Paytm and BookMyShow are the only two companies that operate online movie ticketing services in partnership with multiplex chains and single screens. File. | Photo credit: Reuters
Booking movie tickets online has never been more expensive – companies like BookMyShow and Paytm charge seven to 16% of the ticket price as “internet handling fees” or other similar additional charges. The fees on cinema chains’ own booking platforms are no different – up to Rs 100 for a typical afternoon screening Chandu Champion For example, a fare of Rs 490 in Delhi on weekday afternoons will increase to Rs 556.08.
The question of convenience fees is not why they are charged – booking sites and intermediaries in the industry generally charge what consumers are willing to pay, even if the fee is higher than the cost of actually providing the service, making a profit and growing their business, as any enterprise looking for profit does. What is curious, however, is that this particular industry does not require large investments in delivery agents, as with the app-based food delivery industry or instant commerce firms, which have to pay individual delivery agents and maintain dark stores from where products are dispatched.
So, in the movie ticketing space, exorbitant convenience fees have led to a peculiar phenomenon: a virtual duopoly devoid of physical activity that justifies the high costs, with no outside competition able or willing to enter the market. Electronic booking technology, despite the proliferation of cost-effective cloud and hosting solutions, has remained largely stagnant, lacking meaningful innovation (except for ticket cancellation, which partially reimburses moviegoers who change their plans). This anomaly stands out in an era that sees infrastructure costs falling.
Paytm and BookMyShow are the only firms that operate online movie ticketing services in partnership with multiplex chains and single screens. At least one that has tried to enter the space and offer lower costs has been rebuffed by the exhibition industry: Hyderabad-based advocate Vijay Gopal told the Competition Commission of India in 2022 that BookMyShow had exclusive partnerships that imposed high convenience prices on consumers and shut potential competitors out of the market. BookMyShow did not deny exclusivity agreements in its response to the CCI and the commission ordered an investigation by its director general. Two years later, there has been no further progress in that case.
A BookMyShow spokesperson declined to answer specific questions about whether the company had arrangements with exhibitors that excluded potential competitors, but said in a statement that the company “conducts its business with the highest standards of compliance with all laws in all its business practices and operations” and that it would cooperate with “any inquiries” by the authorities in such matters.
The “Internet Handling Charges” remain at the same level as offered by the multiplexes’ own websites, even though both the main multiplex chains in India – PVR Inox and Cinepolis – have started delivering tickets bought in theatres digitally, for which they do not charge any additional fee.
Paytm did not respond to questions on its ticketing business. Zomato Ltd. disclosed in a June filing that it was in talks to buy the payments firm’s movie ticketing business to boost its “going-out” business.
Mr. Gopal alleged in his antitrust complaint that when he tried to launch a movie ticketing service — BookMyShow said it was not a serious attempt and that its site was created only shortly before his complaint — cinemas told him the company made them pay a lock-in fee to prevent them from striking a distribution deal with potential competitors. While BookMyShow’s response to this specific allegation was unclear due to a redaction of the CCI’s probe order, it did admit that it shares a portion of the convenience fee with cinemas.
Bhumika Agrawal, a researcher at tech policy consultancy The Dialogue, cautioned that “it would not be correct to say that high handling fees and low numbers of players always indicate collusion or special arrangements,” something that “can only be conclusively established once the CCI decides the case”. An executive in a different ticketing industry speculated that since the multiplex industry is largely consolidated, these firms are able to demand better financial terms from ticketing intermediaries, who pass on the costs to consumers. Another consequence of this situation is the high barrier for new entrants to the sector, who must meet these financially prohibitive arrangements from the outset.
The draft Digital Competition Bill (DCB) may have some impact on the prices of the two online ticketing firms, even if not immediately: “The DCB specifies the core digital services covered by the law, which include ‘online intermediary services’. This definition includes digital services that handle electronic records or provide related services, which is broad enough to include ticketing platforms,” Ms Agarwal said.
While movie ticketing firms may not qualify as “systemically important” for scrutiny under the bill simply because of their small size, Ms. Aggarwal said they could fall into that category because of “qualitative criteria.” The bill has faced a lot of opposition from big tech platforms and has not yet been finalized.
