Home-grown business Spuul wants to be a kingpin of online Bollywood movies.
The start-up, which streams Bollywood movies to one million users, has started brightly despite being just two years old. Two-thirds of its viewers are from India, tuning in to watch the latest blockbusters on their PCs, smartphones and tablets.
To go after the global market, Spuul is actively looking to raise over US$10 million (S$12.4 million). Discussions with venture capital firms in the US, Britain and Singapore are ongoing, said co-founder and chief technology officer S. Mohan, 48. "The funds will be used to expand our technical infrastructure and team, provide marketing activities and let us acquire and create content," he added.
He is optimistic as the business has traction and the strength of the co-founders. Mr Mohan is a serial entrepreneur having co-founded two other firms, one of which is file-sharing solution provider called Accellion based in the US. He has raised more than US$30 million in funding for his companies.
Chairman and co-founder Sudesh Iyer, 59, has 35 years of experience producing Indian movies and TV programmes and setting up Sony Entertainment TV in India. He has tight links with the top 10 Indian movie and TV production houses. Chief executive and co-founder Subin Subaiah, 61, has over 30 years' experience in the financial industry.
Located in Tembeling Road, Spuul is adding about 30 per cent more viewers each month. Every day, it is streaming 1TB of content which is about 2,000 movies, said Mr Mohan. The firm has about 1,000 movies in its library. In the next six to 12 months, it expects to have about six million viewers. But its target is 600 million users in five years comprising viewers in the Indian sub-continent, Indian professionals and their families in other countries as well as Bollywood fans, he added.
The Indian market has potential as it had 137 million Internet users last year, a 26 per cent growth from 2011. Fifteen million broadband connections were added between January and May this year.
Spuul has a "freemium" model, in which it is free to sign up but people pay a fee for premium features, with dual revenue streams of subscription and advertising. About 70 per cent of its viewers watch the handful of free movies and TV programmes available each month while 29 per cent pay US$4.99 a month to watch its library of about 1,000 titles. Any viewer can also "rent" for 72 hours a special title, usually a blockbuster, for 99 US cents to US$2.99.
Online streaming of movies or what the industry calls Over The Top (OTT) service - the business Spuul is in - has been popularised by YouTube, which today has about one billion viewers watching home-made movies as well as professionally produced content. According to online magazine AllThingsD, YouTube could have generated US$3.6 billion in gross revenue last year.
Unlike TV which has a fixed schedule, OTT lets viewers watch content at their leisure anywhere, using a computer, a smartphone or a tablet. However, TV studios, broadcasting stations and pay-TV providers including StarHub and SingTel are starting to offer their programmes on-the-go too.
But the difference, pointed out Mr Mohan, is that pay-TV providers have only a few channels and a handful of fresh titles a month whereas Spuul has 1,000 titles of musicals, romance, thrillers and other genres. Spuul has competitors in India like BigFlix and BoxTV but none has its breadth and depth in terms of content. It will also collaborate with TV channels to provide prime-time content on Spuul almost immediately after the broadcast.
Going forward, Spuul wants to produce its own movies, capitalising on Mr Iyer's experience.
Spuul's CEO Mr Subaiah said it will keep adding new features to make it convenient for its viewers. For example, it launched a new feature today, called Offline Sync, which lets customers view content without being connected to the Internet.
OTT services, however, have not been proven in Asia, said senior analyst Clement Teo of Forrester Research. "To succeed, it needs exclusive content and customer engagement. For example, its website must be easy to use so that viewers can quickly find what they want to watch. This would help in customer retention," he said.
Research consultancy Gartner in its recent report on OTT said that telcos are also looking to monetise their broadband infrastructure by offering content services like movies. As a result, it could block OTT providers like Spuul from their networks. To overcome this, they should try to partner the telcos and share revenue, said the report.
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