ganeshran Posted June 20, 2012 Posted June 20, 2012 Addendum to #92 - for 750 screens you need at least 750 folks at the counter = 750 *8000 = 60,00,000 :omg: Even if you consider only 10% of them would need additional guy - still 75*8000 = 600,000 is double of my conservative estimate above. But that is assuming that if they remove the convenience charges, many more people would start buying online and hence they would be able to remove guys at the counter. If 3 out of a 100 people are buying tickets online currently and after taking out the charges 5 out of a 100 start buying. The remaining 95% would still necessitate the same number of employees in the counter, give or take a few. For the convenience charges to go, the scale of online buying needs to be high enough for it to allow companies to conclusively cut staff.
Crookbond Posted June 20, 2012 Posted June 20, 2012 I don't know how you can be so sure - in fact' date=' when cinemas did start accepting cards or when they started online booking I don't remember any specific announcement saying we are increasing our cost because we are now allowing credit card transactions.[/quote'] Just back off and think about it. A company is passing a cost to the customer for a website hosting and server costs. Do you think that company will bear a cost of each and every of the 2% credit swipe transaction by a customer? Oh Common!
akshayxyz Posted June 20, 2012 Author Posted June 20, 2012 Flawed logic again. My point is that they are charging extra for offsetting the costs they have to pay for servers and transaction costs. These convenience charges comes close to 10% of the ticket fee. Transaction charges itself are in the range of 4-5% of each financial transaction and the remaining costs are for maintaining the servers and developing the website which is another 4%. The no reason point was to highlight that they are charging because there no net savings in the online model currently, something which you asserted there are just a few posts back. Incomplete logic. You are ignoring other tangible and intangible benefits from online sales, providing better service. A customer coming from online sales is more likely to buy their other services too - pepsi/popcorn etc. Bookmyshow which is the leading site in India sells 1 million tickets a month which is spread across 750 screens. This comes to 44 tickets per day, out of a total capacity of atleast 1200 (4 shows a day). This is just 3% of the total movie goers, not a large percentage at all. Add to that a 5% transaction charge to each of the million transactions, salary paid to employees, bookmyshow's own commission that it collects from the theater, infrastructure costs and the convenience charge becomes a necessity for theaters. The alternative would be to bundle it in the ticket itself, but that would increase the prices for the majority who buy tickets at their counter. That is what it should be. Their product is movie ticket, and that is what they should focus selling - and simplify the pricing. Online sales is a feature, that is going to benefit in long run - that is what they should focus on increasing. At least for PVR, they already spike up their weekend rates - sometimes by almost 100%. That does not stop weekend movie goers.
Crookbond Posted June 20, 2012 Posted June 20, 2012 Flawed logic again. My point is that they are charging extra for offsetting the costs they have to pay for servers and transaction costs. These convenience charges comes close to 10% of the ticket fee. Transaction charges itself are in the range of 4-5% of each financial transaction and the remaining costs are for maintaining the servers and developing the website which is another 4%. The no reason point was to highlight that they are charging because there no net savings in the online model currently, something which you asserted there are just a few posts back. Bookmyshow which is the leading site in India sells 1 million tickets a month which is spread across 750 screens. This comes to 44 tickets per day, out of a total capacity of atleast 1200 (4 shows a day). This is just 3% of the total movie goers, not a large percentage at all. Add to that a 5% transaction charge to each of the million transactions, salary paid to employees, bookmyshow's own commission that it collects from the theater, infrastructure costs and the convenience charge becomes a necessity for theaters. The alternative would be to bundle it in the ticket itself, but that would increase the prices for the majority who buy tickets at their counter. Those numbers are of 2009. So, scale those numbers at a growth rate of 30% (that's the e-commerce growth rate) and then we're talking! In any case, the lesser you talk to "me" about server costs the better. It's peanuts to maintain bookmyshow servers. Take that at face value.
akshayxyz Posted June 20, 2012 Author Posted June 20, 2012 But that is assuming that if they remove the convenience charges, many more people would start buying online and hence they would be able to remove guys at the counter. If 3 out of a 100 people are buying tickets online currently and after taking out the charges 5 out of a 100 start buying. The remaining 95% would still necessitate the same number of employees in the counter, give or take a few. Where did you get this number from? Besides, I think that 3/100 number is for all movie theaters, all over India. We are talking just about PVR. I am sure for them, it must be around 20+%. For the convenience charges to go, the scale of online buying needs to be high enough for it to allow companies to conclusively cut staff. Self-enforced Chicken-egg? Almost ( because 20 is not yet deterrent).
