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BookMyShow’s Diversification Hurts Profits

Posted on Monday, Nov 5th 2018

The increasing penetration of Internet and smartphones have given rise to many successful businesses in India. One of them is online entertainment ticketing portal BookMyShow.

BookMyShow’s Journey is the flagship portal of Bigtree Entertainment group founded in 1999 by three friends Ashish Hemrajani, Parikshit Dar, and Rajesh Balpande. The idea for an online ticket aggregator system was born while they were on vacation in South Africa. They started off by taking over the Indian retail and service rights for Vista, a New Zealand–based ticketing software. Soon they expanded into offering online movie tickets in the country and became India’s first ticketing aggregator.

But the journey was not so rosy. When it started, there were no multiplexes or e-ticketing software. Legally, automated sale of tickets for events outside the box office was prohibited. Luckily, an amendment to the law soon took care of that hassle. Bigtree had added News Corp as an investor and expanded to 150 people when the dot-com bust hit in 2001. It was a lesson learnt the hard way. The company then ran a tight ship with just six employees and salary cuts. It renegotiated with its investors and reinvested all its earnings. By 2004, multiplexes took off in major Indian cities and things started to improve. In 2007, the company launched its ticketing platform called BookMyShow.

Today, BookMyShow is a ticketing, information, and analysis solutions provider not only for movie theaters but also for other entertainment events in the country. It has sold tickets for sporting events like Formula 1 Indian Grand Prix, Indian Premier League, hockey World Championships, and Badminton Asia Championships. Its offerings extend beyond the Internet as consumers can transact through its call centers, kiosks, and mobile ticketing platform.

BookMyShow has over 30 million customers booking tickets in over 650 towns and cities across five countries and over 5,000 movie screens. The site sells over 15 million tickets per month and has over 2 billion views per month.

BookMyShow’s Financials

Bigtree posted revenue of INR 391 crore ($ 53.7 million) in fiscal 2017, up 30% from INR 300.9 crore ($41.3 million) a year ago. Its revenue growth rate is better from 27% last year but is still far from its peak growth rate of 85% in 2015.

Its net loss widened to INR 162 crore ($22.2 million) from INR 139 crore ($19.1 million) a year ago. The company had been profitable in the past. In 2012, it had profit of INR 3.2 crore ($0.4 million) and INR 20 lakh ($27,500) in 2015. But with increasing competition and expansion into non-movie business, its losses have widened. Last year, it ventured into original content with the production of Disney’s Aladdin as a Broadway-style musical. It plans to return with a second season in December.

BookMyShow has so far raised $224.5 million from investors including Network 18, Accel Partners, SAIF Partners, Stripes Group, and TPG Growth. Its last round of funding was in July this year when it had raised $100 million in Series D at a valuation of $850 millionAn earlier round in 2016 for $75 million had valued it at $450 million.

Meanwhile, competition is rearing its ugly head. Paytm ventured into the space two years ago and already has presence in 4,000 screens across 660 cities.

It is not just Paytm that BookMyShow has to worry about. There haven’t been many blockbuster hits this year to attract audiences in large numbers to theatres. Perhaps the advent of Amazon Video and Netflix is also a cause of concern for BookMyShow.

Have you ever used BookMyShow? How was your experience? Do you think you have been using the service less since you started streaming TV shows and films on Netflix and Amazon?

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