Inox Leisure, one of India’s largest multiplex chain, has terminated their contract with BookMyShow (BMS), after a disagreement over payments. The issue started earlier this month, when Inox sought more money from BMS for the rights to sell its tickets. BMS refused, citing the clauses within the contract signed in 2016 that’s valid until 2023. The disagreement led Inox to scrap the deal, citing alleged breach of terms by BMS.
Industry experts said that by going off the BMS platform, Inox’s ticket sales may suffer. BMS alone generated over 32% of Inox’s box-office revenue. Online channels including BMS, Paytm and its own website and mobile app contribute about 44% of Inox’s revenue. Since the fallout with BMS, Inox has been promoting its website on digital media and targeting customers via emails, text messages and social media with heavy discounts and cashbacks. Inox has started cashback offers for tickets sold by Paytm too.
The whole issue started when BMS renewed their contract with PVR wherein they committed to pay them more amount of money than they currently do and hence Inox demanded similar terms with BMS. But with BMS claiming they have the contract valid upto another good 3-4 years, they obviously refused to comply with the same.
In this whole scenario, Inox is at a bigger loss than BMS and their rivals will be at an advantage due to this. BMS generated over 30% of Inox’s revenue and that may seem like a small percentage but the numbers are obviously quite huge. They can’t say with all certainty now that they will recover that loss of business in some way or the other because no matter of all the discounts and offers, people, specially Indians like to see and compare the prices and everything and most importantly their convenience. BMS was the most convenient option by far to book the tickets and even if there are Inox loyalists, there’s going to be at least half the business they are inclined to lose.
With this, now obviously their rivals like PVR, Carnival, Cinepolis, etc are to gain. let’s suppose Inox only some of their business but still that loss is someone else’s gain. PVR and Cinepolis already witnessed higher ticket sales in the two weeks following Inox’s absence on BMS. I hope they sort out this mess and soon, for their own good.
By – Amul Vikas Mohan