Let's face it, buying tickets for more or less any sports or entertainment event in this country sucks. The ticket sellers pile on a range of huge fees for no obvious reasons. Ticker brokers scarf up the best seats to many events, and then sell them in the secondary market way above face value, largely to the people on the Forbes Billionaires list. Meanwhile, according to Ticketmaster, 40% of event tickets last year were never sold. We've got a system where the best seats are under-priced, the worse seats are over-priced, and more or less everyone ends up feeling ripped off.
No one is more acutely aware of the issues in the ticketing business than Nathan Hubbard, the CEO of Ticketmaster, which last year merged with LiveNation (LYV) to create the most powerful force in the live events business. In an interview with Forbes in San Francisco this week, Hubbard noted that for the the first time in history, overall ticket sales to live events in 2010 will be down double digits from the previous year. That includes sports, theaters and concerts. The obvious questions: Why? Being entertained isn't exactly a fad. And what can the players in the live events business do to turn the trend around?
Hubbard says the company is doing a number of things to address the situation. For one thing, he says Ticketmaster is taking steps to make the ticket buying process more consumer friendly - and (inevitably) more tied into social media. For instance, the company has introduced interactive seat maps for many of the venues it serves, giving the consumer more options for choosing event seats than simply clicking on the "best available seats" button. Hubbard says the interactive seat maps have increased conversion rates - the percentage of people who look at seats and actually buy them - by 25%-30%.
The company also has enabled "deep Facebook integration," allowing you to tell your friends when you've purchased tickets to an event. Since Ticketmaster enabled the service in November, he says, they are generating an extra $5 in ticket sales for every "I'm going" message generated from the site and posted on Facebook. He notes that 60% of event goers say they want go to more things if they simply knew they were taking place, and the Facebook move helps address that issue.
In another move, Ticketmaster has been including more content about the musical acts they serve; check out the page for Prince tickets, and you can see fan reviews and watch the Purple One hold a press conference. Hubbard notes that the fan reviews, in particular, help sell tickets; he says pages with reviews "convert" at 2x the rate at pages without reviews.
As for fees, Hubbard concedes that they are source of major consumer consternation. Ticket buyers, he says get frustrated when their $27 concert ticket actually costs them $42 including fees. One step the company has taken is to show fees upfront, and not wait until the buyer hits the checkout page. Hubbard notes that even that move created "an uproar," with "push back from artists, promoters and venues," all of whom wanted consumers to focus on the price before the fees, and not the full amount they're paying. So why not simply roll all the fees into a single price, and not charge the extra fees at all? "For political reasons, and artistic branding reasons, the industry isn't ready for it yet," he says, but he thinks the industry will ultimately get there.
Meanwhile, Hubbard notes that the ticket market as currently structured simply isn't efficient. "We're not pricing at the intersection of supply and demand," he says, noting that you have scalping of tickets for the good seats, and unsold seats up in the nosebleed section. "The high priced tickets are usually not priced high enough, and the low priced seats aren't usually low enough," he says.
Hubbard says the company is partnering with a company that is "the world expert in demand forecasting" to bring some new tools to the market. (He plans to announce details of the arrangement sometime this sprint.) This summer, the company is going to start taking a more sophisticated approach to ticketing for many music events. They'll offer seats at many more price points - say, 8 to 12 - rather than the usual 3. He says 50% of amphitheater shows will use the system this summer. When combined with interactive seat maps, it should give consumers much better information on their seating options. That's the first step toward truly dynamic pricing, with prices changing on the fly depending on demand.
Another idea Hubbard has - which he concedes the industry isn't ready for just yet - would be to merge the primary and secondary markets into a single consumer experience. If you're searching for Katy Perry tickets, say, there's no reason you should have to do separate searches from both the primary seller - Ticketmaster - and the second dealers - eBay's StubHub unit, or LiveNation's own TicketsNow, for instance - to find the seats you want.
The secondary market players, he says, would support displaying their wares in the same place the buyers are; but he says they are less keen on dynamic pricing, and even less supportive of the concept of paperless ticketing, an approach that simply prevents any ticket resale. (Much like an airline ticket, say.)
Taken together, the moves Hubbard is talking about should both boost ticket sales and improve the buying experience for consumers; what's unclear is whether the reduced ticket volume really do reflect the friction in the system - or if consumers are simply spending more time watching their flat panel TVs and surfing the Web
