Book My Show The Initial Idea Information Technology Essay

It was in August 1999, when Hemrajani struck upon idea of selling movie tickets online to eliminate queues outside movie theatres in India. He was thinking for some time as to why there was no other way to find out the availability of movie tickets rather than stand in long queues. Backpacking from Johannesburg, he quit his job with J Walter Thompson, the advertising company and decided to start his own venture to provide an answer to this problem; this was how Bookmyshow was born. Hemrajani had done his MBA in marketing from Sydenham Institute of Management, Mumbai. Once back in India he shared this idea with his friends and two of them, Praikshit Dar and Rajesh Balpande both MBA’s from University of Mumbai were excited about this idea and agreed to form a company named to develop this idea into an enterprise.

Most players in movies were small theatres and multiplexes which lacked the ability to provide cutting edge solutions to entertainment industry. The lack of e-ticketing software in theatres and single screens meant that they had to buy tickets in bulk from theatres in advance and then sell inventory to customers which was a herculean task. The idea was to build their own logistics which would help them to manage the inventory better and provide the option to potential customer to book ticket in advance. The idea was to sign up with most cinema houses and then get the online business going. While enquiring about various problems, they came across with one issue that people asked for home delivery of tickets and wanted to pay after delivery of tickets than using the credit cards, debit cards and net banking. At that time Internet usage within the country was growing; even though the country had low internet penetration rate, the absolute number of users of internet was high. From three million internet subscribers in 1999, the total reached to 81 million in 2011. The rising internet connectivity encouraged the growth of E-commerce industry and large number of new companies emerged especially in the services sector whose business model revolved around E-Commerce.

The case was prepared by Mr.Rakesh Gupta, Research Scholar, FMS and Professor Ajay Pandit, FMS, Delhi University. This case is meant to be used for class room discussion and not to reflect upon the effective or ineffective handling of the situation. No part of this case may be reproduced or stored in a retrieval system without the permission of the authors.

Birth of

After discussing their idea and lot of brainstorming, the team developed the business plan which they sent to Chase Partners. Within a week, Hemrajani received a call from them asking how much money they wanted. After few rounds of discussion, Chase Partners decided to invest half a million dollars of funding and the company was launched. The team went to the drawing board and decided to build a portal which would provide the facility of booking movie tickets online. That was how Bookmyshow was born and for the first time, sale of tickets was to be recorded in real time, which would help the theatre and multiplexes to access sales information, at any given point of time. When BookmyShow was conceptualized, ticketing across cinema screens in India was still a manual process.

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Testing times

The initial days were very tough as they suffered losses when they could not sell the tickets. This left the founders in a quandary, as online selling of tickets would require a system of allotment, blocking and reservation. There was an immediate need to automate the box office of theatres across India. If specialized software was brought in for the purpose of selling tickets and the back-end was automated, it would enable the company to have a front end in the form of a portal that could be updated live with the availability of seats and enable online ticket sales. This can lead the company to emulate the functioning model of travel booking sites like Cleartrip and MakeMyTrip as these portals sit on the booking engines of airlines and reach consumers. The specialized software that they needed to enable the automation process could either be developed by company in-house or could partner with a firm that already owned such software. They partnered with Vista Entertainment Solutions from New Zealand becoming their first consumer in India and are today their official Indian representative. Initially, they were giving the software free to theatre owners thinking if they installed it, they would be able to dip into their inventory.

The dotcom bust happened in 2002 and the tables turned completely for the company as the bust forced them to reconsider their entire business model. A lot of people were exiting the business during this phase, and overall, there was a lot of negativity in the air. The founders decided to stick by but had to retrench staff from 150 to six and waited patiently for the environment to change. This move paid off as within a few years, the real estate and multiplex boom happened and brought with it immense opportunity for them. All the new multiplexes and cinema chains needed their software and this helped them to build strong relationships with production houses and multiplex owners which would eventually help the transformation of BookmyShow. Their idea was to sign-up with more and more multiplexes by way of providing a wider reach and choice to sell tickets, and make available large inventory to sell to end customers.

Dotcom boom

The dawn of 2006 saw the beginning of another dotcom boom in the country, this time one that unfolded a holistic revolution. Internet penetration was reaching new heights, broadband speeds was improving, mobile call rates had dropped and net banking had arrived with the usage of debit and credit cards. The evolution of these elements was necessary for the existence of a vibrant ecosystem that would encourage dotcom businesses in a big way. By this time, people were not just surfing the Net, they were going a step further and transacting online. The company already had a good rapport with multiplex owners and they went shopping for money once more. They found the right partners in Network18 who stepped on board in 2007 and there has been no looking back for the company since then.

