How Ticketmaster Has Fought Resale Marketplaces by Disrupting Itself


If you can’t beat ’em, join ’em. That’s the lesson Ticketmaster learned from its own journey through digital disruption, according to Jared Smith, president of Ticketmaster North America. At the Forrester eBusiness Forum November 6, Smith discussed how Ticketmaster has responded to the threat of the ticket resale market by launching its own online marketplace — a gutsy move that has increased sales and improved customer service for the ticket retailer.

Smith said that Ticketmaster is in an unusual position: “we are blessed to be in a business where people stalk our product.” Bruno Mars fans want to know where Bruno Mars will appear and how much it costs to see him even if they don’t end up going to one of his concerts, and they actively use digital to follow his appearances. Ticketmaster customers are passionate. They are driven. They are also frustrated when they can’t get access to their product — and they’ll willingly go to your competitor if you can’t give them that access via an affordable ticket.


As Smith noted, 90 percent of Ticketmaster’s business comes from online and mobile sales — and in the digital world, it’s far too easy for fans to go elsewhere if you don’t give them what they want, a reality that spurred Ticketmaster to change the way it does business. In the 2000s, ticket resellers like StubHub emerged to threaten Ticketmaster by taking advantage of the ease with which consumers can comparison-shop online. These resale marketplaces became a thorn in Ticketmaster’s side because they appeared to fans to “service them better by creating the perception of more available inventory,” or the best unsold seats at competitive prices.


“We had to do something about that threat,” Smith said. In response, Ticketmaster first took a hard took at its challenges:

  • Inventory was not priced at the intersection of supply and demand.
  • The industry did not control its own distribution channels well, creating its own competition.
  • Fans were becoming more savvy about comparison-shopping across multiple channels such as StubHub and Craigslist.

Of all its challenges, the proliferation of comparison shopping sites was by far the most serious. Smith noted that the average fan typically visits four sites before buying a ticket.

“It’s easy to pull up a browser and find the best place to spend your $100 on the best seat,” he said. “When this happens, if someone does not find what you want on Ticketmaster, you can go someplace else. And the next time you purchase, you might just bypass Ticketmaster.”

And as other resale marketplaces continued to grow, Ticketmaster realized that too many customers were not finding what they wanted on Ticketmaster. In fact, 35 percent of fans were not finding available seats for events on the Ticketmaster website.

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“Imagine J. Crew telling you that a third of its stores don’t have the clothing you are looking for?” he noted. “Failing to serve 35 percent of your customers is death for a business.”

Ticketmaster’s solution: “We made a conscious choice to bite our own ankles” by launching its own marketplace to capture the secondary ticket market. By creating a secondary ticket-selling marketplace (which does not yet have an official name although its beta name has been circulating publicly), Ticketmaster was, in effect, competing with itself. But Ticketmaster was banking on the likelihood that an increase in sales from the ticket resale market would more than offset any cannibalization of primary ticket sales.

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This “all-in-one spot” for fans to find and sell tickets. In the words of Rolling Stone, Ticketmaster’s new resale product “makes it easier than ever for artists’ fans to scalp their own tickets online.” Fans can make deals with each other to sell tickets. Ticketmaster, acting as the trusted intermediary, collects fees from each sale. (Here’s more insight into how it works.) According to Smith, this new resale product has already been paying off since its beta launch this summer.

“Adoption by client base has been great,” he said. “We are selling 62 percent more primary tickets. Fans are buying 10 percent more in incremental ticket sales. We’re not worried about cannibalizing ticket sales because the overall pie is getting bigger.” And organizations like the National Hockey League are getting onboard with the service.


What’s the secret behind the early success? Understanding your customer. According to Smith, Ticketmaster addressed the need it uncovered via its own research.

“We understood that fans really don’t want to comparison shop,” he said, noting that 93 percent of Ticketmaster’s customers told the company they want to buy all their tickets in one place. “Fans told us they prefer a single place to find all the safe, secure options for buying the best price for an event,” he said.

And, importantly, Ticketmaster addresses fans’ concerns about fraud.

“Eighty five percent of our customers told us they are concerned about fraud on reseller sites,” he said. “So we are verifying every transaction and guarantee you will get the ticket you bought. No one else can do that.”

Finally, Ticketmaster offers free ticket delivery methods with every transaction.

“One hundred percent of our customers want to pay less on fees and delivery,” he quipped, acknowledging a common complaint about fans needing to pay fees through services such as Ticketmaster.

“If you service your fans well, you will win,” he said.


“We made a conscious choice to bite our own ankles” — Jared Smith, president, Ticketmaster North America

As important as this beta product innovation has proved to be, Ticketmaster is not resting on its laurels. Smith told me after his presentation that the company is embracing social media and mobile in a number of ways. For instance, as you might have noted if you use Ticketmaster, when you buy a ticket from the company’s website, Ticketmaster makes it possible for you to share your purchase on Facebook or Twitter (“I’m going to see P!NK at the Allstate Arena November 20!”). Smith indicated that each such shout-out on Facebook generates an average of $5 in incremental ticket revenue, and as much as $8 on Twitter.

“You can’t sit still in a digital environment,” he said, noting that Ticketmaster expects sales on mobile devices to triple in 2014. And, as Ticketmaster demonstrates, you need to listen to your customers in any environment.


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