Talking Tickets 12 November 2021: Why People Don't "Get" the Secondary! Man U's Monetization Schemes! Rebranding the Revolution! And, More!
Number 110
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The Astroworld tragedy last weekend has many causes and highlights a host of issues. I’m not going to cover that in this week’s edition, but I did want to acknowledge that these kinds of mass casualty deaths are painful for all involved and that our thoughts are with the victims and their families.
To the Tickets!
1. The Big Story:
Monetizing Manchester United isn’t a simple task:
Big Ideas:
Don’t do something because “everyone” is doing it.
In the world of Manchester United, I’m cautious about the idea or “reach” and “engagement” because those would be terms that a team that isn’t the most famous in the world would need to think about.
Monetization of your assets isn’t a bad thing.
When I first went to Birmingham, UK in 2017 to do a talk at the Ticketing Professionals Conference, I would have sworn I was going to be a Man U fan.
My buddy, Tom, is a huge fan of United. A lot of the research I did to make my points about audience development, revenue growth, and experience were built around Man U’s success as creating one of the really great, global sports brands.
If it hadn’t been for David Lynam at the pub in London and Simon Mabb at the pub in Birmingham, I might have ended up wearing red tops instead of Lilywhite kits.
Alas, I’ve now managed to work in my love of Tottenham…so let’s move on.
That was a long-winded windup to admitting that I’ve always been pretty impressed by the way that Manchester United has built a global fanbase and managed to make that fanbase turn into support for the club outside of just “likes” and “clicks”.
The revenue for Man U is pretty amazing. In 2018/2019, they generated almost $825M.
The podcast attached to this article is worth the listen, but the area I wanted to hone in on today is the part about the business model of media because it teaches us a few lessons about marketing, branding, and monetization.
First, let’s look at the DTC model.
In general, the DTC models don’t pay off very well for most brands because the cost of customer acquisition is very high and customer retention costs are substantial.
One exception, would be teams that create some unique DTC experiences or products like Man U can and does.
Why does it matter?
Because of their reach.
One reason that the model that Man U is describing throughout the podcast works is due to their tremendous awareness.
This lessens their customer acquisition costs in three ways that matter in this example:
First, increasing customer awareness and long-term brand equity is something that they’ve already invested in over decades.
Second, the kind of short-term activation that is necessary to monetize an OTT service is easier to do because they have a large social media following that gives them a strong base of sales activation.
Third, the combination of these two things lowers the customer acquisition costs by lowering their costs of advertising.
The second point here to pay attention to is measuring the right things.
I’m pretty sure I’ve talked pretty regularly about the idea that you have to measure the right things.
In the piece above, we see a lot of talk about “reach” and “engagement”.
Man U has about 125M social media followers across Facebook, Twitter, and Instagram and a rapidly growing TikTok base.
That’s impressive.
In context, the NFL’s most popular team doesn’t hit 10% of that mark. (The Cowboys. But the Patriots are close.)
Another point of context, Barcelona is ridiculous with over 400M social media followers.
I have now spent too much time on this example, but I want to use it to illustrate an idea that social media followers aren’t necessarily important without the right measures of success.
That’s why you have to make sure that you measure your campaigns the right way.
“Reach”, “engagement”, or “impressions” might not matter or they might mean everything. For a good explanation, listen to my conversation with Giles Edwards a few weeks back where we discuss this at length.
The challenge is to know what is meaningful for your business.
Meaning, strategy before tactics.
Because as you develop a strategy, you’ll set good SMART objectives, if you are working with a good marketing team/strategy team/consultant.
Finally, this final part I really liked because it shows the power of restraint.
A common refrain you hear a lot of places is “we have to do this” or “we have to do that”.
The Man U example of not jumping on TikTok until they thought they could get it right is illustrative of an organization that knows what it is doing and isn’t afraid to say, “no” because it doesn’t fit their plans.
We all need to get better at this because our lives seem set up to push us to do more and more and more. Even if that isn’t the best solution to our challenge.
In recognizing that they can’t reach their goals without the right investments, resources, and people, Man U sets a good example of how to handle new technologies and ideas:
Make sure they fit in your strategy.
Understand what you need to make them work for you.
Only deploy these ideas once you’ve got everything you need in place to be successful.
What does all of this mean to us?
First, get your strategy right.
Monetization, growth, reach, or any other idea you have must fit into your strategy.
Second, measure the right things.
There are no one-size-fits-all solutions in most businesses.
Third, be willing to say “no” if you aren’t going to be able to do something well.
2. The Road to Recovery:
Cricket Australia says ‘nothing is off the table’:
Big Ideas:
Strategy before tactics.
Did BCG come in with their famous growth matrix where you are a star, a cow, or a load of BS?
In thinking through strategy, is your strategy really a strategy?
These stories are interesting to me because they show me a lot of the ways that folks are thinking through their recovery efforts.
