BigFlix COO Kamal Gianchandani has told the Financial Express that the company expects to break even in the third quarter of the next fiscal year (2009-10). They intend to invest around $100 million in the retail business over a period of four years, and currently have 112 stores. What Gianchandani doesn’t mention, is the revenues they will need in order to break even at an operating EBITDA level.
The company claims to have a registered user base of 80,000, which is already more than the 70,000 that SeventyMM had claimed a few months ago, when they had raised $11.4 million in funding. BigFlix has a presence in 10 cities, while SeventyMM, at that time was present in six cities. SeventyMM was targeting an expansion to 40 cities in two years, but it will be difficult to compete with BigFlix – I guess when you’ve got an outlay of $100 million over 4 years, you can build scale.
In September, Gianchandani had told MediaNama that they’re targeting online ad sales revenues of Rs. 10 crores by March 2009. Rental accounts for 75-80 percent of their business, and would involve a significant investment, though some of it may be reduced because BigFlix will follow the shop-in-shop model, and have stores inside Reliance Web Worlds. The fact that they’re able to leverage ADAG infrastructure should also help.