Death by a thousands cuts: Using Moneyball thinking to strike out Ticketmaster
In 2002 the Oakland A’s shook the baseball world to its core. They did so by completely rethinking assumed baseball truths and executed on it. As an underdog they successfully challenged the dominant big-money competition, thereby changing the game forever.
The evident problems in the event industry have been stagnant for decades — irregardless of all drastic technological progress, ticket scalping has somehow gotten worse. Traditional ticketing thinking is medieval. We believe we are on the cusp of a “Moneyball”-like revolution for the entertainment and event space. Welcome to Ticketball.
By Kasper Keunen, blockchain developer at the GET Protocol Foundation.
The story of Moneyball
The movie Moneyball tells the story of Billy Bean the general manager at the Oakland Athletics around the year 2002. His approach to managing his team flipped traditional baseball-thinking on its head — changing the sport forever. This was achieved by rethinking the foundations of managing a team from first principles.
At GET we like to say we are rethinking ticketing. But what does that mean? Well, in short just like Billy, we don’t intend to compete with the status-quo ticketing giants on their same turf. To switch it up a little I will be using clips from the Moneyball movie to provide context and colour. The clips in this article are set the correct moment as to save you time.
So, what is the problem?
The dominant ticketing companies own large parts of the event vertical. The leverage they create with this integration allows them to separate the ticket asset from the experience of attending an event. This point might seem rather pedantic, but the significance of this separation will become clear in the next paragraphs.
What are fans buying? Really..
When buying a ticket for Taylor Swift from Ticketmaster in the Ziggodome a fan is arguably mainly paying for access to the LiveNation moat of companies enabling the show, than that they are buying for the right to see Talyor perform for her fans.
The leading ticketing companies product isn’t selling access to the venue with an artist delivered-experience. They are selling access to their monopoly moat. Within this moat they control the prices, margins and rules.
Fans and artists are fed up with this (and have been for decades).
In the ticketing space there seems to be a misunderstanding to what the event industry is really about. Jonah Hill is just as fat as me, but far more eloquent so I’ll let him do the talking to drive this point home.
So now to answer the question Brad posed so eloquently; the problem is that our competition isn’t in the business of selling QR code tickets — the business we think we are in. Our competition is selling access to their monopoly moat. If we at GET innovate and offer objectively better ticketing features (no scalping! transparent! etc) these improvements are technically not really competing with the proposition of our largest competitors.
Understanding their actual product; their stock story
LiveNation(i.e Ticketmaster) sells tickets, sure, quite a lot actually. But LN management focuses not on maximizing fan happiness but the value proposition of their their publicly traded stock. The bonuses of the c-level employees depend on the stock price, so this focus is not an accident.
Serving investors not fans
Stock investors generally don’t buy a stock for a claim on real estate or cash on the balance sheet of the company. It is about a company’s ability to generate more revenue in the future. Besides being able to project growth in revenue, it is just as important to demonstrate that the company controls their operating margins.
For example. If a company pumps up oil and sells it on the market right away, their margins are for a large part set by the global oil price. This lack of control over margins will be reflected in the stock price(negatively). By buying up refineries and/or shipping companies they can increase their control on their margins as they can now optimize timing when selling their oil products. This practice is called vertical expansion and there is nothing inherently wrong with the concept, it makes a lot of sense economically.
This blog isn’t a plea against capitalism. On the contrary. In my view monopolies are against the capitalistic ideal as they kill open market competition in the cradle.
An entertainment monopoly
This vertical expansion has been taken to the extreme by companies like LiveNation, as of today LN dominates the entire vertical. Their ability to control operating margins provides their stock with a large premium. At their current size, they can objectively be labelled a monopoly. This is bad for everybody. Fans and artists are squeezed for every last penny. Que the “Ticketmaster sucks” articles. Nothing is going to change, regardless of outrage. Why would they?
So clearly, the ticketing industry is stuck in the monopoly gridlock. Old thinking killing innovation. Brad, tell us why it matters to even try to face Goliath.
So, what would Billy Bean do?
Billy Bean realized that the way traditional baseball clubs valued players was misconstrued. Billy found that ‘star’ players in the baseball league were structurally overpriced when compared with a players contribution in overall team performance.
The bias of overpricing star-players isn’t so much a management mistake as it is the logical conclusion of having an unclear view on what the target is. Star players bring allure to a club, fans love them(employees are often fans as well), more jerseys are sold, etc etc. Over time these narratives will lead management astray. Leading then to overpay star players.
We believe that the same has happened in ticketing, the excessive focus on vertical integration has created an ecosystem that isn’t focused on selling experiences but maximizing margins at any cost.
Ticketing companies have lead themselves astray of what they are actually selling; an experience between a fan and an artist. We perceive this as our opportunity. Direct artist to fan engagement and connection is under-priced. Drive this one out of the stadium Jonah Hill:
GET & rethinking the ticket
A ticket is a right of entry, to experience something offered by an artist. The tooling offered by the GET Protocol allows anybody regardless of size or ticket volume to become their own ticketing company (with full control & access over data).
For artists and creators, becoming your own ticketing company, should be as easy as launching a webshop..
Tried, tested & operational
The thesis posed in this blog might sound like a castle in the sky sort of proposition but this could not be further from the truth. This model as described is tried and tested.
Since 2017 the GET Protocol has sold 500 000+ tickets mainly by cooperating directly with artists. Even though artists are often interested in GET because they prefer not to *** over their fans. They tend to stay for the superior experience and the control over their business they never deemed possible.
It is about allowing the artist to take control and ownership of their relation with their fans. That is our product, a product that the competition isn’t valuing at all. That is the game we are playing.
Evidently not every artist wants to start their own ticketing company(most gladly pay for not having to think about it). Our whitelabel-toolset allow for both start-ups as well as established players to offer a modern ticketing service and target a specific region, industry or experience.
Even though we have only just made the tooling available the GET Protocol is already powering a set of promising local/focused ticketing companies:
- GUTS Ticket (Netherlands)
- getTicket (Korea)
- Wicket (Italy)
- tecTix (Germany)
- & more!
Ticketball — by GET Protocol
Billy realized it isn’t about buying homeruns, but about buying wins. Ticketing isn’t about building moats, it is about about connecting fans with artists. This doesn’t need to come at the expense of ease of use or stability. The comfort of using a monopolistic service can be recreated in the aggregate. While the service itself is provided and operated by local/focused suppliers. The tried and tested tooling these players use ensure stability. Tell them Brad.
Billy Bean didn’t need a blockchain, why does ticketing?
I don’t want to get into the technical weeds in this post. If you are interested on why we use blockchain, NFT assets and ensure data & asset interoperability please refer to the blogs linked below:
The Desert of the Real — Introducing getNFT Tickets
NFTs are all the rage at the moment. As is tradition in crypto the term ‘NFT’ is being massively overloaded. It is…
Decentralizing Event Financing — Liquidity x DeFi x NFTs
For the last couple of months we have been working hard on adding a new feature set to our protocol. In this blog I’ll…
Tokenize the right of entry — Using NFTs to solve ticket scalping
It is a well known fact that the primary and secondary ticket market are highly inefficient. At times it seems that…
In addition, the GET Protocol is open source. Several of our repos are already available to the public (but far more will follow):
Contract overview and definition of the GET Protocols getNFTs. Allowing P2P trading of smart tickets, lending and more…
Call to action. We are looking for ticketing companies, innovative organizers and blockchain companies to join our effort to completely rethink ticketing and move power and control away from the conglomerates and back to the artists and fans (and maybe they’ll make a movie about us).
More about GET Protocol
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