How this start-up is storming the music retail space?

Cinerama Pvt Ltd was founded in 1954, and was the pioneer in the professional cinema industry in India. The group exported projectors all over the world, and installed projection equipment, audio processors, and multi-channel sound systems in thousands of cinemas all over India. The company deliveres complete home cinema solutions to customers including equipment selection, wiring, installation, and calibration. In an exclusive conversation with Arjun Agarwal, CEO, Cinerama Pvt Ltd shares more insights of the venture.

Arjun began his journey with Cinerama in 2013, as the CEO when Cinerama diversified into home cinema under the retail brand Cinebels and since then, Arjun has been actively involved in every phase of the business and aims to set a benchmark by making Cinebels(which was originally started in 1999), one of the most market-oriented brands that will change the aspect of a smart home.

Tell us about your retail venture Cinebels, the inception and journey so far? What inspired you to launch this brand? What were your initial challenges and how did you overcome those?

In 1999, the home theatre market in India was at an extremely nascent stage. The vast majority of people didn’t know what real home cinemas were. We saw an opportunity to address this situation by establishing world-class showrooms to allow people to experience what high end audio and real home cinemas actually were.

We tied up with what we felt, with our experience, were among the world’s best brands in different categories, and took up distribution for these brands for India. For example, for speakers we partnered with Jamo, who were then Europe’s largest speaker manufacturers.

Our expertise let us pick and choose products from the best brands and then design customized solutions, as sound and entertainment are very personal tastes. We opened our first retail experience center of Cinebels on Millers Road in Bangalore.

We lost money on the showrooms for a few years, but remained invested as we felt the market was going to boom. A lot of customers would come in in the early days, experience everything, love what they saw and experienced, but not buy anything as they couldn’t afford what we had to offer. This has completely changed today.

Over the years we have opened retail experience centers in Chennai, Hyderabad, and Mumbai. We also took up distribution of America’s #1 brand Klipsch in 2009, and opened a flagship Klispch showroom, our second showroom, in Bangalore. Apart from our retail footprint, we also have a large dealer network of over 100+ dealers across the country.

What is the current distribution of Cinebels in the online as well as offline space. Going forward, what are the plans to scale-up the distribution?

The vast majority of our business is offline. We have started expanding online to sell the personal audio and digital audio products we distribute, including headphones, sound bars and Bluetooth speakers.

Though the ones we carry are relatively expensive, as they don’t have any installation or calibration required we feel people will be comfortable buying them. Going forward, we believe discovery and purchase even for home theatres will move online, but will need offline support, and will be more an omni-channel model than pure online or pure offline.

How Cinebels products are better than contemporary brands? Tell us about the product innovation that you have brought in your product range?

The brands we have chosen to work with are among the best among the world. They all have unique selling points in terms of technologies and sound signatures. The most important aspect we look at when selecting brands to work with is the breadth of their product offering, and we try to make sure they have products ranging for all possible audio solutions, from headphones and Bluetooth speakers, to landscape speakers, to high end home theatres and anything and everything in between.

This is because we don’t want to turn away any customers who are passionate about audio. In terms of service, we are very different from our competitors, because we take our service ethos from our cinema background. When you look at real cinemas, projectors need to run 4 times a day, 7 days a week, and 365 days a year. When a projector goes down, it affects the very livelihood of the theatre owner, and immediate service is critical. We bring this same philosophy into our home cinema offering, and that helps differentiate us from our competitors.

Is this a bootstrap venture or have you raised any sort of funds so far?

Bootstrapped – we invested the profits from our cinema business into our home cinema brand. We also do not believe in raising debt, as our company has always been debt-free.

Who do you see as your competition in the national as well as international market?

There are hundreds of dealers who offer home theatre and audio services all over India, and probably tens of niche speaker brands that compete with Klipsch and Jamo, including brands like B&W, Dali, and KEF. All these dealers and brands compete with us. We feel having different brands with different sound signatures is critical because sound is very personal. That’s why we have chosen two brands – Klipsch and Jamo – with very different sounds, to appeal to as many tastes as we can. We do not see mass market companies such as Sony, LG, Pioneer, and Bose as competition because they cater to very different demographics and price points. They offer in-a-box solutions – we offer customized, turn-key solutions.

How do you see consumer behavior evolving in this category?

Product discovery has shifted online. Having a strong digital and social presence is therefore key. We have also seen a shift in how many people are willing to buy expensive digital audio products online – when we first started selling headphones online in 2014, we struggled to sell 5,000/- headphones. Today we sell headphones upwards of 20,000, and sound bars upwards of 60,000/-.

There is also a shift in the kinds of solution people are demanding. Earlier most customers only wanted dedicated home theatres. Now, more and more customers want music and audio all around their home, including bedrooms, bathrooms, and outdoor areas.

Finally, there is a dramatic shift in the way people are consuming content. Physical media such as CDs, Blu-Rays, and DVDs have almost completely disappeared. Most content is now available from services such as Prime Video, Netflix, Spotify, Gaana, and the like, and this is what most consumers are now interested in consuming.

At last, kindly highlight your growth plans?

The home theatre market in India has been growing rapidly and continues to do so, so there is the natural growth we foresee that comes from being in a high growth market.

There is also the organic and word of mouth effect, that is especially critical in our retail segment. Given that our retail sales are high value and low volume, a lot of our business comes by reference. As we install more and more home cinemas, we add on more and more happy customers, which give us new references and orders.

Our distribution channel has been and will continue to be a key focus area. As smaller towns develop, we have a goal of adding on more and more Klipsch and Jamo dealers in Tier 3 and Tier 4 cities.

We plan to expand our retail foot print as well. We currently have showrooms in South and West India, so the North and East are natural areas for growth.

Finally, as the online market continues to evolve, we will keep a close eye on the space. As discussed earlier, we are selling our digital audio products online. When the time is right, we will start selling our customized solutions online as well.