With a billion Bollywood-loving citizens in India, and millions more around the world in the Indian diaspora, Rajjat Barjatya saw a market in $4.99 movie downloads. So in late December, his company, Rajshri.com, became the first Indian site to offer full-length movie downloads.

Online delivery of movies and television is picking up in India. Seventymm, using the Netflix model for DVD rentals, attracted $10 million in venture capital in September from Draper Fisher Jurvetson and Matrix Partners. Madhouse Media, a movie rental company with online and offline components, received $228,000 in January from Band of Angels, a group of Indian entrepreneur investors. Both are acquiring content rights.

The new companies compete with the $5 to $10 price to buy a DVD and store rentals that can cost less than a dollar. But those are often stocked with pirated discs of abysmally low quality. In a country full of film buffs, Barjatya's betting there's a market for quality.