Has Paytm's foray into movie ticketing hurt BookMyShow, TicketNew?

Online movie ticketing platform BookMyShow’s revenue growth slowed while peer TicketNew’s sales fell after a new cash-rich rival—Paytm—entered the segment.

Competition for Mumbai-based BookMyShow and Chennai’s TicketNew has intensified ever since Paytm Wallet, operated by Noida-headquartered Paytm Payments Bank Ltd, started online ticket-booking services in March 2016 to diversify its offerings.

Market leader BookMyShow, operated by Mumbai-based Bigtree Entertainment Pvt. Ltd, posted a 27% rise in consolidated net sales for 2016-17. That's down from the 85% growth it clocked in 2015-16 and 61% the year before, according to regulatory filings and VCCEdge, the data research platform of VCCircle.

In absolute terms, the company’s consolidated net sales rose to Rs 300 crore for 2016-17 from Rs 236 crore the year before.

The reason for the slowdown is not clear. However, it is not unusual for the growth rate to fall as the size of the business increases.

BookMyShow's profit or loss figures for 2016-17 were not available as the company has not yet filed its full financial statements.

A BookMyShow spokesperson said in an email that the company continues to register “healthy growth” year after year and that the pace was faster than that of the market and in line with its strategy. The spokesperson didn’t reveal the profit or loss number.

BookMyShow is one of the most heavily funded companies in the media and entertainment sector in India, having raised a total of $128 million. It counts New York-based investment firm Stripes Group, Reliance Industries-controlled Network 18 and venture capital firms Accel Partners and SAIF Partners as its investors.

Meanwhile, TicketNew, run by Orbgen Technologies Pvt. Ltd, posted an 8.7% drop in standalone net sales for 2016-17 to Rs 14.6 crore from Rs 16 crore the year before, regulatory filings show. The company swung to a net loss of Rs 3.2 crore from a net profit of Rs 16.7 lakh. TicketNew didn’t respond to email queries on financials.

TicketNew’s majority investor is Alibaba Pictures Group Ltd. The entertainment arm of Alibaba Group, China’s largest e-commerce firm, had picked up a controlling stake in TicketNew in June last year.

Paytm Payments Bank is part of One97 Communications Ltd, which is backed by Japanese internet conglomerate SoftBank Group Corp. One97 also has an e-commerce marketplace under Paytm Mall, which counts Alibaba as a large shareholder. One97 raised $1.4 billion from SoftBank last year.

Paytm’s trump card
Paytm’s movie-ticketing revenue for 2016-17 is not known, chiefly because the firm does not reveal segment-wise sales. An email to Paytm remained unanswered till the filing of this article.

Last month, Paytm said it had sold over 52 million movie and event tickets in 2017, up six-fold from 2016. The same data for BookMyShow’s ticket sales are not available for the corresponding periods.

Paytm also appears to be catching up with BookMyShow in terms of movie screens. According to a February report by The Economic Times, Paytm has tie-ups with 4,000 movie screens whereas BookMyShow is present across 4,500 screens.

Consultancy firm RedSeer said in a recent report that Paytm became one-fourth the size of BookMyShow by March 2017 and that it expects this share to go up to about 30% in 2018.

Jehil Thakkar, partner at auditing and consulting firm Deloitte India, said BookMyShow is dominant in metros though Paytm’s market share is increasing. “The wallet’s trump card is that it gives users the ease of payment. It is going to be a two-horse race in the long term. Over 85% of all online ticket bookings happen on apps now.”

Notably, BookMyShow shut down its wallet service at the end of February.

An industry analyst said on the condition of anonymity that Paytm’s entry definitely has had an impact. “BookMyShow has diversified into several areas now and is not focused on films alone. It has sports, live ads and exclusive events – all of which have given BookMyShow different revenue streams,” he said.

Paytm is diversifying, too. In July 2017, Paytm decided to buy a majority stake in Insider.in, a Mumbai-based platform for curated events.

“But BookMyShow has a lot of venue partnerships and long-standing relationships. I would not discount them in taking on Paytm,” said Thakkar.

Another reason for the drop in revenue growth of BookMyShow could be ticket-booking apps of multiplex chains that also offer loyalty programmes.

Kamal Gianchandani, chief strategist at PVR Cinemas, said that online ticket sales through the company’s own channels or partners account for half of the total and that BookMyShow is the leading partner for India’s largest multiplex chain. “Our online sales and digital social engagement have grown rapidly in the last few years,” he said.

Consolidation
While Paytm has shown no sign of letting up, BookMyShow has been consolidating its dominance with a spate of acquisitions.

In 2017 alone, BookMyShow took control of four companies: video-on-demand platform Nfusion, Network18-owned restaurant-discovery platform Burrp, Pune-based event registration and ticketing platform Townscript and Hyderabad-based ticket-booking platform MastiTickets.

In 2016, it picked up a majority stake in Chennai-based fan-relationship management solutions provider Fantain Sports Pvt. Ltd. The previous year, the company bought a majority stake in Bengaluru-based social media analytics startup Eventifier. In 2013, it acquired Chennai-based online ticketing firm TicketGreen.

If the intensifying competition is any indication, more consolidation in the online ticketing segment is likely to happen soon.

“Paytm was using its traffic for movies, events and other bookings. Price, discounts and cash-back offers drove consumers to them from BookMyShow,” said Rakesh Jariwala, partner for media and entertainment at auditing and consulting firm EY. “But at some point you have to stop bleeding.”