Industry veteran Tim Chambers argues that sector consolidation, geopolitics and the threat of technical recession are among the ticketing sector's major concerns for 2024...
A year ago, I suggested in a TheTicketingBusiness op-ed that ticketing was a ‘Bad-News’ business, that whilst ‘Tickets’ have never been more expensive, ‘Ticketing’ has never been valued less, writes Tim Chambers.
That ticketing is generally viewed as a PAAS (Platform-As-A-Service), oft-frustratingly providing access to the consumption of events and experiences rather than offering anything incrementally creative i.e. it doesn’t actually make anything but is merely the means-to-an-end.
This deliberately contrarian opinion appeared to resonate with others in the industry attracting a number of readers and considerable feedback. Including a recent follow-up, which asked, 12 months on what has ticketing achieved to change that negative/realist perspective?
#Ticketing past, present, and yet to occur
Whilst acknowledging the excitable post-pandemic headlines of record-setting revenues for blockbuster tours by individual artists, accompanied by the boastful claims of those promoters (dynamically) monetising bundles, packages and merchandise within the global network of venues and festivals, (collectively the ‘supermarché du spectacle’, with apologies to Guy Debord), or the ticketing sector (where many operators have had to manage with fewer staff and key personnel who left during the layoffs and corporate downsizing experienced during COVID-19), who have been at times frantically busy processing and distributing evermore expensive access to IRL (InRealLife) and/or immersive events and experiences.
But other than operationally having to do more-with-less, whilst still being underappreciated by demanding and routinely ungrateful clients and generally the focus of dislike and/or distrust by consumers, what has the ticketing industry specifically developed or delivered in 2023? Being flip, what has ticketing done for you lately?
It could be argued, that historically, ticketing has experienced a series of evolutionary changes triggered by tectonic shifts of emerging technologies or socio-political factors developed elsehere, rather than any revolutionary new way of specifically retailing, marketing and distributing ticket inventory on behalf of its clients (the event Rights Owner whether Artist, Attraction, Sports Franchise, Promoter/Producer, Venue, Media Partner or Sponsor) to the end-consumer, whether the casual purchaser or fan, patron, subscriber, or supporter.
Growth within the ticketing industry in terms of the volume of admissions processed at concerts, events, exhibtions, festivals, games, matches, or visits to attractions, cinemas, museums and theme parks has historically occurred following the adoption and integration of externally-developed bolt-on technologies to the core ticketing algorithms of General Admission, Seat-Row-Block or Timed-Admission programming.
Indeed the ability of the ticketing industry to adopt and then integrate third party technical and service initiatives has led to a series of postive disruptions of the ecosystem. And this technical recuperation has enabled radically new processes and business practises to become commodifed within mainstream ticketing.
As recently as the 1980s, ticketing was largely manual with box-office managed manifests and hard tickets, printed venue maps and souvenir ticket stock, or agency vouchers to be exchanged at point-of-entry. Predominately walk-up sales (in cash as that didn’t attract additional credit card fees), with some independent specialist retail outlets, concierge providers, or entrepenurial coach operators who bundled event tickets with transport for audiences outside the major cities.
The ‘disruption’ to ticketing came with the adoption and integration of externally developed technologies. These ‘disruptive innovations’ (© Clayton Christensen) include:
- Mainframe Computing – used primarily by larger-scale clients (typically venues and retail agencies) where the operating platform enabled the electronic management of box office manifests, albeit with rudimentary visuals. Reliability of hardware (typically sufficient ventilation to avoid cabinet overheating and/or power supply failure being the main issues), with backward-capability of the biannual software upgrades essential.
- Telephony – enabled a client-specific 24/7 tele-sales and/or customer service facility, and the aggregation of this functionality further drove externalised retail ticket agency growth.
- Online – initial adoption of internet-based ticketing was constrained by dial-up capabilities and rudimentary ‘browser-based’ solutions, but the advent of broadband networks enabled a huge growth of cloud-based, white-label, ticketing solutions displacing the mainframe software installations of old, with the convenience of inventory offered to the consumer embraced as familiarisation of internet-shopping grew.
- (An unintended disruptive consequence of the internet on ticketing includes the geometric development of secondary marketplaces with the listing and retail of inventory not necessarily authorised by event Rights Owners.)
- Mobile – initially with monochrome facsimiles of ticketing web pages, but eventually blossoming via mobile-first social networks, and event discovery apps all made feasible by the rollout of 2G (enabling SMS), 3G (providing access to the internet), 4G (incorporating video streaming, interactive maps, m-commerce etc.) with 5G promising to outstrip fixed line broadband.
- Digitalisation – includes (supposidely) transformative technologies such as Blockchain’s impact on ticketing which increasingly appears to have a concave-down inflection point, and whilst NFTs may have some traction as digital collectibles within the sports / fan club communities, they have yet to reorrientate the core ticketing business model or operations. However, linking the digital ticket to personal ID, wallets, health certficates and access control systems etc. is now entirely possible, and Web3.0 digitisation is the current frontier of ticketing technologies.
Other less welcome disruptive impacts to the development of ticketing include macro-cultural factors such as:
- 2007-2008 financial crisis – the most severe global economic crisis since the Great Depression (1929-1933) which led to an extended period of low/negative growth, with governmental adoption of fiscal austerity and thus increased unemployment which substantially reduced levels of consumer disposable income.
- COVID-19 – which effectively shutdown the global events ecosystem (for 18-24-30 months dependent upon local regulatory restrictions) albeit with the temporary adoption of virtual and/or hybrid, immersive experiences, but more notably accelerated the development of the widescale digitisation of ticketing.
