It is not that we didn’t know it, but now it has become far too obvious. Simply put, the latest figures thrown out by BookMyShow in its regulatory filings unanimously indicate that company’s movie ticketing business is feeling the pressure. The pressure is all thanks due to Paytm, which is steadily eating into BookMyShow’s main bread and butter business.
BookMyShow has reported a 30% increase in operational revenue in the current fiscal (2018), with revenue touching Rs 391 crore from Rs 300.9 crore a year before. While 30% growth in revenue is not all that bad, but this growth has come with a caveat. This caveat being that the company’s growth for the second year in a row has mostly come from non-movie ticketing business, which clearly signifies the growing pressure on BookMyShow’s movie ticketing business.
A closer look in the revenue reveals that revenue from movie ticketing business in 2018 stood at 18% compared to 30% last year.
With pressure on its core business growing, BookMyShow has already resorted to diversification by focusing on non-core businesses. It is laying major emphasis on events including international events and has already made a successful foray into music with its product Jukebox.
The good thing about BookMyShow’s diversification is that it is already yielding results and also not incurred any heavy cost on the company. In fact, BookMyShow’s non-core businesses have been annually growing at impressive 60% since 2012. This has certainly helped the company in compensating for the loss incurred due to the pressure on movie ticketing business.
Paytm is still far from Knocking off BookMyShow
The word ‘But’ in the main headline was not put accidentally, but deliberately. This is to say that although Paytm has been successful in putting substantial pressure on its main rival, it is still far from knocking out the rival from podium.
This is because BookMyShow still sells far more tickets than Paytm does. According to industry sources, the former sells more than 13 million tickets every year whereas the latter manages to sell only 4-6 million. But the more important factor is BookMyShow’s leadership position in big metropolitan cities mean that its average ticket size is far larger than Paytm, which is dominant only in the smaller cities and towns.
Besides, Paytm may have big boys like Alibaba and SoftBank on its side, but BookMyShow is no push over. In fact, it is one of the few startups that have managed to remain largely profitable since inception and also continues to boast strong balance sheet.
This is the reason despite growing concerns over pressure on its core business investors keeping flocking to the company. The company, in fact, had recently raised $100 Mn from TPG growth & others at a valuation of $850 Mn. Another round of funding will most certainly propel the company to unicorn status.
Hence BookMyShow is surely not going to succumb to the pressure so easily, which means there is still lots of work for Paytm to do.