Online ticketing is a winner-takes-all biz, little room for No. 2: Ashish Hemrajani of Bookmyshow
The story of movie ticketing website Bookmyshow.com is about quiet execution. Started in 1999, Bookmyshow has evolved its business model, raised VC funding and started making profit before it raised its second and much larger round of funding recently. The firm, which sold 60 per cent to Network 18 in 2007, clocked its maiden profit of Rs 1.4 crore during FY12 and recently brought on board venture capital firm Accel Partners as an investor in a deal which valued it over Rs 250 crore. In an interview with Techcircle, the company's CEO & founder Ashish Hemrajani talks about how the growing ecosystem has largely propelled his company's growth & how event management will be the theme moving forward.
How would you trace Bookmyshow growth and aspirations?
Our aspirations thirteen years ago about where we wanted to reach have not changed till today. I think it is the ecosystem that we grew over a period of time.. the ecosystem didn't exist in 1999. There was a dotcom bubble around 2001 we were a part of that. There was a dotcom bust, we were a part of that too. In 2007 the markets picked up we were there, 2008 the global financial crisis happened and we weathered that storm as well. And now, as the ecosystem has developed and matures, we continue to be in that space. So I think it's about consistency, it's about being persistent in what you do. That's what Bookmyshow is all about.
In 2001 we were really building the ecosystem along with the industry. So what we did was to install software at cinemas, we were running call centers, getting analytics in place, even doing home deliveries of tickets. We were figuring how consumers react to cash versus credit versus debit. So a lot of things were part of creating the ecosystem on which we could flourish. But from 2007, things have changed. In the last couple of years it's gotten better. Even in 1999, we sold concerts but obviously there weren't so many. There is (now) more money in the market, people are more discerning, there is a need for alternate entertainment outside of movies, restaurants and bars. We are in that ecosystem to take advantage of that.
And that's why the growth rate has been different. Obviously we have done some things at our end. Firstly, we have always stayed with the customers. When the customer was not on the internet, we were on the phones. When they did get their credit cards we had options for credit cards. As debit and net banking came into play we offered those as an option. What we've also done is to use the mobile technology pretty effectively. So today bookmyshow.com would probably be one of the top few brands where mobile strategy has worked. And we worked really hard over the last two-and-a-half years and we've made our fair share of mistakes. But we went back and apologised to our customers, and users are forgiving when you are apologetic and honest and transparent, when you deal with them. Bookmyshow does about 10 per cent of its transaction on mobiles which is a very healthy number.
There have been reports that much of the funds recently raised will be deployed into the events vertical. What kind of balance are you targeting between events and movies?
Not all of that will be going into events. Having said that non-movie ticketing will be an extremely important space for us. As a revenue stream, it has grown very well in the past few years. We are exclusive ticketing partners of the Grand Prix in India. We manage (ticketing) for five IPL teams, which is Mumbai, Delhi, Punjab, Rajasthan & Pune and we handle the central IPL rights for play-offs and finals. We've done FIFA ticketing, there are a lot of concerts we are doing, there is the NH7 invasion festival, Sunburn has been a partner with us for five years. So there are a lot of such events and the investment we are making is to create that environment, ecosystem and infrastructure around these events. So whether its F&B, payment systems, gate entry, ushering, access control, we have a Bookmyshow Transactions System called BTS at all our outlets. How will you handle stay at festivals, multiple re-entries? All of that put together is where our thoughts and efforts are going.
You had earlier shared with us plans for an online wallet. Any updates on that front?
One of the reasons why we wanted to launch the wallet was we think a one click sort of environment will get consumers to buy tickets more conveniently, because these are impulse purchases and we want to help them complete the transaction quickly. We work on it every day, so that the consumer experience continues to improve. If you go on our Facebook fan page we have gone from zero until two years ago to about 1.5 million fans. Today anywhere between 5-8 per cent of our customers engage with us on a daily basis.
By 2015 what would be the balance in revenues between movie and event ticketing? Would it be fair to assume events will outpace movie ticketing?
The growth in the non-movies space has been tremendous. It's bizarre right now because it's on a small base. I can't put it in percentage terms, because it's growing so rapidly. Everyday there are more organisers coming up with new events, new promoters are signing up artistes from across the world. There are venues and spaces that are being created, something like Bluefrog for example didn't exist, but now we are the official ticketing partners for it. The Comedy Store is another example, who would have imagined that there would be one permanent venue to enjoy comedy in India. Today, even though the non movie transactions are a fraction of the movie ticketing space. The revenues are far higher because the ticket sizes are a lot bigger. Also it's not only the online sales, but also revenue from running the event on ground. A 50-50 balance between movies and events would be ideal.
You've now clocked you're maiden annual profits so what's the next phase of growth, is there room for inorganic expansion?
We've been PAT positive now for the last 7 or 8 quarters. Largely the growth in India is coming from the top 5 to 10 cities, even though Bookmyshow is present in 80 cities. The real challenge is now what do you do in the Tier II & III cities. That's the real India and everyone wants a piece of that pie. If an opportunity does arise, we find the business good, its people good, that such an opportunity (for acquisition) presents itself at the right time and price who is to say we will not look at it. But to say there something is on the table, it's not true.
Some Indian consumer Internet firms have gone international. How has been your experience and how serious would be plans for further expansion overseas?
Anybody would like to grow and say hey we are in five or ten countries worldwide. But the challenges and potential in India are so enormous that sometimes you come back to the drawing board and say that why are we even doing that, so it's that constant tossing of that coin. India dominates 99 per cent of our focus.
Is there a room for more players in ticketing space?
It (consolidation) varies from industry to industry. In the e-commerce vertical, you would see the top two players dominating and then you will see no three or four following from a distance. In the OTA industry, you will always have the top three or four guys who would dominate in a country. In our industry, it's the winner takes it all sort of a market and there is very little room for a second guy and it's not because of what we have done. Sure we have the first mover advantage. Yes we made some right moves. We have been consumer and user-centric and sometimes we give ourselves far less credit than what we should, but it's also the way this industry works.
(Edited by Prem Udayabhanu)