Online movie and event ticketing platform BookMyShow (BMS), owned and operated by Mumbai-based Bigtree Entertainment, has set its eyes on becoming the ‘360-degree entertainment gateway’ of India backed by the R 550 crore funding it received in July. This comes at a time when the
Network 18-backed company is expanding into international markets and looking to generate additional revenue streams through content and native advertising. While BMS has been a market leader, competition is fast catching up with Alibaba-backed Paytm collaborating with top multiplex operators like PVR, INOX and Cinépolis. With this, the movie ticketing aggregator is facing competition on its premium revenue-generating screens.
According to the data filed with Registrar of Companies, Bigtree Entertainment reported 57% growth in revenue to clock R132 crore in FY15 against R84 crore in FY14. Online ticket sales contributed 69.32% to the company’s turnover while commission from concerts and events stood at a mere 14.20% in FY15. The company now claims that the non-movie segment contributes 35-40% to its turnover with domestic cinemas contributing around 60%.
Yes, its strength still lies in its movie ticketing platform. BMS sold more than 30 million tickets in Q1 FY17 compared with 22 million tickets for Q4 FY16, registering a growth of 38%. Says Ashish Hemrajani, co-founder and CEO, BookMyShow, “The R550 crore funding will enable us to invest in data analytics and building contextual entertainment content such as videos, trailers and reviews.”
Clearly, BMS’ journey from movie ticketing to live events and now content, is indicative of how the brand is continuously reinventing. It is also indicative of how ancillary platforms like mobile wallets are eating away into its business model.
BrandWagon looks into how the market leader is reinventing itself to stay ahead of the pack.
Focus on content and advertising
Started about a year and a half ago, BookMyShow’s user generated movie reviews and ratings started as an engagement exercise aimed at hastening the decision-making process but later grew in popularity. For example, more than 13,000 people rated Udta Punjab while Bajrangi Bhaijaan received ratings from two lakh people. However, what differentiates BMS in its new avatar is the focus on original content, which includes videos, trailers, branded content and native ads.
To enable its transformation into a content-driven entertainment destination, BMS has been working on a big data project which includes data on the film industry such as cast, crew, film actors etc. It has also redesigned its website to look more like a magazine. “The new design also helps us in maximising the real estate on the web along with bringing out the creatives that we get from our partners, production houses or event organisers,” he says. Post the re-designed website going live, the company claims its bounce rate reduced by approximately 60% while the average time spent went up by approximately 20%. However, experts say BMS’ bet on content may not be smooth-sailing. “Content is not an easy game to play. But as of now it looks like BMS has a plan and wants to create a differentiated positioning compared to the traditional attempts made by other players,” says Ajay Shah, partner — media and entertainment, transaction advisory services, EY.
Content, along with the ad platform, is aimed at making advertising a significant revenue source. BMS expects it to contribute 10% to the overall revenue.
The online ticketing platform currently earns revenues from convenience fee on online sale of tickets, commission from concerts and events, sale of advertisement space and marketing, its call centre business and revenue from sale and maintenance of software. Currently, advertising is mostly related to movie marketing and film advertising. As content engagement grows, it plans to go beyond movies. “Branded content is also set to be part of the advertising piece. It will be on news and entertainment features, curated and created for BookMyShow,” reveals the CEO.
In expansion mode
BMS is also cherry picking opportunities in international markets even as it expands here. It currently offers its core ticketing business in four countries: Bangladesh, Indonesia, New Zealand and the UAE with plans of launching operations in Sri Lanka. In India, BMS is focussed on addressing the challenges related to data consumption and online banking to drive its growth beyond metros.
To solve the problem, BMS launched its mobile wallet in August last year. Close to 15 to 20% of its transactions now come from the wallet.
“We are adding offline to online payments to enable customers to load money in the wallet offline and use it online. There is also a ‘reserve now and pay later’ feature,” says Hemrajani, adding that cash on delivery make sense only for events, shows and cricket matches as transaction sizes are larger and planned well in advance.
In the event space, BMS offers services which extend beyond booking tickets online. These include box office sales, ticket sales through partnered outlets, gate entry management and handling F&B counters. For example, BMS handled ticketing operations for IPL’s ninth edition this year, managing online ticketing as well as on-ground operations for six out of eight teams. At present, the portal is present in more than 3,500 cities.
However, for further growth, single screens or smaller theatres become important in cities where multiplexes are not present. Currently, the share of multiplexes stands at 2,200 — 15-20% of the total screens in India. “For this, BMS might need to look at a different play as consumers would be more sensitive to paying convenience charges of R30 for tickets priced less than R100,” notes Shah.
“It is an incorrect statement that we are in a low margin business. The transaction size is small but margins are healthy. The volumes are high,” says Hemrajani.
Figures corroborate his statement: BookMyShow sold over 4.93 million tickets of the movie Jungle Book, generating over R100 crore in box office revenue in India across all languages.
Competition on the rise
The online ticketing space is far from saturation and its growth story has just begun with the increase in smartphone penetration and internet. Figures show the online movie ticketing market is only 15% of the total movie ticketing market in India, which is worth $2 billion, and is growing at 10% annually. This makes online movie ticketing a lucrative business proposition for the new entrants like Paytm.
“BookMyShow was the first mover and had a great run. With Paytm coming in, the space will get more competitive,” notes Shah. But it depends on Paytm’s focus as well. “Currently, Paytm is trying to do too many things at the same time,” says an analyst. Also, cashbacks and discounts offered by Paytm could create strong competitive pressure among aggregators as the model today leans on convenience fees.
India’s biggest theatre chain PVR finds an aggressive marketing partner in Paytm. “In terms of destination, it not only offers movie tickets but also other services and products, allowing for cross-selling. The Paytm wallet can also be loaded offline,” says Kamal Gianchandani, chief of strategy, PVR. PVR currently partners with BookMyShow, Paytm and Justdial for online booking.
BMS is also facing competition from its business partners such as PVR, Cinépolis and INOX. For example, PVR Cinemas revamped its app in July to enable faster transactions. The updated app has features like e-wallet for instant refunds, pre-ordering food and beverages at PVR properties, a dedicated offer zone and so on. Post the update, PVR has witnessed 25 to 30% increase in app downloads. “The strategy at PVR is to go beyond the transactional relationship with consumers. We want to have a relationship with them before and after their movie experience,” says
Gianchandani. Currently, the contribution of online medium to overall PVR ticket sales is 40%. Online booking at PVR properties in non-metro towns is also seeing an increase of 25% year-on-year.
At Cinépolis, all of its 252 screens can be booked online through ticket aggregators and its platform. It has tie-ups with BMS, Paytm, Fastticket and Justickets. “Online booking is more than 30% in India for Cinépolis. Currently 35% of Cinépolis’ total box office collection comes from online ticketing,” says Devang Sampat, business head, strategy, Cinépolis India.
Going online is much needed for any business today and theatre chains too are following suit. “Ticket aggregators may then remodel themselves as lead generators gaining from booking commission,” says Sreedhar Prasad, partner, e-commerce, KPMG India. “The aggregators will still have a market since customers would prefer to compare show timings and availability on one platform.”
Having said that, one can’t wish competition away. Hemrajani is realistic. “As a leader, you are always on the losing side because any incumbent that comes will always gain and you will lose to begin with” he says. “Competition helps in growing the market.” But offers and discounts need to be goal-oriented. It doesn’t make sense to get the customer used to a metric which is not healthy. “See what happened in the e-commerce category,” he muses.