Why Ticketing Companies are Dying
It’s been a fascinating ten years watching the ticketing sector as it wrestles with technological change. The world has been transformed in that time via the mass adoption of the smartphone and other technology advances yet even until very recently it’s a sector that has felt stuck in the 1950’s and the paper Admit One paper stub.
The ticket industry has innovated a lot in that time and to a certain level has embraced the advances in technology. This should be a good thing but it has led the sector to becoming one that is highly digitised though not yet a digital business.
What does that mean?
It’s clear that the sector no longer is dependent on you physically approaching a box office and buying the tickets in a manual sense. You are however still needing to do that from a digital perspective. For example if you wish to purchase a ticket to an event you will in all probability need to go to the event site – say Coldplay’s website, the promoter or venue site which could be Wembley or the O2 or the ticketing site which in most cases still comes back to one of just a few companies such as Ticketmaster, See or AXS.
This is a digital ticket and sometimes you will be sent a physical copy to present on entry or in some venues use your phone to gain entry. So far so good but there are a few issues with that.
First of all, you must know the event is happening. If you don’t know it’s on how would you know to go to one of those three sites? Speaking to industry executives there is however a common theme that comes through in the data – c40% of all ticket inventory goes unsold (not for Coldplay!) and the number one reason for this is that the market doesn’t know the inventory exists – hence they don’t acquire it.
If you are a big fan of an event, a band or a team that’s fine but today’s consumer is less entrenched in having single obsessions and as such likely to not be going back to ticketmaster.com every week to discover interesting content – they use a plethora of other channels for that. It has required companies like SongKick to emerge to make ticket companies reach out to the streaming businesses such as Pandora, Spotify or even Apple Music.
One of the ways the sector approached this issue historically was via the acquisition of content businesses. Ticketmaster and Live Nation or AEG and AXS are great examples of where ticketing and content have come together. By controlling the content or the venues you can control the ticketing. This was a smart play and ensured primacy in an increasingly competitive world. It also forced the audience to come to one of your sites to acquire the tickets but this was in an internet 1.0 world – pre-social media or the big data era.
Secondly most ticketing businesses tout themselves as an e-commerce site. Yet try to purchase anything other than a ticket and you will probably have issues. This doesn’t make a lot of sense because if you are Coldplay fan and buying the ticket would it not also be a good time to offer them the official merchandise, programme or live recording? As Google likely knows where they live it would even be possible to offer a travel ticket to the venue. True e-commerce will offer some totally different opportunities – and is likely why companies like Amazon and Google are making strides into this space as the ticket is just a small element of the human interaction.
True innovation has typically always come from outside sectors and ticketing is no different. Technology has generally been used by the industry to speed up the and simplify the way it does business, but as with many spaces that doesn’t mean that technology has been used to change the way it does business.
The problem is that newer ways of doing business are appearing and threatening how the business of tickets will be conducted in the future. Amazon’s own website talks about the space being ripe for disruption. The ability to mix the ticketing data set with a much wide pool of big data offers some really interesting perspectives, combine it with Amazon Prime’s streaming products and you can start to see a different way of looking at the space.
A few years ago I was privy to the investment document of a major ticketing player. It made for a fascinating read. Two of the key issues that could be identified were portrayed as advantages.
The first was that the executive team had an average of above 15 years of experience in ticketing. The problem with that of course is that there looked like little opportunity for that management group to think differently and challenge the mainstream model.
The second was that many of the commercial leads were former technology people who sold a product they knew. What this suggested though was that there was a probable lack of commercial understanding of how the world was changing for rightsholders and consumers alike.
Lastly I was shocked to see there was no Chief Product Officer or equivalent in the company. This seemed nonsensical as surely a ticketing business needs someone navigating the commercial priorities and the art of the possible on the tech side?
With all this in mind it wouldn’t be terrible surprising if the content and ticketing spaces separated again, it’s a typical cyclical way of viewing things, but equally you can start seeing how the streaming businesses that have paired up with mainstream ticketing companies may look to move upstream. Equally companies like Dice.fm, Atom and Songkick and their use of technology to be in ticketing – somewhat different to ticketing using technology – may offer some further disruption before we start to see the dust settle.
What has been good is that the innovation from outside has begun to force the major players to rethink how they do business. The move in 2016 by Ticketmaster to embrace open API’s to broaden their distribution whilst probably a little too late in terms of timing will only benefit the consumer and ensure that we begin to see more opportunities and broader distribution – and if more inventory ends up getting sold that good for the rights holders and hopefully the ticketing companies as well.