I’m always a little skeptical about the introduction of private equity into sports business because we’ve seen a lot of incidents where the business model of private equity is incompatible with long-term business growth.
And, it is often like people don’t recognize that incompatibility at the start.
There are two things I’m paying attention to here:
First, strategy before tactics. In my work on strategy, I’m a fan of a model I use called CFA:
Choice
Focus
Action
I’m a believer in the 5-year outlook to be loosely thought out, but the next year being sacred. So I’m worried that there might be too much emphasis on the 5-year plan at the expense of the next year.
Second, looking at comps in other countries and leagues is irrelevant.
I have a friend that was working with a team about doing some research around pricing and he called me up to ask my opinion on using other venues, teams, and events as comps.
My advice was, “It doesn’t matter. These comparisons aren’t apples to apples.”
In looking at the sales price of a club somewhere else in the world as a basis for your strategy, even more irrelevant.
Why?
The cricket league in India is more established.
The cricket league in India has a different revenue structure.
The cricket league in India has a different kind of brand equity.
As illustrations, think about buying the NFL versus the XFL. The DC Defenders are fun and all, but they have no relation to the Washington Football Team minus being from the DMV.
For revenue, think about the way that the Premier League has revenue streams that the NHL doesn’t have. This puts the conversation in value on different terms. Same thing here.
As for Brand Equity, the Indian Cricket League carries brand equity that is different than any other cricket association anywhere in the world. In a way, it is to large parts of the world cricket in the way that the All Blacks are rugby.
The big idea here as these leagues move to recover from the pandemic is to put strategy before tactics.
Who will you target?
What is our position?
What are our objectives?
BTW, on the BCG growth matrix. I have no issue with it, but I do worry about models that are one-size fits all. You end up getting what you are looking for.
3. How-To/Question of the Week:
“Why don’t people get the importance of the secondary market?”
Big Ideas:
The relationship between the primary and secondary market is different in every country around the world.
Distribution is a key marketing decision for any business.
Control of the customer experience is a big concern as well.
I’d like to thank the broker that provided me with my first question in the new layout of Talking Tickets.
If you have a question, you can reply to this and I’ll work them into future editions of the newsletter and podcast when appropriate.
Today’s question is about why people don’t get the importance of the secondary market in all cases, especially in markets outside of the United States.
This is a good question because I think it highlights how different each market is because certain markets embrace the secondary market more than others. The definition of resale varies in certain markets with resale meaning one thing and for profit resale being a clear distinction in others.
The jumping off point here is that you have to look at the situation in the location you are working in as a jumping off point.
What is the historical relationship with the secondary market?
Like I showed last week with the BOTS, Charles Dickens had quite a market for tickets to his readings.
So, connections here are fluid.
Other considerations include:
Consumer protection laws and standards. Look at STAR and their success in the UK.
Bad actors or issues in the secondary market. I’ve heard wild stories about the secondary market in South America that had nothing to do with bad actors and everything to do with not understanding resale.
Different business models in different countries.
Two points that I would highlight here to really explain the friction between the primary and secondary markets in many places:
Cultural differences
Experiential differences
First, the cultural.
Every part of the world consumes arts, shows, games in a different way.
The same goes for the secondary market. The US has a different relationship with the secondary market than the UK does and China’s resale market is different than everyone else’s.
One of the challenges that everyone has to recognize is that there isn’t a one-size-fits-all approach to selling tickets in any part of the world. Selling tickets in NYC is different than selling tickets in Tacoma, WA. And, selling tickets in Tacoma is different than selling tickets in Barcelona.
The job title is the same, but the nature of the job can be entirely different from the pricing model, the sales process, the on-sale process, and so much more.
So when you think about why someone doesn’t “get” something or agree with something, the first step should be a step back to see what the market or the job looks like through the eyes of the person on the other end.
There are a lot of commonalities, but there are a lot of differences as well. There are definitely some universal things I see almost everywhere, but you need to figure out what each specific market looks like as a starting point.
Second, experiential decisions drive a lot of the relationships between the secondary market and the primary market.
In the Premier League, we’ve seen a number of examples where teams have changed resale programs because their fans were upset about the experience of using certain platforms.
In the US, we’ve seen consignment models and consolidation business models that embrace the secondary market and wide open distribution channels.
We have also seen programs like Pearl Jam’s fan club ticket restrictions that limit a purchasers ability to resell a ticket or transfer a ticket. Similar things have happened with a number of concerts as things have opened up, but most aren’t as comprehensive as Pearl Jam’s in making sure that things go exactly as they want them to go.
The point being that another aspect to consider when people embrace or refute the secondary market is the experience they wish to offer their customers.
In both cases, there are trade offs.
I’m not arguing for either side this morning, but when asking the question it is important to begin by trying to figure out what factors are at play before assuming that people “don’t get it”.
Maybe they get it and they just don’t want it.
