Madhouse.in February 6, 2007
Posted by Pallav Sharda in : Movie Rental , trackbackMadhouse is the second player in the nascent netflix-inspired movie rental startups in India.
Madhouse launched may 2005 in the Chandigarh area. Their apparent success and recent first round of funding (about $230,000 from Band of Angels, Delhi) has inspired foray into the Delhi region recently. Their business plan is (almost) like that of US-based services (Netflix, Blockbuster etc), and the plans start at Rs.199 (with Rs.395 as deposit). The two key differences from US-based services are: One, the movie queue can be maintained via phone/sms/email in addition to online. Second, the delivery is not by mail, but through courier. So instead of just finding the movie in your mailbox, a person actually hands them over to you.
The viability of a online movie-rental business depends on reducing the biggest variable cost- delivering the movies. In India, the most reliable way for this is hand-delivery and it makes me wonder how cost effective is that going to be in the long-term. People (specially in the chaotic, unpredictable Indian lifestyle) would constantly have mismatched delivery/return schedules. That would lead to 1.) higher cost and 2.) diminished overall collection at a given time, both will cut into the margin for Madhouse.
I’m not pessimistic about the overall business idea actually. Like many other domains, this too is one that can’t escape an IT makeover. Sooner or later, India will reach the minimum threshold of infrastructure (and attitude) that makes such online business models viable. But I’m not sure if that time has arrived yet. It’ll take the bold attempts of similar businesses to pave the way.
What doesn’t kill you, only makes you stronger.. Hope that madhouse survives the anguish of being an early player.
Update: Seventymm acquired Madhouse.in June 2007.
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