Ticket Sales Business Models – The Retailer, The Marketplace, The “Enabler” Platform

Event ticket sales is no joke. The market makes up for 70% of sports revenue and up to 60% of music and film revenue. Events, big or small, bring people together. We are social beings and we really like to get close to each other and enjoy life together. Throughout the ages people have gathered around gladiators and actors, in ancient Rome. They cheered for their favorite knights during the Middle Ages and now – everything’s available. Even Justin Bieber.

As the world grew smaller, we now can quickly join a local tweet meet or buy tickets to Madonna’s concert or the Superbowl. With so many events and so little time a few companies evolved into (sometimes) friendly electronic helpers. Tickets are bought online and three models have evolved to cater to our needs.

Throughout this entertaining and information packed ebook you’ll find out which are these three proven and dominant business models. You’ll get an idea of how big the market is, who are the main players and how did they make it to the spotlight. You’ll also get a graphical understanding of business models, information related to revenue and funding. Let’s first have a look at the market.

The Market

ticketsalesTicket sales provide the financial backbone to any company in the event organizing and management business. In 2013 the top 100 movies grossed approximately $10 billion, Madonna’s 2012 MDNA tour alone grossed $305 million and another $75 million in merchandise sales, making her the highest paid musician. The NFL brings in an annual revenue of $9.5 billion (second in line is baseball, with “just” $7 billion in 2012).

Ticket sales generate roughly 60 to 70% of any given sports revenue, and 40 to 60 % for the music and film industry. The rest is split between sponsorships, endorsements and merchandise, but these too are dependent on ticket sales figures, a clear indicator of popularity and reach.

Ticket sales have been transformed, like any other industry, by the internet and several business models appeared during the dot.com boom. Only three survived and thrived. Let’s have a look at these models and the companies that used them to dominate the ticket sales market, starting with number 1: the ticket retailer.

The ticket retailer

Much like a conventional goods retailer, the ticket retailer is the middleman between event organizers and event attendees. Ticket retailers buy bulk and sale “en detail”. The industry sports an wide variety of competitors: there’s Ticketmaster and …. errr … well that’s pretty much it, as Ticketmaster is the biggest company on the market and virtually a monopoly.

There are of course smaller companies but the big venues are sold through Ticketmaster or Ticketmaster satellite companies such as GetMeIn or TicketsNow. If you do intend to take on Ticketmaster, as the new ticket retailer on the market, here’s what you need to consider:

Simple ticket sales retailer business flow
Simple ticket sales retailer business flow

The components of a ticket retail business

The main things you need to consider are:

  1. ticket partners / suppliers: think supply. Although Ticketmaster has it all covered up as the parent company, Live Nation Entertainment, “owns” roughly 200 artists (such as Jay-Z, Madonna, U2), you’ll need your tickets. Start thinking about brushing shoulders with concert organizers, sports managers and such. These people will be those supplying you with the product: tickets.
  2. a ticket shop: once you get a hold on those tickets, you’ll need to sell them. Much like a ticket – like Amazon, you need a shop where people can register and buy tickets
  3. ticket outlets: if you’re really going to go against the big boys, think about this – Ticketmaster has a wide network of ticket outlets that lets it quickly distribute tickets offline, as well as online
  4. fulfillment centers: just like other products, tickets need to be packaged and sent to customers. Each of these fulfillment centers needs to be equipped with printing machines that handle needed security.
  5. the market: people will only buy from you if they know you exist and as such you’ll need to think about investing in marketing and advertising.

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