And, this doesn’t even begin to bring up the real issues that people have had with bad actors in the secondary market. Even if they are few and far between, the bad actions and outcomes far outweigh the negative in coverage and mindshare…that’s just human psychology.
People love the boogie man!
4. Profile/Tech/Tools:
Smeetz is pushing dynamic pricing to arts and entertainment:
Big Ideas:
Dynamic Pricing isn’t new. There are positives and negatives like everything else.
Pricing is a tangible process with a tangible outcome.
Even if you try to automate everything, you’ll never eliminate the human component of pricing.
Ahh, one of my favorite topics rears its head again: pricing.
I could write this profile up on any number of cool pricing tools like:
Vatic
Broker Genius
Digonex
And, more.
But Smeetz is a new entrant to the market so they get the headline.
First off, I’m a big fan of anyone working to make smarter pricing decisions. You see a lot of bad pricing decisions going down and they’ve only increased since lockdowns have ended and things are opening back up.
As I’ve said over and over, the pricing decision in marketing’s MVP moment because that’s when you capture the value you’ve created for your customers.
Price is about perception. Price tells a story. And, you have to be careful that it tells the right story.
So I don’t really buy into the idea that you set an artificially low price in hopes of “getting people in the door” so that they’ll come back and spend more the next time.
In my experience, this doesn’t drive attendance, repeat purchase, or price integrity.
Second, a tool like Smeetz or any of the others can help you understand some of the areas where you are missing opportunities.
Look at Sean Kelly’s holiday pricing tip here: your opinion on what a customer wants isn’t important, find out what the customer wants.
Third, I like the way that Smeetz talks about tickets having variables, but not being commodities.
I bang on about the commodity word because it feels like talking about commodities undermines the importance of strategy, marketing, and sales and that things just happen miraculously.
When we did the pricing panel in Las Vegas in August at Ticket Summit, one key takeaway for me was how much I’ve seen people’s opinions on pricing and talking about tickets as commodities has changed over the years.
Three things to look for in any pricing tool/partner/technology:
Strong default to human intervention. You don’t want to divorce the human from the pricing decision and tools that default to a specific rule regarding human interaction on pricing decisions are valuable.
A strong emphasis on strategy over tactics. Pricing is a tactical decision that delivers your strategy. Your pricing partners should help you reach your SMART objectives, not be covers for bad strategic decisions.
They need to be willing to show you the upside and downside of the pricing decisions. Along with helping you and your organization understand how to mitigate or balance those upsides and downsides with your strategy.
I guess what I’m saying is that you need to make sure that there is a strategy inherent in your pricing decisions.
5. Links and Blurbs:
How can football have impact on climate change: I’m not going to eat any of that fake, processed meat, but I am concerned about the environment and the impact of some of man’s actions on the preservation of the earth. I also like how thoughtful Forest Green Rovers are about this stuff because they are consistent is saying that it can’t just be environmentally friendly, it has to be as good or better to get people to buy-in.
Rock changed America, but now it is just a diversion: There’s a bit of a kicker at the end of this one about kids still having energy, but no one knowing what kids want. I don’t find this argument very convincing. It is much like every argument that has the data sitting in front of it, clearly spelling out what folks want, and ignoring it with the Alfred E. Neuman shrug of “Who Me?”
It will cost a billion pounds for UK venues to meet the challenge of climate change: I always like to look at stories like this or any with disruption at the core as signs of opportunity. In no way does it steal from the importance of the issue, but you do have to pay attention to the reality that the only thing that is certain in life is change.
The return of Broadway has been “shaky”: It didn’t take a genius to recognize that there was going to be a challenge to relaunching all of Broadway at once. $117 ticket average isn’t bad, but it is down from $125 a week earlier while attendance is down from 77% from 85%. I’m always going to have faith in NYC, but I do think that the situation does require a lot of creativity and a step away from “how we’ve always done things”.
The Revolution rebrand: I’ve been taking a brand management class the last few months. Again, just trying to make sure that my skills and knowledge are relevant for whatever comes next in the world. These new logos and “rebranding” are becoming more common around MLS. This probably deserves coverage in the big story, but first this isn’t really a “rebranding” in the traditional sense of the word. It is more of a re-positioning. Most of these fail for the reasons that the original branding wasn’t generating commercial success or wasn’t standing out in the market. In the case of the Revolution and the Crew before them, the “rebranding” effort is dangerous because it throws out years of positive brand associations, brand meanings, and brand connections.
You can find me everywhere with my special Linktree! It is all my links!
I’m re-upping my conversation with Scott O’Neil this morning because I had several folks mention how much they enjoyed our conversation from the summer.
Check out my friends at Booking Protect! Customers have been taking up refund protection at a rate that is double what it was before the pandemic began. This is a great opportunity for you to offer more value to your customers in a way that they want while also creating a new revenue stream for your organization.