The Outsider Posted June 20, 2012 Posted June 20, 2012 Fair point. As for PVR: http://en.wikipedia.org/wiki/PVR_Cinemas Not that small chain. 40 locations, 40 less guys at counters - should be enough to cover the cost of server, which can easily be scaled to service 100s of more screens they might be planning to come up with. I didn't know PVR was that big. However, it also becomes a decision with the business model. Maybe at some point PVR will set up it's own payment system rather than outsourcing it, but these become very tricky business decisions when you are branching out from your area of core competency into something completely different. And if they do set their own system up, they would obviously want to sell it to smaller theaters as well - it brings along it's own set of complications.
The Outsider Posted June 20, 2012 Posted June 20, 2012 Just back off and think about it. A company is passing a cost to the customer for a website hosting and server costs. Do you think that company will bear a cost of each and every of the 2% credit swipe transaction by a customer? Oh Common! Maybe it's charging more from the online customers to cover for those credit card charges made in person rather than passing on the cost to people paying cash?
The Outsider Posted June 20, 2012 Posted June 20, 2012 That is what it should be. Their product is movie ticket, and that is what they should focus selling - and simplify the pricing. Online sales is a feature, that is going to benefit in long run - that is what they should focus on increasing. At least for PVR, they already spike up their weekend rates - sometimes by almost 100%. That does not stop weekend movie goers. I don't agree. It doesn't make sense to irk 95% of your clientele to spread the cost around for the remaining 5% who are benefiting from using a service.
ganeshran Posted June 20, 2012 Posted June 20, 2012 Those numbers are of 2009. So' date=' scale those numbers at a growth rate of 30% (that's the e-commerce growth rate) and then we're talking! [/quote'] I took the 1 million tickets number from their last quarter financial report. Pretty sure they would be selling far lesser in 2009 http://www.network18online.com/reports/N18InvestorUpdate_Q3FY12.pdf Servers dont maintain themselves. You need administrators, developers, managers, business analysts and their like which are high paid white collar jobs to run the website. Bookmyshow has around 200 employees whose salaries have to be paid from the profits they make. They became profitable only in Q4 of 2012 despite having a large marketshare, shows how tight the margins are in the business even after charging a 20 rupee convenience charge on each ticket. If they didnt charge a convenience charge, they would pass this cost on to the theater owners who would include it in the ticket prices which makes it expensive for even people who buy at the counters
ganeshran Posted June 20, 2012 Posted June 20, 2012 I didn't know PVR was that big. However' date=' it also becomes a decision with the business model. Maybe at some point PVR will set up it's own payment system rather than outsourcing it, but these become very tricky business decisions when you are branching out from your area of core competency into something completely different. And if they do set their own system up, they would obviously want to sell it to smaller theaters as well - it brings along it's own set of complications.[/quote'] PVR does have its own payment website, they dont outsource AFAIK.
The Outsider Posted June 20, 2012 Posted June 20, 2012 PVR does have its own payment website' date=' they dont outsource AFAIK.[/quote'] Ah okay. I thought they were outsourcing to BookMyShow.
akshayxyz Posted June 20, 2012 Author Posted June 20, 2012 I don't agree. It doesn't make sense to irk 95% of your clientele to spread the cost around for the remaining 5% who are benefiting from using a service. First of all, I am not sure whether its as skewed as 5-95, in case of PVR. Even if that is what it is - distributing Rs20 coming from 5, to 100, is not going to change more than 5*20/100 = 1 Re per head. And combine that with the fact - (on PVR), on weekends a ticket (esp for new movies) price is almost 100% more than that on weekdays. And still, occupancy is more on weekends. I would think there are other factors that are very well paying for the convenience feature - than Rs 20 coming from 5%. And I do not think suddenly their operating costs go up by 100% on weekends. Its typical baniya biradari, trying to take every penny from whoever, whenever they can. So, IMO: If there is significant # of online buyers - it should save them significant cost. If there is very little # of online buyers - Rs 20. does count much, and can be easily distributed over whole customer base - without anyone noticing.
akshayxyz Posted June 20, 2012 Author Posted June 20, 2012 I didn't know PVR was that big. However' date=' it also becomes a decision with the business model. Maybe at some point PVR will set up it's own payment system rather than outsourcing it, but these become very tricky business decisions when you are branching out from your area of core competency into something completely different. And if they do set their own system up, they would obviously want to sell it to smaller theaters as well - it brings along it's own set of complications.[/quote'] Its about who is sitting at the top, and what competition they have. Answer to first is, some typical desi baniya, and second is - no they have no competition ( or example to follow) and its a slow growing market (with piracy, it must be even slower). So - my key point are: - they are leader in their business - others are going to follow similar practices - and I expect them to set better examples. - The tag "Convenience Fee" - looks ugly.
