When the Department of Justice’s Christine Varney gave her blessing to the Ticketmaster/Live Nation merger in 2010, many of the big players in the space warned that the combined companies would squash competition and hand Ticketmaster a monopoly that would ensure their hegemony in the ticketing space.
They were half right. Paciolan would become Spectra and peg its future on an integration with StubHub, while Tickets.com would lose many of its non-baseball clients and focus on MLB. But new players would emerge to challenge Ticketmaster, including the AEG-backed AXS, as well as middle market players like Ticketfly, Eventbrite and TicketForce, all carving out new segments of the market.
I call it agile competition — a shift away from legacy ticketing platforms to start-up minded competitors that can quickly evolve and adapt to meet the demands of the rapidly changing consumer landscape. The ability to anticipate the needs of fans is more important than ever and ticketing companies are spending millions to develop the technology of the future they believe their fans will want.
Even Varney has reinvented herself. The DOJ’s former Assistant Attorney General for the Antitrust Division is now a private attorney and in 2014, was hired by Songkick to represent the company in its never-ending legal fight with Ticketmaster.
That’s the ticketing world for you — revolving doors, changing alliances and constant shifts and disruptions. Below, we outline the four most important news stories that will shape the ticketing landscape in 2017.
Consolidation Squeezes Brokers and Pushes Many Out of Business
The days of the brick and mortar retail broker are numbered. The crash of the Super Bowl ticket market in 2015, coupled with this year’s self-implosion of ScoreBig have led to back-to-back years of write-offs for some of the country’s most well-known ticket brokers. Couple that with shrinking margins from higher priced tickets and competition from big consolidation firms like DTI and Dynasty, leading to an adapt-or-die panic from some of ticketing’s biggest resellers.
“Five years ago, ten years ago, the mom-and-pop brokers had relationships with customers, yes. They were very valuable because they could service that person and then they could build a relationship with their local venue or team,” explained Patrick Ryan from Eventellect.
That has slowly changed as StubHub has become a trusted and well-known place to buy tickets and led to an erosion of the fan-to-broker relationship.
“Now that everything’s so transparent on the market, the customer gets a quote from their local broker and they’re like, ‘Look, dude. I can save twenty percent buying it on StubHub, so our relationship is no longer uniquely valuable to me,'” said Ryan.
Couple that with increased competition for consolidators like DTI, which just raised $75 million CVC Growth Fund and New Amsterdam Growth Capital, and brokers are facing competitors that are far better funded with much deeper team relationships.
Ryan said he believes that brokers who survive the upheaval in ticketing will shift from retail outfits to ticketing day traders, who buy and sell tickets but never interface with consumers.
“I think that those brick-and-mortar type of guys are going to have a harder time but I think that there’s a generation of traders who look at a market and can spot opportunities,” he said.
“They don’t have a relationship with anyone. They’re just looking at the market and they’re using data and analytics to say, ‘Hey, this market’s under-priced. I’m going to buy some off StubHub, I’m going to buy some off Ticketmaster,'” Ryan said. “It’s not about how much they pay for a ticket or face value, it’s about finding tickets with value that increases. Those guys who have that intel and gambler’s mentality will always exist and they can do really well.”
Fan Clubs Get More Interactive
Artists will continue to get creative with their presale packaging and start to offer up interactive experiences to fans willing to pay a premium.
“I think we’ve seen artists now getting more comfortable doing VIP scenarios and I feel like fans are going to want something that’s more interactive,”explained Cody DeLong with Sound Rink. “Because there are a lot of artists doing presales, artists will want their package to stick out and entice the fan to spend $60 on a VIP package. Maybe there’s another band that’s playing two days later that has just the standard meet and greet and the fan will think to themselves ‘Okay. I would like to meet both bands but I only have money for one. This band is offering me all this cool stuff while this band’s just giving me a poster and a laminate.'”
Recently, Sound Rink launched the Bands Vs Food tour “where we brought in catering from local food establishments in each city and the fans got to meet the band, have some local food, and mingle,” DeLong explained. “The Memphis May Fire and We Came As Romans guys hung out, ate with fans, and were in a very relaxed environment. We also did a series of video posts from each stop that were posted to the artist’s social accounts. This included a tour of each restaurant and footage from the meet and greets.”
Who Cleans up the ScoreBig Mess?
ScoreBig is currently being controlled by its senior creditors after a liquidity crisis forced it to halt operations.
The National Association of Ticket Brokers Director Gary Adler sent out an email to ticket brokers last week saying that many teams have stepped in to help clean up the mess caused by potentially thousands of tickets.
“As we continue to take stock of the ScoreBig situation, some of you have shared examples of how you are working to keep teams and venues that you work with apprised of the situation,” Adler wrote, later adding, “it has been reported to NATB by some Members that some teams and venues have welcomed this information and appreciate what NATB Members are doing for fans.”
“I am (also) aware of the flipside to this, where instead of coming to the aid of fans, some teams have used the buyer/seller ticket sales information provided by ScoreBig to instead threaten professional resellers,” Adler said. “That is a very unfortunate, and frankly unproductive action by teams that harms their fans, and it’s an issue that we will deal with separately.”
As for ScoreBig, the company is being shopped by Sherwood Partners but is running out of possible buyers. Don Vaccaro’s firm TicketNetwork is believed to be one of the last viable buyers after Curtis Cheng with DTI said his company was out.
“It’s likely going to to end up as Chapter 7 or Chapter 11” bankruptcy filing, Cheng told Amplify. “The venture debt people are in control of ScoreBig. Nobody knows what they’re going to do.”
As for the millions in unsold inventory still owed to DTI, Cheng said “we’ve written it off as a loss. We don’t plan to try to acquire any of their assets. We plan on just moving on and that was just a little blip in the radar.”
SongKick Tests the Limits of Discovery in Ticketmaster case
SongKick is trying to throw a hail mary to save its sinking anti-trust lawsuit against Ticketmaster. After demanding tens of thousands of pages of documents in a wide-reaching discovery case, Songkick is hoping to finally see a return with a request for a full forensic search on the computers of Michael Rapino, Jared Smith and twenty-one employees, many who haven’t worked at the company in years. That includes former VP Greg Schmale who left in 2014, Nathan Hubbard who left in 2013 and Fred Rosen who left Ticketmaster in 1998.
Ticketmaster lawyers pushed back on the request and said some of the emails SongKick had requested had been erased. SongKick quickly reacted by accusing Ticketmaster of destroying evidence.
As part of its request, Songkick wants a rundown of the fees Live Nation and Ticketmaster charged on presale tickets sold by performers, along within a roster of performers for whom the companies have sold presale tickets.
In May, U.S. District Judge Dale Fischer dismissed a claim seeking to have the merger unwound on the grounds that the suit came outside the four-year statute of limitations for such a claim. She also denied Songkick’s request for a preliminary injunction to block Live Nation and Ticketmaster from slapping service fees onto artist presale tickets.