The live industry is exacerbating the secondary ticketing market by over-hyping shows a year in advance so they sell out on day one while at the same time not giving consumers a proper avenue to sell on tickets they have bought but cannot use.
This is the claim of StubHub’s GM of international, Estanis Martín de Nicolás, when discussing the industry position of the eBay-owned secondary ticketing site.
“There is a disparity between the needs of the promoters and the consumption habits and needs of the consumer,” he argues. “The promoters want to sell out their tours on the first day of an on-sale. Sometimes they sell tickets for a festival or for a major tour some six, nine or twelve months ahead of the event. They want to sell everything on day one and they want to capture the share of the consumer spend early on.”
He adds, “The consumer on the other hand wants – and this goes with their lifestyle changes – more flexibility. The consumer likes to be able to buy tickets to an event in a more spontaneous way whenever it is convenient for them.”
Martín de Nicolás was speaking to Music Ally about his company’s $165m acquisition of Spanish secondary site Ticketbis in May, which will take the company from four markets (the US, Canada, the UK and Germany) into 50, including several Asian and South American markets for the first time. He also wanted to talk about StubHub’s new virtual reality offering within its app that gives the user a view of the venue from the exact seat they are looking to buy a ticket for.
The conversation, inevitably, was dominated by the love/hate relationship that secondary sites have with the live industry.
On the one hand, two of the biggest secondary platforms (Seatwave and Get Me In!) are owned by Ticketmaster, the world’s dominant ticketing company, itself part of Live Nation, the world’s largest live entertainment company.
On the other hand, the recently launched FanFair Alliance in the UK, fronted by artists and their managers, is looking to affect real change here where they feel the UK government (especially in the Waterson Report) has been unwilling to tackle this issue head on, chalking it down to an entrepreneurial spirit that is the lifeblood of a free market.
Naturally, Martín de Nicolás will not be drawn into discussing the FanFair Alliance or its goals. “We are not commenting on FanFair Alliance,” he says. “But we believe that we help regulate the market and inform [consumers] of the real market value of tickets. Sometimes they go for above face value when acts tour in small venues but when they sell more tickets than there is demand for, very often they go for below face value.”
While there will be some fans who find they cannot attend a show, the vast majority of tickets on the secondary market are being flipped by opportunistic people – either individuals or part of organised teams – hoping to turn a quick profit on live concerts and events where demand far outstrips supply.
Martín de Nicolás Says sites like StubHub are fulfilling a public function and plugging a gap that many in the primary market are unwilling to address. “We bring a lot of value to the consumer and to the industry,” he argues. “We have seen a trend – both in the US and the UK, which are our largest markets – where the percentage of people who buy tickets in the last few days before an event has more than doubled in the last three years. In the UK, it has gone from 12% to 25% of the people buying tickets who do so in the last three days before an event. In the US, it is even more acute. Some 30% of the purchases in the US happen on a mobile app on the day of the event. The consumer wants that flexibility [to decide to buy at the last minute].”
He adds, “If you want to buy on the day, your only option is a secondary site as the primary sites have already sold out on day one – which is nine months or twelve months before the event.”
What, though, of sites like Twickets that permit this consumer flexibility, allowing the exchange of tickets in a safe and controlled environment but also one in which profiteering is prohibited and unwanted tickets are sold at no more than face value?
“The statistics are the best way to address this,” he says. “About 50% of the tickets that are sold on our platform are sold below face value. What makes the news is a ticket for Adele advertised for £24,000 on the platform. The fact that a ticket is advertised at a certain price doesn’t mean that the ticket is going to sell at that price. When the tickets are offered at outrageous prices, the most likely outcome is that the ticket will not sell and will be worthless.”
He continues, “We see a sharp deceleration of prices as the time of an event approaches as it is a perishable good. The moment an event happens, if you haven’t managed to sell the ticket, it is worth nothing.”
One accusation coming out of the launch of FanFair on 15th July was that sites such as StubHub were creating a secondary economy around tickets but that this was a revenue stream that the artists themselves were not participating in. Music Ally asked if StubHub would create a profit-share model to appease those artist criticisms?
“That could be one of the ways of doing it,” he said before passing the blame again to the primary players. “Also coming out of the Waterson Report, some of the recommendations suggested that the promoters and primary sellers could do more to avoid bots – having proper anti-bot technology – and being more transparent about the allocation of tickets. The reality is that when an on-sale happens on a Friday and they have 50,000 tickets, say, a big percentage – sometimes up to 80% – are not being allocated by that promoter. They have already allocated them to mobile phone operators, credit card companies, artist fan clubs and so on.”
When Music Ally covered the FanFair launch, Brian Message of Courtyard/ATC said that secondary ticketing could be regarded as “live music’s Napster”. Music Ally puts this to Martín de Nicolás. “I completely disagree,” he says. “I think we play a very important role in matching supply and demand – and giving the fans a safe and secure marketplace to see and buy tickets where it is convenient for them. The vast majority of sellers on our marketplace are individuals that need to have that flexibility to sell a ticket to an event when they are unable to attend; or to be able to get a last-minute ticket to their favourite artist when they realise they have the financial resources. Without the secondary marketplace, you don’t have that flexibility or that possibility.”
He cites the example of independent festivals such as Standon Calling in the UK (who work directly with StubHub) as proof that they are not the pariahs some of the industry would like to paint them as.
StubHub’s position as enemy of the live industry/saviour of the consumer [delete depending on your political position] is only set to increase with its acquisition of Ticketbis.
“We have had our eye on them for two or three years,” he says of why StubHub bought the Spanish operator. “The main reason was that they have been incredibly successful in rolling out their platform and entering new markets with little investment and a small team. They are very nimble and were focusing on the biggest priorities and having success in those markets.”
He says how it has localised its platform in each market, including covering language and currency concerns, made Ticketbis both an attractive purchase but also a model to be replicated. “This is going to allow us to take a very successful business that we have built – particularly in the US, Canada and the UK – and take it truly global and offer consumers the opportunity to enjoy unique experiences anywhere around the world.”
The other major development from the company is a VR view option, which the company sees as a way to ensure that consumers return as well as a way to help increase their average spend. “One of the things that we do well is that we want to provide more transparency and more information about the transactions so that the consumer has a better understanding of the ticket that they are buying,” he says of the origin of the technology. “That means you can make an informed decision if you want to spend £20, £30 or £50 more on a seat because the view is significantly better. It allows you to have a more informed take on the cost/value equation around the ticket you want to buy. Traditionally when you buy from the primary market, you choose a section – but in that section you can have hundreds of seats.”
He sees this as providing an important consumer-facing function that the primary market has (so far) missed or ignored. “Through years of experience and from selling thousands of tickets to the same stadiums and events and places, we know the relative value a consumer places on a particular seat,” he argues. “Not all the hundreds of seats in a section are worth the same to a consumer. We put that into the technology.”
It launched with a number of baseball stadiums in the US in March and is now rolling out in major venues such as The O2 in London and the Manchester Arena. “We look at the volume of transactions we do by stadium and we are expanding aggressively, adding more and more of the biggest arenas and stadiums,” he says.
Acquisitions, pioneering technology and meeting what they see as consumer demands may be the driving forces behind StubHub at the moment, but it is not going to overturn the negative terms in which many in the live business – from artists and managers to agents and promoters – hold the company. For now, StubHub is not concerned. It has spotted a market opportunity and is seizing it with both hands, dramatically raising the bar with its purchase of Ticketbis.
“We are going truly global,” says Martín de Nicolás.
Secondary ticketing naysayers – consider yourselves warned.
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