Daybreak - Zomato is on a collision course with India's largest ticketing platform — Bookmyshow

Episode Date: October 14, 2024

Earlier this year, Zomato acquired ticketing platform Paytm Insider. With this, Zomato was able to take its 'going out' strategy to the next level. Since 2018, Zomato has been holding live events. You have probably heard of its its massive carnival-style event called Zomaland. The idea behind it is simple: a big part of going to a movie, or a music festival, or pretty much any live event is the food and drinks. So by being associated with live events, Zomato is able to expand the company’s reach from just restaurants to other spaces where food and beverages are consumed. The Insider acquisition takes this to a whole other level. It will place Zomato in the big leagues and really shake up India’s live-events sector. But so far, this has been a space dominated by one player – BookMyShow. For a long time now, it has been the default choice for both users and big artists because it offers discoverability and visibility like no one else does. But at the same time, it has also been facing some heat for not providing a great customer experience. Case in point: the recent Coldplay fiasco. This is exactly where a formidable rival like Insider could come in and shake things up. In fact, Zomato’s shadow is already looming. Tune in. Daybreak is now on WhatsApp at [phone]. For next Thursday's Unwind, send us your recommendations to us as texts or voice notes. The theme is "favourite folk songs."

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get an alert as soon as we release our first episode, please follow Intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. What do food delivery and quick commerce have to do with movies and live events?

Well, straight of the bat, not a whole lot. Which is why when food delivery giant Zomato announced that it was acquiring the marketing platform PtM Insider, it did raise a few eyebrows. But of course, the deal was by no means random. It was all part of Zomato's larger going-out strategy. Now, let me break that down for you. This strategy isn't new. Zomato's going out business, in fact, far predates the insider acquisition.

Since 2018, Zomato's been holding live events. You've probably heard of its massive carnival-style event called Zomaland. The idea behind it is pretty simple. A big part of going to a movie or a music festival or pretty much any live event is the food and drinks. So by being associated with live events, Zomato is able to expand the company's reach from just restaurants to other spaces where food and beverages are consumed. The insider acquisition takes this to a whole other level. It will play Zomato in the big leagues and really shake up India's live event sector. And this comes at a time when the overall events and ticketing market has really been thriving.

After the pandemic, people weren't just travelling with a vengeance. They've also been attending concerts and events like never before. But here's the thing. So far, this has been a space dominated by one player. Book My Show. Book My Show has been the default choice for both users and big artists because it offers discoverability and visibility like no one. else does. Which is also why

no one was really surprised when BookMy show announced that it was organizing the upcoming India leg of the Coldplay World Tour. We all know how that played out. Everyone and their uncle, literally millions of people, queued up to buy Coldplay tickets last month.

Now, most of them were left empty-handed, but the whole experience was the subject of many memes and angry rants on Twitter. Book My show in the process faced a lot of heat. Not only did the the platform keep crashing and a minuscule number of people actually get tickets, within ours, the same tickets were being resold for lakhs of rupees on other platforms,

like WireGoGo and Stubhub. In fact, Book My Show is now in the middle of a pretty grisly legal battle because of all of it. Now, this isn't a one-off. Industry Insiders say that BookMy Show has long been critiqued for not providing a great customer experience. And this is exactly where a formidable rinked. rival like insider could come in and really shake things up. Zomato's shadow, in fact, is already looming. It is taking a leaf out of the book my show playbook to make it happen.

Welcome to Daybreak, a business podcast from the Ken. I'm your host, Rahil Filippos, and I'll be joining my colleagues, Dikta Sharma, every day of the week to bring you one business story that is worth understanding and worth your time. Today is Tuesday, the 15th of October. Now, the pandemic was tough for Book My Show. Naturally, this was a company that primarily relied on people going to the movies for revenue. But its recovery since then has both been surprising and impressive. The pandemic compelled the platform to shift focus a little bit.

Hence, its renewed post-pandemic push for live events. You see, Book My Show knew how to effectively target specific audiences. That has really worked in its sense. favor. A case in point is the Ed Sheeran concert that the company organized earlier this year. A former executive explained that the company recognized that consumers would willingly spend on large format events with a high-profile artist. It realized this because it was closely studying its movie ticket user base. It analyzed the typical user spending, preferences and the intent of their purchasing power as economic conditions evolve. And all of that brought

it to where it is today. In FI.23, the revenue for the live events vertical was 240 crore rupees. This is nearly a quarter of the company's overall top line. Since then, its revenue has grown nearly 50% to about 1,500 crore rupees in FI-24. BookMy show handles about 15 million ticket sales every single month. So it really is the top dog as far as the ticketing space goes. Now, where does Zomato fit? into all of this. Well, believe it or not, it does have the upper hand in some ways. Firstly, it has access to a gigantic user base. Zomato's food delivery business alone sees over 18 million monthly transacting users on average.

