November 16, 2016:Eventbrite CEO talks 2017 profitability and secondary ticketing

Launched a decade ago, self-serve ticketing platform Eventbrite has raised just shy of $200m, joining the ‘unicorns’ club of companies valued at more than $1bn in 2014. Now co-founder and CEO Julia Hartz says that in 2017, the company will be profitable.

“2016 been a really exciting year,” Hartz, who took over as CEO in April, told Music Ally. “I call it a year of great learning for us because after 10 years in existence we are on the path to profitability; we will be profitable in the first half of next year.”

Music is key to this uptick in the company’s financial fortunes, as is Eventbrite’s acquisition in February of event-management system Queue.

“What was different this year compared to past year was that we made a concerted effort to focus on and invest in music,” said Hartz. “Because we have this great ecosystem of 2m events that we ticketed last year across many, many different types of categories, we really didn’t need to focus on one category.”

To this end, Eventbrite is targeting venues in the US with an upper capacity of 1,200 to become their ticketing provider. Hartz says there “are thousands in the US but far more internationally” with her company planning to court European music venues towards the end of 2017

It will begin by integrating the Queue functionality into its own platform, which will be available in the US by the summer, and then localising it in Europe. “This is a new market for us,” she explained. “We have never focused on music venues before.”

Hartz said the company’s philosophy is “democratise access to get technology and ticketing” and held up the fact that 560,000 event organisers and 45m ticket buyers use the platform each year as proof of it working. It is, for now, happy to focus on smaller venues and will not encroach on Ticketmaster’s terrain just yet.

The types of events and size of venues that Eventbrite works with mean it hasn’t had to deal too much with the issue of secondary ticketing yet. However, that doesn’t mean Hartz has no opinions on the issue that’s currently making waves in the UK and Europe.

“It’s an interesting problem because I think many people are misinformed about secondary tickets,” she said. “The misinformation comes from the idea that there is a small group of people who are creating bots to go in and scalp these tickets to sell them at a higher value – and that the benefit is only going to the ticketing company or a small number of people including the broker. The fact of the matter is that more people are in on these deals that anyone would like to admit.”

She added: “More often than not, the organisers and promoters are actually in on the fact that this is a revenue channel – and if they can share in that revenue then it starts to become a bit more palatable for them. Consumers certainly don’t enjoy paying these high fees and these high prices.”

hartz

Hartz thinks one solution will be the development of smarter and more dynamic pricing in the primary ticketing market.

“Consumers who buy tickets on secondary ticketing sites are doing that because they want access to that experience. How do you give more and more people access to the experience at the appropriate price point?” she said.

Where is gets a bit complicated is oftentimes it’s a great media story to talk about the artist who refuses to allow their tickets to be sold on secondary. Often that happens anyway. It’s hard to stop peer-to-peer transfers per se on places like Craigslist. I think it is missing the point of what that ticket is actually worth. There should be a way for you to price dynamically the ticket to be able to create access points for consumers.”

Mumford & Sons’ manager Adam Tudhope recently claimed that the band “lost” £3m to secondary ticketing on a recent US tour: i.e. money that went through secondary sites but was not paid back to the band.

“If the reality is that consumers paid $3m more than Mumford & Sons wanted to charge, what’s the difference? Only Mumford & Sons know that,” was Hartz’s response when Music Ally brought that claim up. “There has to be a fair and honest way to do this where people aren’t pointing fingers at a problem that could be solved together. I think everyone wants the same thing. Artists want to play to their fans, their fans want to see them and everybody surrounding the experience wants to make profit.”

Hartz sees this as a problem to be solved, partly through technology. “There is some thought that needs to get put into this e-commerce solution,” she argued. “I don’t know if we have got pricing correct on just the access to the live experience. That’s where I would like to focus first. Artists or their managers might have an idea of what price they can command, but why not test it? Why not test price elasticity and see what you can actually demand?”

Should it work like budget airlines where early buyers get tickets cheaper and they increase in price in line with increase demand – and drop in price as a way to stimulate that demand?

“I am flabbergasted that we haven’t seen a bigger prevalence of that in live,” said Hartz. “There is this notion that the artist doesn’t want to do anything that will hurt the fan. I admire and respect that; but I honestly don’t know if, in doing that, it gives rise to this secondary market, which is a bad experience for consumers. We can all agree that nobody feels great about buying a ticket on secondary – unless it’s last minute, they don’t have a budget and they are just happy to be going to the experience.”

Hartz suggested that the online travel business may hold some of the keys to improving the way concert ticketing works for fans and artists alike.

“Look at sites that are wildly popular like Priceline or Expedia where there is a discovery element, they are pricing their inventory dynamically all the time – or Booking.com, which does a great job of this,” she said. “There are some lessons we can learn in ticketing here. That’s a more analogous market to us than any commerce market.”

Eamonn Forde
READ MORE: Analysis News
TAGS:
Leave a Reply

(All fields required)