akshayxyz Posted June 20, 2012 Author Posted June 20, 2012 btw - even though I always knew (from economics/convenience point of view) that I have more to gain by booking online. Still it (the tag) always irked me a bit, and many have shared similar sentiments. After this discussion, it does look a bit less evil. But only a bit, only for the moment :)
The Outsider Posted June 20, 2012 Posted June 20, 2012 First of all, I am not sure whether its as skewed as 5-95, in case of PVR. Even if that is what it is - distributing Rs20 coming from 5, to 100, is not going to change more than 5*20/100 = 1 Re per head. Well no one will increase the cost by Re.1 - it'll usually be done in increments of Rs. 5. And combine that with the fact - (on PVR), on weekends a ticket (esp for new movies) price is almost 100% more than that on weekdays. And still, occupancy is more on weekends. I would think there are other factors that are very well paying for the convenience feature - than Rs 20 coming from 5%. And I do not think suddenly their operating costs go up by 100% on weekends. Its typical baniya biradari, trying to take every penny from whoever, whenever they can. Now that would be a more legitimate complaint because a 100% hike is huge and exploiting the fact that people cannot get away on weekdays more easily. What's more you are not getting any actual service out of it like in the case of the Rs. 20 online purchase where you are actually saving money by not making a trip to the theater twice. Are a lot of cinemas, theaters, and stadiums in the US of the typical baniya biradari as well - they employ the same model? So, IMO: If there is significant # of online buyers - it should save them significant cost. If there is very little # of online buyers - Rs 20. does count much, and can be easily distributed over whole customer base - without anyone noticing. Many gas stations in the US have gas cheaper by around 10 cents a gallon if you pay by cash and many don't - they just absorb their credit card transaction costs into the gas prices. I don't see anything wrong with the model offering cheaper gas for cash if I can remember or bother to go to an ATM before filling up to save $1 every time. To me it looks like you are more concerned about the Rs. 20 being labelled as a convenience charge - think of the regular price as a discounted price for the person who chooses to stand in line and pay by cash.
The Outsider Posted June 20, 2012 Posted June 20, 2012 Its about who is sitting at the top, and what competition they have. Answer to first is, some typical desi baniya, and second is - no they have no competition ( or example to follow) and its a slow growing market (with piracy, it must be even slower). There is enough competition in the US - I won't talk about cinemas because hardly anyone purchases tickets online for movies since they are very rarely sold out. But for plays, there is a lot of competition and pretty much every show in NYC has some sort of service/convenience charge if you purchase the tickets online.
akshayxyz Posted June 20, 2012 Author Posted June 20, 2012 Just to be sure that I was not exaggerating numbers Today I am paying Rs 100 (+20) for "Prometheus" Tomorrow (Thursday) the website is showing Rs 180 ( +20) for the same show, same movie. Last Friday <-> Sunday, it was ~300. Anyway, there is a reason - why I am counting numbers and advocating fairness/best-practices, and that baniya is counting notes :( - and this is not going to change anytime sooner. I better shut up and pay Rs 20, or get my home-theatre... and pay for end-to-end convenience fees by myself :)
akshayxyz Posted June 20, 2012 Author Posted June 20, 2012 :WTF: I did not know PVR is a public company!! [url]http://www.google.com/finance?q=NSE:PVR[/url]
The Outsider Posted June 20, 2012 Posted June 20, 2012 BTW, just went to the PVR website. 1. Why do they have tickets only for Wednesday and Thursday? They don't book further out in advance? 2. The site is really slow. 3. What are Classic, Star, and Premier? Last time I watched a movie at PVR (quite a few years back) don't think they had a balcony like the traditional theaters?
Crookbond Posted June 20, 2012 Posted June 20, 2012 Just to be sure that I was not exaggerating numbers Today I am paying Rs 100 (+20) for "Prometheus" Tomorrow (Thursday) the website is showing Rs 180 ( +20) for the same show, same movie. Last Friday Sunday, it was ~300. Anyway, there is a reason - why I am counting numbers and advocating fairness/best-practices, and that baniya is counting notes :( - and this is not going to change anytime sooner. I better shut up and pay Rs 20, or get my home-theatre... and pay for end-to-end convenience fees by myself :) Try - http://movies.io/
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