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How Paytm challenged the BookMyShow monopoly in online movie ticketing

BookMyShow is still the market leader, but is now diversifying its business — and for good reasons. Foreign entrants are also a possibility.

movie-tickets-stock-image

Until last year, the online movie ticketing space in India was synonymous with BookMyShow (BMS) — a pioneer in the market that started operations in 2007. BMS occupied 90 percent of this segment, as per an ASSOCHAM-Deloitte report. One had to stretch one’s imagination to name a second player. BMS was the default movie ticket app on every smartphone. It had, of course, expanded to concerts, plays, comedy shows and other live events too, but movie tickets formed the core of its business, and most of its recall.

But something changed in March 2016 with the launch of Paytm Movies — a new vertical rolled out by Paytm, the country’s largest mobile wallet and now its second-most valued startup. It began by selling PVR tickets on its platform, and then expanded to other multiplex chains and even single-screen theatres. ALSO READ: Now, you can pay at PVR, select amusement parks via Paytm

Within a short span of time, Paytm Movies did two things:

(a) It expanded the overall movie ticketing market which stands at about Rs 2,500-3,000 crore, with online ticketing accounting for 15-20 percent of it.

(b) It ended the BookMyShow monopoly by swiftly tying-up with pan-India screens and aggressively marketing itself to its existing user base of over 220 million.

Paytm’s movie bet vs BMS’ live events focus

Until Paytm Movies came about, movies accounted for 80-85 percent of BookMyShow’s ticket bookings while non-movies (that included sports and live events) took up the rest. Paytm’s arrival coincided with BookMyShow’s gradual shift in focus towards live entertainment and social content.

BMS now runs entertainment websites Daily Social and Movie Nation — both have a sizeable presence on Facebook — and two YouTube channels, BookMyStyle and BookMyTv, which have garnered over a 100 million views in six months. The shift towards content is to tap into a millennial audience that is highly engaged on social media platforms. It improves customer stickiness and invites digital advertising.

As a result, movies now contribute 60-65 percent to BMS sales, and the company plans to bring that down further to only a third of its revenues. Live entertainment is the fastest-growing vertical and the big moolah-maker, furthered by marquee tie-ups such as the Global Citizen Festival and the Justin Bieber concert. The average ticket size for live entertainment is about 10 times that of movies. So, BMS is on course.

live show

Paytm, however, has identified movie tickets as a $1-billion gross sales segment. It claims to have already surpassed Rs 400 crore in gross merchandise value (GMV) in less than a year, riding on the monstrous Baahubali 2: The Conclusion. That movie alone sold Rs 100 crore worth of tickets on Paytm Movies, thus helping the platform contribute 20 percent to the opening weekend collections of all movies. Paytm wants to take that share up to 50 percent by the end of 2017. ALSO READ: Paytm to now focus on travel, hotels and movie ticketing with multiple offers and discounts

Paytm Movies’ growth is primarily driven by its vast user base that exploded post demonetization. Paytm is aggressively pushing its discounts and cashbacks to all users. Attractive offers are reaching people in the form of daily notifications on their phones and mailers in their inboxes. It is nearly impossible to not notice them or fall for them.

While Paytm’s competitors reckon that cashbacks do not gain anything in the long-term, not even customer loyalty, for now it is spurring usage and repeat usage. “We will continue… to increase online ticket sales by promoting them aggressively amongst our vast user base.” Renu Satti, Vice President – Paytm, said in a statement.

paytm movies

 

It just launched a ‘Movies under Rs 100′ segment in its app for shows priced inexpensively. This is aimed at the college-going crowd and young adults who have less income at their disposal.

Add to that, Paytm’s fast-expanding reach in Tier II and III towns where it has tied up with many iconic single-screen theaters and revamped their offline booking systems, has helped it tap into an entirely new set of audience. With seamless QR code-based bookings, Paytm claims to have eased queues in small theaters. Currently, Paytm Movies services 3,500 screens in 550 cities, many of which are these semi-urban and rural centres.

BookMyShow’s new strategy

BookMyShow is in the process of diversifying its business, and re-imagining itself as a wholesome entertainment destination as opposed to just a ticketing platform. “We are taking a new direction in the areas where we have been investing in, trying to change the course of the company,” Ashish Hemrajani, CEO, BookMyShow, told ET recently.

But ticketing continues to be an important cog in the wheel, as the company’s recent deals reveal. In order to combat Paytm’s increasing footprint in regional theaters, BookMyShow acquired Hyderabad-based MastiTickets in January. MastiTickets has tie-ups with over 120 cinemas in Andhra Pradesh and Telengana, thus strengthening BookMyShow’s presence in the territory.

masti tickets

In the same month, BMS rode twin blockbusters (Kaabil and Raees) to clock its highest-ever sales for movie shows on a single day (January 26, Republic Day). It sold 1.2 million tickets for both movies put together. And then there was Baahubali 2 in April for which BMS sold 15 million tickets contributing Rs 120 crore to the film’s opening weekend. ALSO READ: BookMyShow updates its mobile apps to make it more user-friendly

In June, BookMyShow successfully migrated its existing mobile website to an all new Progressive Web App that reduces load-time by 50 percent, thus reducing data consumption. It also allows users to have an app-like experience on all web browsers. “The new progressive web app has already increased conversion rates by more than 80 percent as compared to the older mobile website,” the company said in a statement.

Even on 2G networks, the initial load time is just 3.1 seconds and even for personalized movie suggestions, the new progressive app takes less than two seconds in subsequent loads. This is clearly aimed at getting the small-town consumer on board whose internet speed might be lower compared to that in cities.

Last year, BookMyShow had even introduced regional language support on its website. Users across its website, mobile site and the Android app are now able to choose from Hindi, Tamil, Telugu and Kannada, in addition to the default English option. This is well-timed as the Indian web becomes more vernacular. Paytm Movies has some catching up to do when it comes to multi-language support.

Besides movies, events are a focus at BMS, with the company acquiring a 75 percent stake in Pune-based DIY events ticketing platform Townscript that sells tickets for marathons, conferences, seminars, workshops, exhibitions and college fests. “We definitely expect to see more traction in the space of do it yourself ticketing events. It’s unique and addresses a different set of users who want to set up their own events,” CEO Hemrajani said in an earlier statement.

Going ahead

Online ticketing is only about one-fifth of the overall entertainment ticketing space. But it is growing rapidly because of India’s burgeoning internet population and the government’s aggressive push for digitization. Cashless transactions are gaining in acceptance. There is a huge untapped market still, especially beyond the big cities, where both BookMyShow and Paytm Movies can co-exist. India has about 6,000 screens in total, with more being added; thus, growth opportunities abound.

ticket new

The other thing likely to take place is consolidation. Big pan-India players will acquire regional ticketing sites. That trend has already begun with BookMyShow’s MastiTickets acquisition. Also, major foreign entities will enter India, which is one of the fastest-growing movie ticketing markets in Asia Pacific, as per a report from Grand View Research.

Alibaba acquiring a majority stake in Chennai-based TicketNew is a step in that direction. There could be more to follow. Interestingly, Alibaba owns 40 percent in Paytm and could well merge TicketNew with Paytm Movies in future, thus making the latter a far bigger player than it is now.

While that is conjecture, it is not entirely impossible. Only time will tell.