Talking Tickets 25 June 2021: Hello Boston! Secondary Market and Monopolies!
Number 90!
Hello from Boston!
Please share the newsletter if you find it valuable. It helps the audience grow and helps me find new and better ideas as we re-open and recover.
Take the sports business survey, if you haven’t already! Let me know what the return of sports ticket sales looks like in your neck of the woods!
I’m off to Miami on Saturday morning and will be there all of next week. If you are around, let me know.
To the Tickets!
—————————————————————————————————
1. Gary Adler and the secondary market are in the spotlight:
Big Ideas:
Consolidation of power is having a huge impact on the ticket ecosystem.
Want to know what’s next in tickets, keep an eye on antitrust enforcement.
Tickets are about people. So create and keep customers as your go-to routine.
This week the NATB’s Executive Director, Gary Adler, had a chance to sit down and do the “True AF” podcast with Eric Fuller.
Gary’s conversation with Eric comes down to competition and betting on the future.
Let me explain.
Last week, I shared a number that I heard three times during the week about how much of the secondary market Vivid Seats controls. That number was pegged at “80%” by a couple of different brokers in different parts of the country.
What ensued was a discussion on some of the Facebook boards about where the number came from, what other folks number was, and a whole lot of things that were not really the point.
The point was that the 80% number didn’t matter, it was the fact that more power was consolidating into fewer hands. The same situation that is happening in the primary market. All that really matters is that the secondary market and the primary market are oligarchies, meaning that most of the power is collected in just a few hands.
I have people constantly ask me about systemic issues and things that are really driving behaviors and changes in the market. I don’t usually talk about them because no one signed up for case studies on the history of antitrust law in the United States, the challenges that tax havens create for folks selling tickets, or any of the stuff that lie at the root of what is going on here.
But the short answer is that as more power moves into fewer hands, historically it skews markets.
I’ll offer up a homework assignment in the form of some reading materials on the history of monopoly power, oligarchy, and monopsony to help you go on a deep dive…in case you are curious:
A history of the term monopoly in America: the term was used a lot through the 1950-1960s, but really has only been used as the name of a board game for the last several decades. One thing I learned is that the better you are at using language, the better you are at solving problems. It allows you a richness in the context of your arguments.
Goliath: My neighbor, Andy, stole my copy last summer, but this is a book that has a rich cast of only in America characters that talks about the 100 year history of monopoly power fighting democracy. While this book is about America, the challenges of the concentration of power are inherent in any society.
The Curse of Bigness: This is by Professor Tim Wu. This matters because President Biden has hired him to work in the White House and advise him on antitrust matters. Combine Professor Wu with the appointment of Lina Khan as the Chair of the FTC and we could be entering a new era of antitrust policy. But this book talks about the need for stronger antitrust enforcement to fight companies that have become too big to fail and that are skewing our democracy and economy.
The core here is that competition is good. It drives innovation, investment, and growth.
This is as deep as I’m getting into antitrust and competition law. That’s my lady’s job. So if you ever hear about this stuff again, it will be because Kathryn has done something awesome.
But the gist of the argument here is that as long as there is less competition in the market, things will become more difficult for people selling tickets because the power isn’t in the hands of the primary side or the secondary side, but the side of the platforms and technologies.
And, the more consolidation, the less innovation, the more expensive things become, and the more customers suffer.
As far as bets on the future goes, it seems that Gary is making a bet that without some sort of government intervention that consolidation of power will continue.
That’s a safe bet to make, but one thing to keep an eye on is the appointment of Lina Khan as Chair of the FTC. She became well-known for writing a paper on the power that Amazon wields over the economy, the unintended and negative impacts on the country, and how antitrust enforcement could help introduce competition into the market.
There are no guarantees that anything will happen. I’ve lived in DC long enough to know that the status quo cuts both ways and there are tons of people in DC that like things just the way they are because it works for them. But her appointment could mean that antitrust enforcement becomes a much more exciting topic over the next few years and that companies that have monopoly power in their industries could get a fresh set of eyes on their businesses.
