By Patanjali Pahwa & Urvi Malvania | Mumbai Apr 03, 2016 12:05 AM IST
In an otherwise dog-eat-dog world of e-commerce, BookMyShow (BMS) has so far enjoyed a virtual monopoly in online movie and events ticketing platforms. But this is about to change with Paytm making an aggressive entry into the segment.
After having partnered with PVR cinemas, Paytm is in final stage of talks with Inox and Cinepolis to handle their online ticketing business. Together, these three brands account for over 1,000 screens.
“We expect Rs 250 to 300 crore in online ticketing revenue. We have had an exclusive tie-up with BMS since 2013 and are continuing with it as of now. So PVR tickets will be available online on three platforms – our own digital products, BMS and Paytm,” says Kamal Gianchndani, CEO, PVR.
PVR has been a major source of revenue for BMS. Last year’s biggest hit – Bajrangi Bhaijaan – grossed Rs 320 crore at the box office and PVR was one of its top revenue channels. “PVR contributed close to Rs 55 crore, which effectively means a contribution of 17 per cent of the movie’s total box office revenue. Also, PVR amounted to 24-25 per cent of all multiplex contributions,” says Suneil Wadhawa, independent distributor and box office analyst.
In this context, Paytm has already been able to take a portion of BMS’ PVR business. This, however, hasn’t come as a surprise to industry experts. A technology consultant for most major theatres told Business Standard that many theatres were already searching for an alternative online movie ticketing platform. “Earlier, theatres followed the aggregator because there was no alternative. Now, that has changed,” he said.
If Paytm signs the deal with Inox and Cinepolis, BMS will face a direct challenge on nearly all of its premium screens. And if PVR’s takeover of DT Cinemas goes through, Paytm might just score over BMS.
BMS, of course, has been spreading its risks. Over the years, it has diversified from just selling movie tickets to events and is said to be exploring international markets as well. But domestic cinemas continue to account for almost 60 per cent of the Network18-backed company’s revenue.
“It would be safe to say that Paytm has better chances of success. It is definitely better equipped to challenge BMS’ monopoly,” said Devang Sampat, head of strategy, Cinepolis India. As much as 32 per cent of Cinepolis’ total box office collection in 2015 came from online ticketing.
Paytm has been strengthening its offline merchant programme to reach a critical mass. In this process, it has done away with the ‘internet handling fee’, which BMS famously introduced as part of its commission from the customer. BMS co-founder and CEO Ashish Hemrajani couldn’t be reached for his comment. If BMS also axes its handling fee to keep up with Paytm, it will damage its bottom line, making it difficult to keep up with the deep-pocketed online wallet firm.
Pinakiranjan Mishra, partner, EY said, “If Paytm can, for a sustained period of time, do away with the convenience fee, it will attract a lot of customers.” But that also means that BMS will have to fight not only on ticket costs but also on the market clout that Paytm has already generated.
“Look at the number of users Paytm has. If they can convert those, there will be a new monopoly in town,” said the consultant.
The entry into film tickets will benefit Paytm in more than one ways. “Usually, fence sitters, who are still not used to spending through credit cards, trust wallets. Mobile wallets give them the safety of limited exposure. So they would like to do ticket transactions on the wallet. Something, non-wallet based companies can’t give,” said the technology consultant.
For the past 16 years, BMS has been dominating the online ticketing business. But in Paytm they face a challenger backed by Alibaba. Paytm reportedly has a customer base of 120 million of which 40 per cent are active and do 90 million transactions a month. Paytm has hinted that it may get into sports and events sometime in the near future, another area BMS has championed over the years.