As previously discussed, ticketing is resolutely a bad-news business with a daily media feed of alarmingly negative headlines from artists, other event Rights Owners and audiences all frustrated by systems seemingly always falling-over (albeit a falsehood as ticketing system uptime is routinely in excess of 99.99%), or the need for queues from excessive demand, or for anti-bot software to authorise human-only purchase, or the ageless debate over the price of tickets, associated service fees, and unauthorised resale.
The pain of ticketing FOMO typically leads to one-sided debates by politicans, non-ticketing ‘experts’ and cultural commentators, or nascent technologists eager to ‘democratise’ the currently ‘unfair’ ticketing status quo which can apparently be resolved by the marketwide adoption of their new widget, functionality or feature-set. (No naked commercial self-interest there.)
Aside from these emotive debates, within the industry there is also some concern regarding the polarisation between ticketing ‘hits’ and those that aren’t. That the top 5 percent of international touring artists and attractions appearing at state-of-the-art arenas and flagship cultural spaces are able to dynamically extract evermore revenues, whilst the middle market of entertainment venues and their events are being sqeezed of consumer discretionary-spend, and the thin margins of many smaller-scale and local theatres, grassroots music venues and nightclubs are being devastated by the inflationary pressures of rising energy costs, increased event logistics, production and talent costs, and the ongoing cost-of-living crisis.
This apparent trend in live entertainment of ‘go big or stay home’ (© Will Page) has become a key business concern for the wellbeing of the industry, with a growing debate for both sector participants as well as observing regulatory authorities. Not least because coupled with this apparent shift towards larger-scale events and venues, there has also been a considerable level of sector consolidation within live entertainment. This has led to some concern regarding the level of competition and market share exercised by a reduced number of venue and festival owner-operators, as well as their relationship with ‘in-house’ and/or affiliated ticketing service provider.
The post-pandemic relaunch of live entertainment has therefore been unequal, and the immediate rush of event attendance (in part reflective of the backlog of postponed concerts, tours, and residencies) is already coming to an end for many in the previously mass-attended mid-markets.
For over a decade (2008-2021) interest rates were close to zero, and this era of ‘free money’ led to the silicon-valley business mindset of letting start-ups run at a loss for years, or ‘blitzscaling’ (the ultra-rapid building out a company to serve a global market, with the goal of achieving first-mover advantage at scale, whilst intimidating any competitors) and the widespread use of M&A to accelerate growth – ‘If at first you don’t succeed, merge’.
For the owners of ticketing service platforms, ‘organic’, or contract-by-contract growth with ever higher levels of client incentives (fiscal and/or operational) and evolving consumer-facing technological and service requirements doesn’t necessarily excite, let alone provide a meaningful ROI.
Whereas acquisitions are viewed as a powerful tool for enhanced growth, as they appear to offer companies speedier opportunities to expand their reach, diversify their offerings, and strengthen their market position. Additionally, a typical presumption of M&A is that the added scale will inevitably lead to cost-savings and synergies, with the operational migration of clients to a preferred unified ticketing solution – albeit on some timescale only understood by the Product & Technology teams, and from experience thus sadly eludes most ticketing operators.
In the pre- and post-pandemic periods ticketing service providers have therefore often grown through acquisition or have themselves been vertically integrated within live entertainment conglomerates which combine the various live entertainment Rights Owners: attractions, sports franchises, promoter/producers, venue owner/operators and ticketing.
Recent examples of ticketing growth via M&A include: the extended roll-up by Leap Event Technology, formerly Patron Technology; the acquisition by CTS Eventim of a majority stake in France Billet (initiated in 2019 with a 48% shareholding, and then increased to 65% in 2023); the acquisition in 2020 by TodayTix of London-based Encore to expand their ticketing distribution network; the 2023 acquisition by Accesso Technology of the VGS visitor management platform; the 2023 acquisition by the Piletilevi Group that operates across Latvia, Estonia and Lithuania of a majority stake in Bilete.ro, and the 2023 expansion of CTS Eventim in conjunction with their JV partner Sony Music Latin Iberia of majority stakes in Punto Ticket, Chile and Teleticket, Peru, to name but a few.
And then Vivendi announced a recent (potential) sell-off of the global See Tickets operations which last year sold approximately 39 million tickets across 13 markets. The scale of such an opportunity obviously limits the number of potential acquirers as the reported purchase price is expected to exceed €300m.
Aside from the ongoing trend for sector consolidation, other future-facing concerns will include geopolitics, regional genocides, and their impact on the global economy, especially as the incidence of ‘technical recession’ across several nation states increases.
More ticketing sector-specific issues include:
- the post-pandemic impact of remote working and the continued part-externalisation of freelancers, agencies and zero-hours staff on the skill-set, expertise and effective operations of ticketing service providers and their attempted back-fill with various AI tools
- the increased digitalisation of ticketing by event Rights Owners, incorporating event admissions + security + integration with identity & payment services, despite increased consumer and regulatory concerns over intrusive monitoring of personal identities, location, and purchases, etc.
- the convergence between ticket retailing and non-ticketing technologies e.g. Etsy, Shopify, TikTok etc. and the strategic importance of APIs to expand the range and diversity of ticketing-related products, services and distribution channels
- the increased focus by event Rights Owners, brands, sponsors and advertisers on developing a robust Direct-to-Consumer strategy – potentially part-disrupting the various ticketing aggregators and retail agencies
- and, lastly, the various ongoing anti-trust, market competition regualtory reviews, and ticket price transparency issues
More bad news in 2025?