BookMyShow CEO Ashish Hemrajani On The PVR Deal, Mobile, Monopolies & more – Part 1


Online ticketing site BookMyShow, after years of trying, finally closed a deal to list tickets from PVR Cinemas, a multiplex chain which dominates India’s urban markets, and has been holding out against a partnership with BookMyShow. The deal, BookMyShow believes, will bring Rs 1000 crore of tickets in gross value for PVR Cinemas over the next five years. BookMyShow, which is backed by the Network18 group and Accel Partners, today dominates the online entertainment ticketing space, covering movies (which account for 75% of its revenues), events, gigs, plays etc. MediaNama spoke at length with Ashish Hemrajani, who founded the venture in 1999. In the first part of the interview, he discusses with us the PVR deal, why BookMyShow is the virtually the only player in online movie tickets

MediaNama: Why did it take you so long to close the PVR deal?
Hemrajani: We’ve been working with PVR for the last 10-12 years now. A lot of people are not aware that the entire backbone that PVR runs – the ERP, ticketing systems, concessions and all of that is managed by us. Ever since they started their first site. It’s a very old relationship. They just didn’t think it was the right time or right moment earlier. And then they realized that BookMyShow…when we launched in 1999, there were 20-21 competitors, and it clutters your mind, which way to go. In 2006-07 they started and in 2009 they pulled off from everybody. You wouldn’t know who would succeed, who would not. People were making a lot of mistakes. In the current market, we’ve matured over six years of operations on BookMyshow the way we’ve built analytics and CRM, all of that make a lot of sense to PVR. Also their acquisition of Cinemax, because they would have seen the kind of work we’ve done for Cinemax.

MediaNama: What kind of other work do you do, on top of ticketing?
Hemrajani: One of our strengths is that we have analytics running for every customer – how often he is buying, what he is buying, his cycle, lifetime value, we are constantly dissecting and slicing and dicing data. We have a network effect. We not only sell tickets for movies, but also non-movies.

MediaNama: but I’ve never really noticed any personalization on BookMyShow
Hemrajani: Personalization on the site, you’ll see the coming days. But our outreach to you is personalized. Also, when you log into bookmyshow, the cinema which you last bought a ticket for will show up. If you’ve searched for a movie at another cinema, that is the first one you will see. Our city pages are customised. On recommendations, we’ve build a review-ratings system for customers.

MediaNama: What is the deal with PVR? It sounded like a minimum-guarantee deal to us, at Rs 1000 crore over 5 years.
Hemrajani: No, it’s not. We’ve analysed what the potential of the market is, the growth plans that PVR has, the reach and expected reach, and the role that we can play. I read your article and I didn’t completely agree with that, about the monopolistic situation. From an outsiders perspective, I can agree. I had such a harsh time in 2002, when we went from 150 people to 6 people including and office boy. What we’ve done is that we started building the ecosystem, because the ecosystem wasn’t there. We set up call centers, and ran 12 call centers in 12 cities. We were the first guys to do home delivery.

The challenge with us was that we were buying inventory, and we had an opportunity loss on the weekend and an actual loss on a weekday. It was really tough, and we were early in the game. The ecosystem built from 2002 to 2007. We started running CRM for cinemas, running their call centers, building their websites. We were the guys that went and did a lot of the white-labeling stuff. The 100-200 concerts that DNA ran, we did the white labeled solution. The challenge is when you are so entrenched into the game for so many years, it starts feeling like a monopolistic situation. Today, what is the reality? We give a great UX, have a transparent system of charging the end consumer. We’ve run a very sharp SEO, SEM. We build a mobile product.

Our competition is not other aggregators. Sure, we keen an eye out for them, but the real competition is the Box Office. We’re doing that Kellogs does with breakfast – competing with the idli’s and dosas. You’re saying there is another way of doing things, and how do you change the mindset of the customer? In India, there are only 20 million transacting customers. Of these 11 million have only bought travel. Everybody is fighting for the 9 million. Now when that 9 million grows, when you have 20-30 million facebook fans, who are between 18-20. How do you make sure that they make their first transaction and get on the e-commerce pool? This is good for people like you and us. Whether it seems like a monopolistic situation, that was not the intent…

MediaNama: I’m not saying you haven’t earned that situation…The question is: why isn’t there anyone else in this space?
Hemrajani: Because we’ve been at it for 14 years and built it ground up. BookMyShow is EBITDA-PAT positive for the last 10-12 quarters. We haven’t even used the money that came in from Accel. The fact is that we raised the money when we didn’t need it. We’re not a cash-burn business. We’ve taken our knocks. We’ve just done a very deep integration and run the back-end operations of a lot of these cinemas. We’ve not taken the customer for granted. I think we do that even though it’s a huge cost for me, but we do that because I believe that like Zappos, where will the customer reach out? My only touch and feel to do that mechanism is the call center. A lot of the other guys have not understood that.

On the minimum guarantee: we’ve looked at the market potential, where the numbers are going to come from. We believe it’s a Rs 1000 crore revenue that we can generate on BookMyShow for PVR in 5 years. We believe that all these years, BMS has overdelivered and undercommitted. It’s a number we will achieve, if not over-achieve.

MediaNama: How many tickets will you have to sell for that number?
Hemrajani: We’ll have to sell around 35 million tickets.

MediaNama: What’s the size of the market right now?
Hemrajani: See, in India, there are 3.6 billion tickets sold, annually. That is all of Africa, North America and Middle East put together. The average ticket price in India is $1, not $3-$4 that you and I are used to in the metros, and $8 in the US. There are 12 screens per million people in India, as opposed to 120 screens per million people in the US. So there is tremendous amount of headroom. The reality in India is that there are cinemas in India that sell tickets for Rs 10 and Rs 20. There are cinema’s in such small towns that you and I cannot even reach. We focused on the top 4 metro’s. Then we focused on the top 8 cities, and now it is the top 25. We’re now saying – can we focus on the top 50, even though BookMyShow is 100 cities.

As the country matures, and we start plateuing in some of these cities – which we haven’t yet – but our real focus is now how can we grow organically and inorganically in these class 2, class 3 towns. There has been a tectonic shift in the small towns, because they’ve got access to credit cards and they’ve got mobile. Mobile has been a great driver.

MediaNama: What percentage of your transactions are mobile?
Hemrajani: We have an android, iOS, webapp, a windows app and a blackberry app. We do 25% of our transactions on the mobile, which is one of the highest in the country. I built a mobile team 2.5 years ago, when some of my investors were saying I must be crazy. It’s not a legacy product, but it’s a hard-working product. It’s not good fortune. A lot people see the result. 2.5 years ago, we were making mistakes. We were transparent, and every time we made a mistake we went and apologised to the customer. We didn’t have an ego. On Facebook, we did some stupid things – we built an applications, and then realized that an app has limitations, and Facebook changed its API. Then we built a fan page, and couldn’t transfer then. Then we build city pages, and realized that we should have one page. Again we apologised. I think we’ve made mistakes, but we’ve apologised to customers.

Note: Part 2 will be up on Monday

 


  • Amiya Pathak

    This is a great post – resonates very well with entrepreneurs. Like the fact that BMS owned mistakes in a very transparent way. looking forward to Part 2

  • venkat thangi

    waiting for part2