Is it Ticketing Going Viral or are Ticket Company Startups Going Viral?
1 November, 2010 at 10:10 am Tim Roberts ARTS Australia 2 comments
Another day, another article about a new ticketing option. This is great for innovation, but is it sustainable?
One such new entrant is Amiando with the aim “to harness the cost benefits and reach of the internet, as well as social media networks such as Facebook and Twitter, to offer event organisers on demand invitation management, promotion and attendee registration, as well as integrated billing.“
Ticket sales attract a charge of $0.99 (£0.79) per attendee plus 5.9% of the attendance fee. So on a US$30 ticket that is US$0.99 plus US$1.77 = US$2.76 or 9.2% on a $10 ticket it grows to 15.8% of ticket price. While it compares well for higher priced tickets, it is a pricey option for lower priced tickets like children’s events etc.
However, price may not be the issue … for long. The article then discusses other numerous similar online options like: Etouches, TicketBiscuit and Fatsoma. These are just a few of the options in this rapidly growing area and the common trend in a market as more entrants are attacted is the shift to price competition, with the eventual result of commodity pricing when there is little differentiation left amongst competitors as they compete for market share. It is early days but the accelerated product lifecycle of such Internet offerings makes one wonder how long till these companies are cannibalising each other’s market share? Afterall, a SaaS solution based in the UK available on the Internet can compete just as easily as a service in Australia or Singapore. The barriers of payment gateways and the like are less and less of an issue, particularly with global solutions like PayPal.
The article then discusses the dominant agency model and opportunity that these new players may present.
Neil Saunders, senior analyst with Verdict Research suggests that in comparison to the newer leaner distribution options, ”companies like Ticketmaster don’t really add a significant amount of value.“
However, this ignores one important issue, whether traditional ‘middlemen’ add value or not, when it comes to venues – the agencies like Ticketmaster have venue exclusive ticketing contracts that preclude competition.
Until venue exclusive ticketing contracts or similar handicaps to competition are discouraged, agencies like Ticketmaster will preclude these numerous new ticketing options from moving beyond small venues and events.
With the recent launch of Foxtix in Australia, going head to head with both the current dominant agencies: Ticketmaster and Ticketek, one has to wonder how much money Rupert Murdoch is prepared to throw into the bidding war to assert control with exclusive ticketing contracts. I suspect the result will be a leap in the quantum of ‘key money’, and unfortunately reducing the options for a change in these contracts that maintain the current duopoly. But is there room for three agencies in Australia? Time will tell.
Entry filed under: audience development, CRM, Mobile Web, SaaS, Social Media, Web 2.0. Tags: audience development, competition, Mobile Web, Online, Social Media, Venue Exclusive Contracts, Web 2.0.
1.
Scott Handsaker | 1 November, 2010 at 10:45 am
As a co-founder of “yet another ticketing company” in Eventarc, I thought I might chime in here…
Firstly, neither tickets nor ticketing companies are going viral. Ticketing companies like Eventarc, Amiando and Eventbrite do however all have a viral component to their distribution strategy.
i.e. Their brand is part of every ticket, every email and every registration page.
This is no different to what Ticketek or Ticketmaster have done for years, but the Internet has allowed the pace of distribution to accelerate.
Secondly, this viral distribution works better for Eventarc and similar companies than it does for the big players because our customers are the long tail of ticketing. Our price points are lower and we offer freemium plans to allow interested parties to try us out.
My customers make decisions on whether to use us based upon what their friend uses, and they will make that decision within a few minutes of using my product. A ticketek customer is more likely to run a 3 month tender process, so the enterprise sales force is much more important in that market.
Either way, I disagree that Amiando is currently a genuine competitor to Ticketek/Ticketmaster. They focus more on the conference and festival market (with some cross over to Ticketek there), but also in the small, self service events where they compete with Eventarc and Eventbrite.
In terms of SAAS based ticketing vendors becoming a commodity, we are a loooooong way from that happening yet. There is still enormous amounts of innovation to come, as selling tickets is far more complex than putting up a web page, accepting credit cards and pumping out an e-ticket.
Keep an eye on Eventarc in 2011 to see some of that innovation I am talking about!
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Tim Roberts | 5 November, 2010 at 7:38 pm
I would suggest that we are seeing an exponential growth in the number of new ticketing startups, hence my comparison to ‘viral’. Another less flattering collective noun would be an Algae Bloom of ticketing startups
Not sure about “Their brand is part of every ticket, …”. Ticket companies are but ‘agents’, agents for the principal – the owner of the event. The brand of Cold Play is much stronger (and much more relevant) than the agent you were forced to use to pay to get your entry to the event. The primary purpose is to attend the event, there is no demand for a ticket per se. The primary demand is event attendance, the ticket is just a derived demand and just a means to an end.
Your perception that “we are a loooooong way” from SaaS ticketing vendors becoming a commodity is curious as it is only a matter of time and we are all continually surprised by the rate of technological innovation. Innovation is to be encouraged and applauded from it comes differentiation and service improvement. It is important not to be complacent regarding the rate of market maturity, many a technological innovation has accelerated the demise of market defined too tightly and unable to to meet new entrant offerings. e.g. Levitt’s example of kerosene with the advent of the innovation of electric light or the railway for passenger travel with the advent of the Model T Ford.
Just a thought …