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The company converted all customers and all transactions to the BookmyShow platform. It reworked on its branding, unified its call centre operations with a single, toll free number across the country and the portal gained momentum quickly. By December 2009, the company was selling a million tickets a month through the portal. BookmyShow was among the top five transacted web portals in India and was the third highest valued brand in the E-commerce space. The company was offering white label services to clients who did not have an internet presence as it was also managing entire events and concerts for organizers. This included everything from managing gate entries to box office to security to on-ground delivery of tickets through tie-ups with retail outlets like Café Coffee Day and Reliance Fresh.

Industry & Competition

For the last four years in India, more than 1000 movies are produced annually. Revenues dominated by Domestic Box Office at 75%, unlike Hollywood at 11% and Home Video Revenue currently at 8% expected to reach almost 20% by 2015. Overseas Revenues grew rapidly at 21% due to increasing popularity of Indian Movies. The 15-34 years age group represents the most frequent moviegoers worldwide. India being one of the youngest nations in the world, with two-third of the population below 35 years of age, an increase in this group would propel further growth in the movie viewing segment. Spurred by improving quality of theatres and excellent services, the multiplex segment is expected to witness a strong spurt in demand. This evidence is supported by report of Film Federation of India, which mentions that there are 12,000 theatres in India and many of them are not functional. There are around 80 multiplexes with 295 screens, which are expected to increase sharply. The rapid growth of was too glaring to be missed and competition started making its entry. The company faces competition from, PVR cinemas, Fun Cinemas and few other players. Further faced competition from, as they were also providing an option to book movie ticket. But has always focused on excellent customer services, technology and lower costs. BookMyShow has launched a Facebook application called ‘Ticket Buddy’ that allows customers on Facebook to block a maximum of 10 seats of forthcoming movies without having to pay for all; they can even invite friends to join them on the show.

Revenue Model

To start with, adopted a practice to buy tickets in bulk from theatres in advance and then sell this to customers. Initially they were struggling with the ecosystem as they didn’t have unified number like today. People could call on a single number 39895050 in any city. They used to run separate call centres and teams in each city with a total of 12 call centres. But after struggling with the ecosystem evolution they came up with own logistic concept. This helped scale up much faster in terms of customers they got on board in shorter period than any system based model would have. After proving the efficiency and effectiveness of Bookmyshow services, the team negotiated a contract to sell a greater percentage of tickets.

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Tickets are sold online, through call centres and various sales channels. The revenue model of the company is simple. Once the customer purchased a ticket and made a payment to Bookmyshow through paymate, giftmate and HDFC netbanking. Tickets purchased on Bookmyshow are subject to per ticket convenience charge which is non-refundable. Bookmyshow charges a convenience charge of 15 rupees per ticket which is their revenue and currently they make more than Rs. 1 crore a month in revenue through movie ticket sales. In case the transaction was not completed within specified time, a call centre executive would call the user to find out if they were any issues and provided support required to close transaction. Bookmyshow acts as the agent to those who are promoting the events for which you purchase tickets (“Event Organizer”) and for movie halls (“Cinemas”). When someone purchases a ticket for an event/movie, Bookmyshow will be handling the transaction and collecting payment for the organizer/Cinema. Bookmyshow sells tickets on behalf of Event organizers/Cinemas and does not control the inventory or its availability. A user entered a queue maintained by the system as soon as he/she initiated the process of booking tickets online. Company software had a provision for real-time tracking of online bookings through its portal.

Marketing and Tie-ups

Bookmyshow was the official partner for Mumbai Indians, Kings XI Punjab and Rajasthan Royals and the official online ticketing partner for Delhi Dare Devils of IPL in 2011. They are also the official ticketing agency for the prestigious Yonex-Sunrise Badminton Asia. Their partners include major cinema chains including BIG Cinemas, CineMAX, INOX, Fun Cinemas, DT Cinemas, SRS Cinemas, Prasads, Wave Cinemas, M2K Cinemas, Movietime Multiplex, Era Cinemas, Spice Cinemas, Fame, Chanakya and Urvashi.

The Future

They suffered two major setbacks in the year 2011. They won the ticketing rights to two IPL teams when the action moved to South Africa and they lost out. Then the movies strike happened, which meant there were no ticket sales. They got together and everyone decided the slabs for pay cuts that ranged between 10 and 30 per cent depending upon the person’s salary slabs. The management at BookmyShow understands well that the future of their business lies in the mobile medium. They have developed special apps for the iphone and BlackBerry handsets to enable smooth purchase of tickets. For the call centre part of their operations, they have installed automated speech recognition software so that people calling in don’t have to take the phone off their ear each time they want to book tickets. Their IVR (Interactive Voice Response) is intelligent and gives customers real-time, region wise updates. has seen it grow from 0.5% revenue contribution to about 8% in the last six months. When the 3G and 4G packages become cheaper, they might partner with mobile companies to offer a data plan or billing tickets. There is no looking back for this company that has overcome many entrepreneurial challenges in its journey.

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