A former BookMy Show executive said Zomato also has the edge as a tech-first company. That can be very, very handy. But for a ticketing platform to work, sure it needs to have the infrastructure to understand consumer patterns and cater to their demands, but the live entertainment space needs players to understand the production and execution side of things as well. And that's exactly where the PtM Insider deal comes into the picture. More on that in the next segment. While Zomato might bring the tech expertise, Ptm Insider has its own unique strengths that could really work to Zomato's advantage. An industry executive, who is aware of the company's plans, said that Insider has a deep pool of resources to execute operationally,

right from box office management to show running to dealing with vendors on site. Now, so far, that has been what Zomato was missing. Don't get me wrong, Insider still isn't the go-to destination for large-format concerts, but it comes with key industry experience, which makes it the right fit for Zomato. In fact, since its acquisition by PATM in 2017, the company is very well. valuation has surged nearly 60x. The team two grew from a dozen members to nearly 300. Today, Insider is the second largest ticketing company in the country after Book My Show, although it is still a distant second. But it comes with some pretty illustrious leadership.

For instance, its CEO, Varun Kare, was a key leader at experiential marketing pioneer fountainhead MKDG and its live entertainment arm, orange juice entertainment. Zomato's also been adding other veterans to the fold, the likes of Zina Wilcassim. That's the chief executive of Zomato's live events business who also helped build the N87 weekend of music festival here in India. Then the company went ahead and hired Kunal Kambati,

who headed live events and IP vertical at Book My Show. Fun fact, it was Kunal who closed Coldplay for Book My Show right before leaving. So it's managed to put together its A-Team. But what's the plan? Well, like I mentioned before, it's all about beefing up its going out vertical. Off-laid Zomato has been going all out.

It's been bringing in more large-scale concerts and high-profile intellectual properties like British pop star Dua Lippa to headline its feeding India concert in November. Or selling tickets for the India leg of Punjabi singer Diljid Dosanj's Diluminati tour, later this year. This is in addition to letting Zomato users reserve tables for dine in restaurants and is already existing live entertainment business. In fact, down the line, Zomato plans to

bring all of this together via an app called District, which is likely to launch in the next few weeks. So it's not just focusing on big events, but it's also listing a lot of hyper-local events. And this is where insiders' understanding of tier two and three markets becomes crucial. To make sense of the consumption patterns and willingness to spend in those regions. Now, here's the thing. Zomato's competition with BookMy Show is not going to have the intended effect on consumers. Stay tuned. So when it comes to pretty much any other sector, quick commerce, food delivery, ride hailing, anything else,

rivals generally engage in deep discounting to win a consumer's attention. But in this space, that just doesn't work. So Zomato taking on Book My Show is unlikely to spend. park a ticket price war. That's because artist fees are typically the largest cost for any high-profile event. The bigger the artist, the bigger the fee they demand. Especially when it comes to international acts. You see, artists expect the same fees in India that they would get anywhere else in the world. So to recover that huge amount, the platform will have to sell at a higher price to more people. And yet, high-profile acts are still selling out. The real war, according to experts in

the space is who will bring which artist or how many events and festivals they will be able to hold. So far, Book My Show has been leading that race by miles. Not only does it have deep pockets to pay hefty fees, industry executives say it also has signed the right of first refusal agreements with major international promoters. What that means is when promoters want to bring their artists to perform in India, Book My Show is the preferred partner for on the ground organization before anyone else. That includes promoters like Entertainment Giants Live Nation and AEG Presents. These have deep rosters of artists signed to their talent management arms. That includes names their Cole Play and even Ed Sheeran. Zomato's incursion, however, now means more opportunities

for artists and more leverage for them to demand bill money. So where does that leave things? Well, now it comes down to who can pay more money and how big the acts they get. really are. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories,

newsletters and podcast extras. Head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was posted by Rahil Filippo's and edited by Rajiv Sien.