Again, no guarantees that anything will change, but we haven’t seen someone like Lina Khan or Tim Wu appointed to significant posts in a long time.
As for me, bets on the future of the world of tickets?!
My bet is that there is a sugar rush of demand as things open up and that quickly that flames out as the old sales practices, old tricks, and old habits that weren’t working particularly well before the pandemic begin to lose even more steam.
Another bet I’ll make is that you are going to end up seeing a lot of deadwood on the secondary market. I think Eric quotes a number of around 40% of tickets being sold on the secondary market below face value and I think the number that Gary had used previously was more than 50%. Either way, that is a lot of tickets being sold under face value.
But with the glut of events, you are going to see more deadwood.
Full stop.
People won’t be able to consume everything and they may not have enough money to consume everything.
The final prediction I’ll make today is that eventually there will be a big reset and that will provide a lot of opportunities for folks to create value.
Unfortunately, the pain will come before the pleasure.
But times of instability are times of opportunity. And, if you are paying attention to me, the way to capture that opportunity is to do three things:
Focus on the value you can create for your customers, your business, and the community around you.
Be agile: test and move.
Understand that a successful business does three things: creates customers, keeps customers, and make a profit. But if you aren’t doing the first two, the third one is going to be hard to keep up for long.
2. The West End’s re-opening is being pushed back to July 19th:
Big Ideas:
You need to communicate through these next stages of the pandemic no matter where you are.
Time to insight is shorter and that means you should be learning constantly.
Your customers’ behaviors and your audience makeup are probably changing right now. So pay attention.
If you haven’t gotten your vaccine yet and you live in the States, get it. If you aren’t in the States, take whatever action necessary to get yourself vaccinated. Because it seems that the Delta variation is causing challenges in the States where people aren’t vaccinated in large numbers, South America, and other parts of the world.
In the UK, the re-opening is being pushed back another month to, hopefully, July 19th.
This highlights two things:
We still have to be prepared for some ups and downs.
It is important to keep in touch with people now so that when things do open up, you aren’t caught flatfooted or behind.
In the past few weeks, I’ve hit on contingency planning and having a Plan B often enough for you to know the drill. Figure out the best-case, worst-case, and most likely circumstances and make a plan.
On the other hand, I had a chance to chat with Martin Gammeltoft from Activity Stream this week about the Activate! email marketing tool and he made the point that organizations are going to be challenged if they haven’t been keeping in touch with their customers throughout the pandemic.
Martin tells me that there are a few things going on right now to keep in mind to make sure that you can keep in touch with your audience during these ups and downs:
The time to insight is much faster than before the pandemic. This means that you need to pay attention to your data and the feedback because you are going to learn pretty quickly what is working and what isn’t working.
The share of customers is changing with a lot more locals doing things they may not have typically done in the past due to travel restrictions.
Looking at behavioral drivers is more important than ever since people are making different considerations now than they were before the pandemic.
What does all of this mean for your communications plans?
First, you need a dedicated plan for how you are going to communicate and engage, or, re-engage your audience.
You should have been communicating throughout the pandemic, but what’s done is done if you haven’t…so the next best time to start is now.
Second, simplify the messages.
Keep them short and sweet. In my case, do as I say…obviously since these things get pretty long some weeks.
Finally, test and learn. Like Martin said, “time to insight” is fast now. So don’t be afraid to test something new, segment your audiences in new ways, or try things that might have been out of favor in the past.
The key idea is that the longer this drags on or jumps up and down, the more likely it is that you fall behind if you don’t work to stay in touch with your audience.
3. SI Tix has a new business model and is looking to disrupt the resale market:
Big Ideas:
Most brand extensions fail because there isn’t enough value from the new business for the brand to carry any way.
SITix.com could find themselves in a position where there are paths for them to buck this trend.
The key idea is to look at the platforms that are involved and the network effects that can be created.
