds a barrier to subscription. Also, they should consider free trial membership like Netflix does.

My next question. Is the 1 million “paid subscriber” mark feasable? My answer to that - a big bold NO. Its completely way off. Even Shaadi.com, Bharatmatrimony.com and SimplyMarry.com probably just have that many PAYING subscribers each - and that too for a service that is far more mass market and value driven than subscribing for DVDs online. (For example, Shaadi probably has about 10% to 15% conversion rate - from free to paid members - resulting in about 500,000 to 750,000 paid members (from a total base of 5,000,000 members). This would be for ongoing monthly subscription - probably not as permanent and long terms as for a movie rental model - but then the subscription costs 5 to 10 times as much, so it would balance out. But, the issue here is not with the subscription fees - its the numbers. They just dont match up.

Is Seventymm justifed when they throw a figure of 1 million paid subscribers for a online Video rental service? Absolutely not.

Another supporting piece would be a direct comparison with Netflix numbers. Netflix has taken 10 years to achieve the 6 million member mark. Compare that to the folks over at Seventymm - who want to achieve 1 million in 5 years. I can bet you Netflix probably reached about 2 million in the first 5 years, and 60% growth has come in the second set of 5 years. So, the math is again on the table. Can Seventymm achieve half of what Netflix did in the same amount of time (5 years) in a market like India. I dont believe the VCs did their homework here. Unless, I am missing something, or they have a strategy that sounds like this - “hey here’s 100 million dollars for India - find one company each in the following busienss models…”

Also, there is no “Blockbuster” retail model equivalent in India. Maybe, Shemaroo is somewhat doing that, but people here find it much more economical and convenient to pickup a pirated set of 4 movies on a DVD for Rs 100 or a pirated VCD for Rs 50, on their way home at the train station or bus stand. I’m not encouraging piracy here - but i’m simply saying that these online models are going after a market thats going to be hard to capture. People don’t see buying a pirated movie on the streets as any big crime and its accepted and “chalta hai”. With the government and police not doing anything about the open selling of pirated stuff - I don’t see things changing in the near future.

Also, Netflix.com model offers the variety of movies found in “the long tail” of the spectrum - which consists of a large chunk of rentals. I don’t believe Seventymm is addressing this market spectrum, at yet.

So, any investment into promoting these ventures is going to be highly risky in my opinion - and will need to be sustainable for at least 4 years.

This poses another problem. In another 4 years, the pipe-size of bandwidth is going to increase many fold… as fiber optics comes into homes… and that is going to be completely disruptive for all the folks in the online physical rental-delivery area.

A whole new era of streaming video-on-demand will spring up, and streaming video into household IPTV’s will be commonplace.

What happens then, to all that physical inventory that these online physical rental business models and delivery logistics systems that these models invest so heavily into?

I’m sure the players in India in this area - ClixFlix, Seventymm, Cinesprite, Fusionrental - books and movies, Madhouse (merged with Seventymm), BigFlicks (Reliance upcoming foray) - have at some point of time looked at this threat and would be addressing it, but I don’t believe they would be investing as much time, money and technology to combat it - as Netflix has done abroad, and is in fact preparing itself to be a front runner even in the video-on-demand space. The players in India are probably going to first have to justify themselves into making the physical rental-delivery model a success. The only exception t othis rule would be Reliance’s BigFlicks venture. I see large possible overlapping synergies. Good move.
They will definitely have a certain strata of Indian society who will rush and immediately sign up for the service and pay the (large) deposits and monthly rental fees… but this model will not go mass market in India. There just aren’t enough target consumers in the Indian ecosystem. It just cannot be a Shaadi.com or a Naukri.com or any other online mass market portal - like online travel industry or real estate.

As always, I invite valuable comments from all my readers.

— Vishal Lamba    Filed under: Uncategorized | 1 Comment »

I still don’t understand CEOs and owners of companies who report inflated traffic and revenue figures to the media. It just isn’t good business and it will bounce back someday on their face.

Case # 1 - Khichdee.com 

A recent article on Business2.0 reported Khichdee.com getting 4500 new classifieds posts per day. Khichdee is claiming to be the Indian version of Craigslist.

Dream on.

They are no where near in site simlistic design, genuine posts and visitor traffic. Infact there are many other Indian portals with free classifieds sections and other desi classfiieds websites that are way better in design, authenticity of data and traffic numbers. Khichdee is just trying to cash in dismally low Google Adsense revenues in a publicity stunt (the site has jarring in-your-face Adsense image ads all over) - note: Craigslist shows no ads, and has a much simpler and uncluttered interface.

Case # 2 - Bharatstudent.com

In another report, another social networking site - BharatStudent.com has claimed that they “got” 1.4 million registered users within 4 months of its launch and 40 million pages views a month. Sheesh… thats completely the height of misrepresentation. The parent company is Northgate Technologies / Axill Europe Ltd. They’ve even cited some Alexa ranking figures. What they say about their ranking in Alexa is true - but there’s absolutely no way they’re doing 40 million page views per month or have already got 1.4 million registered students. I’d like to openly challenge them here. To see the truth - go see their traffic rankings and number of people compared to Shaadi.com - and you’ll see the truth. This is yet another example of media hype being created by false information.

Did they pull this to justify their funding of Rs 25 crores? I dont know what stats these guys are using. 1.4 million is 14 Lakhs. Thats probably what Shaadi.com and Bharatmatrimony.com took 5 years to reach. Its completely whacked out. They could NOT have done this in 4 months - no matter how much they spent on marketing. I don’t believe the ecosystem supports this kind of growth with already existing hugely popular Orkut and others like Fropper. I’m figuring Axill.com is an ad network - so could they have somehow miscalculated the statistics?

Case # 3 - TheBig.TV

And, just coming in is a report from TheBig.TV that they pegged over 400,000 visits in one single day for some video of theirs on the Abhishek-Aishwarya wedding. Nice try. A simple visit to the website will show you that most of the videos have a dismal number of views… so I dont know where these figures are coming in from. They claimed to have pulled a stunt by hiring Shahruk and other bollywood look alikes and asking them to attempt to gatecrash the Abhi-Aish wedding. This supposedly cost them Rs 80,000 to do - and they shot the stunt on video and then circulated the video online - and it grew virally attracting 350,000 visitors the first day and 400,000 the second day. This is again another media stunt. TheBig.TV traffic rankings are very low - not exceeding probably around 500 to 1000 page views per day - forget about 400,000.

— Vishal Lamba    Filed under: Uncategorized | 1 Comment »