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A Whole New Ballgame: Sports Ticketing in the Connected Age

Written on
May 24, 2013 
Author
Jesse Lawrence  |

ADOTAS — In the next five years the ticket market will likely look nothing like the scenarios you’ve grown up with, which, depending on your age, either involved waiting on line outside for ticket offices to open, or hitting “refresh” until tickets went on sale online.   As often happens, a startup will be vying to disrupt the market, but this time the startup doing the disrupting won’t be run by 20-something Silicon Alley wunderkinds, or even Silicon Valley vets.  In this next market turn, the startups will be professional sports teams looking to recapture the billions of dollars in market value that has slipped through their hands over the past 20 years.

In this fight, teams are embracing data: big, small and everything in between, and in ways that were unimaginable 10 years ago. In your dad’s ticket market, Ticketing Vice Presidents relied on radio, print, TV, and their gut instincts to price tickets and attract buyers.  Today, the smartest of those VPs think like traders, and organizations understand the power of a pixel.  There is a shared belief that convergence of these two skill sets inside of team front offices may have as big an impact on the market as StubHub did 20 years ago.  And if those VPs are right, the ticket market of the future may in fact look a lot more like the ticket market of the past, one in which teams, and the old-fashioned box office, were the only games in town.

But first some history: The Internet had a profound impact on the ticket market unlike many other industries.  Previously an inefficient and local market, online sales pushed ticketing into the light and brought margin-trimming efficiency, virtually (pun intended) overnight. In what was already a cut-throat market, those that didn’t understand how to use the Web disappeared, and new, tech-savvy players emerged. The main driver of this new-found efficiency was a company originally called LiquidSeats and now known as StubHub. The liquidity and access that it introduced caught many sellers, including sports teams, flatfooted.

In 2003, as the secondary ticket market continued to grow, eBay — the original ticket marketplace — purchased StubHub for $300 million. Since then, the company has grown to more than $1 billion in annual sales.  Along the way, team operators have done a lot of hand-wringing, but have done very little to fight back.  This season is different, though, with a handful of professional sports teams launching their own ticket exchanges to compete with StubHub directly.  The Yankees were the first to take the leap and create their own ticket exchange, and the Los Angeles Angels quickly followed suit. It’s inevitable that other teams will follow a similar path in the months and years ahead.

Captive exchanges, however, are just the latest effort by teams to take back the ticket market.  In the last five years, more than half of Major League Baseball teams have started to use dynamic pricing to adjust prices in real-time, and almost all are using data-driven marketing techniques like re-targeting.  In 2013, CRM (Customer Relationship Management) has become as important an acronym to marketing organizations as ERA is to  managers and pitching coaches. The multiple data touch points — both inside and outside the stadium — available to teams represent a market-disrupting opportunity to rethink the ticket purchase as just the first of many products and services that the team can offer their fans once they’ve signaled an intent to attend a game. These offerings range from the standards like concession deals, to higher tech options like stored value tickets, and even experiential reward programs.  All of these give fans access to experiences and deals that they’re likely to remember the next time they’re in-market for tickets. When they are, chances are that teams will know, and they’ll have a deal waiting.





Jesse Lawrence, CEO/Founder of TiqIQ, is formerly a venture capitalist and worked at the Programming Group for IAC, helping to start or acquire businesses like College Humor, Vimeo, and The Daily Beast.

In addition to overseeing TiqIQ’s business operations out of its HQ office in NYC, Jesse is a contributing blogger at Business Insider, Forbes, Huffington Post and more.

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