Mark Ritson said that the great thing about the internet is that everyone had an opinion about the Coca-Cola and Ronaldo story, even if it wasn’t informed.
Same goes for SITix.com.
People are throwing out theories and ideas about this from all angles.
For me, with my training as a marketer, it is a pretty simple story. This is a brand extension.
And, in most cases, brand extensions fail because enough value isn’t created to justify the attention of the market and the strength of the brand in another area isn’t enough to win it significant market share in a new market.
Examples I’ve shared this week to highlight the challenge of a brand extension include:
The Ferrari fighter jet
Victoria Secret’s move into athleisure
Bic’s perfume
This isn’t to say that SITix will fail because the angle of opening up $10 transactions using Venmo gives them a big opportunity because tremendous amounts of spending moves through the platform.
A big opportunity here is in the form of lessening the friction in the purchase for folks that are splitting the cost of tickets.
There are probably big opportunities there.
There is also the brand of Sports Illustrated.
One of the reasons the brand extensions listed above failed is because their core business has little or no connection to the core business that created the strong brand.
In this instance, the brand and the new business do have a much stronger alignment.
Does that immediately translate to business? No. But it isn’t an entirely blind leap.
The real opportunity for SITix.com comes in how do they combine their advantages to create a new opportunity in the market?
There are a few ways, let’s point out three of them right now:
They can use better more contextual email marketing to drive sales. Most of the email marketing we see now is easy to skip over. Creating a richer customer profile or using the Sports Illustrated brand, database, and traffic to focus on building a strategy that hits at this specific audience could create an opportunity. That’s thinking of SI as the platform around which additional business help it expand its value.
Providing unique value through the Venmo partnership. If you are the only ticket seller that takes Venmo, you can do some really cool integrations there. Especially if the brand can pull off some unique partnerships. Then, you can offer that first to Venmo customers. Think of this as Venmo as the platform with brands around it to drive value.
Creating a new pool of opportunity. Like Tony Knopp points out in the article above, customer acquisition is expensive and, I think, only Vivid is offering any sort of loyalty program currently. There’s potential there. There is also likely to be different opportunity in the B2B market or the fan reseller market that could be tapped now as well.
Again, a lot of these potential avenues are going to take a few months to uncover.
But having been really great at partnerships in my time in the secondary market, having a partner like Venmo opens up the door to many cool activations. And, recognizing that the Sports Illustrated brand may be less valuable than it was 5 years ago is one thing, but it is still valuable and if you play around with the brand as a platform…it can open up some serious opportunities.
4. The Nats and Budweiser offer you a deal to come out to the “old ballgame”:
Big Ideas:
Price is about value.
Value is about three things: creating value, communicating value, and retaining value.
When you have a great offer, don’t be afraid to pound on it.
Let me begin here by saying I went to another Nats game on Friday night to see the Nats and the Mets in action.
A couple of things I picked up on during my visit:
The Nats are doing a really good job of following up on people’s experience using the magic NPS question. So good job. The downside of that is that the survey is much too long. I filled out the entire one, but that’s because I wanted to see how long it was and I like to ask people to fill out my surveys…so fairly play.
The in-seat ordering in left field wasn’t working very well or wasn’t really a value add. In the other two games I went to, once I didn’t order at all. Once, I ordered but I was in all-inclusive seats. So the jury is still out.
The lines for beer and food are still a bit out of reason. I stood in line for about 30 minutes to get a beer and when you add on the time for my son to get an ice cream, we missed a good bit of the game. The staff is very nice, but I’d say they are understaffed. At the prices you are paying for beers, not a good look.
Back to the offer being made by the Nationals and Budweiser, a ticket and a beer for $22!
What’s not to like?
Budweiser made a commitment to give away 100,000 tickets and beer to encourage folks to get back to the ballpark and this seems to be a part of that commitment.
My taste is more Pliney the Elder and Other Half, but free beer with your ticket is a nice value add.
As you might recognize this story is all about pricing! (A subject I’m going to cover at Ticket Summit in August! Get your tickets!)
In my experience working on pricing and helping make probably a million pricing decisions, there are three factors in setting the right price:
Creating value
Communicating value
Retaining value
Let’s go through this offer through that lens.
Creating value:
This is a pretty good value proposition. You go to a game on the weekend, buy a ticket, and get a free beer.
You have a whole bunch of value in this proposition, tangible and intangible:
The game
The crowd
The beer
Summer
The atmosphere of a live event
A weekend out with friends
A sense of relief from not being able to go to a game
I can go on, but I hope you get the point.
Communicating value:
This is where the offer could use a little work because it relies heavily on the idea that folks are going to recognize the value of going to a ballgame and having a beer with friends.
Remember the first rule of marketing is: You are not your market.
The challenge here is that we have to look outside of our “normal” markets because the market of our non-customers is always larger. Plus, we are dealing with folks that may just be coming out for the first time since the pandemic, so we are going to need to oversell the value a bit here to help folks see the value that is being offered here.
Retaining value:
Again, a spot where some improvements would help the offer tremendously.
The big point for me is to talk about the 33% savings.
Again, discounts are for dummies but discounts don’t typically drive sales anyway, they canibalize profits.
I’d also in this case, “FREE” might not carry as much weight as other ways of positioning the value.
You might consider:
A welcome back package
Beer and Ball Bundle
Your first one’s on us
We can play with any number of permutations of the message, but you want to retain the value of the offer because it is a pretty good deal for folks.
If your venue is thinking about ways to enhance the value of your offering, keep in mind the three keys to value and pricing:
Create value
Communicate value
Retain value
You can create value in a number of ways like this package with the Nats does when they add a free beer. You have to communicate the value and keep in mind that you aren’t your audience. In fact, in cases like this, you are likely targeting people that might not be the most rabid fans so you want to make sure you target your message at what they will value. And, retain value by making sure you don’t do anything that undermines your value like talking about discounts and such.
When you have a great offer, don’t be afraid to shout it out…do it and be proud of it.
5. Some links to some interesting stories to close out the week!
Festivals, concerts, and more stuff coming back around the world: I like to look at the world when I’m thinking about marketing and strategy and tickets. Here you see that everything is coming back in fits and starts and we can learn from businesses around the world.
South Korea is easing some restrictions: It pays to look to South Korea because they were able to host some pretty large scale concerts even during the height of the pandemic. If we ever do a serious lessons learned about the pandemic, I hope that the speed of their track and trace program is one that we look to adapt since some scientists warn that as humans impede on the natural habits of more animals, it increases the likelihood of animal to human transmission of viruses. Which increases the likelihood of more pandemics.
Olympics will allow 10,000 fans from Japan with no cheering: If you’ve never been to Japan, go. This no cheering thing will probably work. This is interesting that the Olympics are going forward with fans because the vaccination rate in Japan is very low, less than 20% when I looked earlier in the week. But go on it will.
————————————————————————————————————
Check out my Linktree with links to the podcast, newsletter, website, socials, and all that fun stuff.
Come see me at Ticket Summit. I’m hosting a panel on pricing with confirmed guests: Gene Tinner Jr from the UFC, Mike Garvie from Prolific 1, Josh Ludwig from Ticket Resale Team, and one more special guest.
For a long time now, I’ve been talking with you about the importance of doing market research. This is why I’ve teamed up with Eventellect to create a research worksheet that teaches you how to do your very own Net Promoter Score survey and how to use that survey to gain quantitative and qualitative information about your business. Send me an email and I will get that over to you.
Hook up with the folks at Booking Protect. Refund protection is being taken up at a rate that is about double what it was before the pandemic. This points to a real desire for peace of mind in the purchase process now. Talk with Cat, Cath, Hayley, or Simon and see how you can offer your guests refund protection!
Activate! is the new email marketing tool from Activity Stream. I chatted with Martin this week about the recovery from the pandemic, data, and what Activate! can do to help organizations re-engage their audiences if they fell out of contact.