This Company Wants to Disrupt Ticketmaster's Tight Grip on Your Favorite Events

Services such as Live Nation and its Ticketmaster subsidiary wield control over ticket sales for some of the country’s most popular concerts and sporting events. Customers get rerouted through these sites, bombarded with extra fees and threatened that, if they resell independently, they risk their tickets being voided in an attempt to combat fraud.

SeatGeek, founded in 2009, carved a niche as a search engine to help customers find the best deals among tickets being sold and resold online, as well as a place for electronic tickets to safely change hands (or mobile devices, rather) without fraud worries. Today, the company has announced SeatGeek Open, its official entry into primary sales that aims to eventually compete with the ticketing industry’s biggest players.

Overall, SeatGeek’s goal is to open up the marketplace (despite the fact that Ticketmaster is trying to keep it as closed as possible). Its key differentiator lies in its open-source technology, which will allow artists, teams, venues and the like to present and sell available tickets directly via social media and ecommerce.

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By opening up its software, SeatGeek is giving developers and startups the opportunity to innovate new solutions to benefit teams and artists. “Disruption is sort of an overhyped term, but we’ve seen major industries disrupted by taking advantage of secular trends in technology, like mobile, and taking advantage of open APIs,” SeatGeek CEO Jack Groetzinger tells Entrepreneur. “Ticketing is not one that has undergone that yet, and I think that’s because it really lacks the technical underpinning, the technical rails to make it happen, and that’s what we’re providing here.”

One area that’s ripe for development, and thereby entrepreneurship, is dynamic pricing. While the airline industry has software that updates flight prices in real time, any pricing fluctuations for sporting events, for instance, have to be calculated manually. “You can imagine a whole ecosystem of companies competing to dynamically price better,” Groetzinger says. “I think at a high level, this is going to catalyze a huge amount of innovation in live entertainment that’s been stifled up to this point.”

Any app or website can utilize SeatGeek Open to start selling tickets, provided they receive permission from the team or artist. From there, a seller is also free to post the tickets on more than one app or site at once to expedite sales. SeatGeek will take an “industry competitive standard fee” for each ticket the team or artist sells.

“Even the most iconic brands in America, like Apple, sell across many different channels, many different websites, and that’s because it makes sense,” Groetzinger says. “It’s how people can make the most money and optimize their businesses. Ticketing doesn’t operate that way, purely through historical, contractual reasons, not because there’s any sort of inherent logic to it.”

With SeatGeek Open, Groetzinger explains, artists or teams will be able to find their fans and sell them tickets where they already are, rather than directing them to a singular website to purchase them. The company believes that this will give customers easier access to tickets, boosting sales.

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For example, if a person’s online behavior suggests that he or she is a fan of a certain team or has listened to a particular artist, he or she may find tickets to an upcoming event directly in his or her Instagram feed -- and then buy them, right there in the photo-sharing app.

In addition to integrating its fraud-proof tech that validates ticket exchanges, SeatGeek Open is also a potential way for sellers to vet buyers. Online ticket sales are highly susceptible to scalpers, but Groetzinger says SeatGeek intends to help sellers outwit these non-fans. On social media, for example, a seller could examine a buyer’s profile to decide whether he or she is a true fan and deny sales to brokers. Artists and teams could also gather data about the actual attendees to help them with targeted marketing for future events.

“As we build solutions to help teams and artists better understand the identity of buyers, it'll be important that we carefully consider what info is and is not appropriate to collect, and that we are transparent with users about this,” Groetzinger says. “It's important that users know that their privacy is being handled appropriately.”

In a hint toward Open, last month, SeatGeek became the official ticketing partner of Major League Soccer and announced its plans to begin integrating MLS ticket sales into third-party platforms. While the release of SeatGeek Open presents opportunities for several new sellers, there’s one major exception: Those who are already bound by contracts.

“If the tickets were ticketed via a legacy company like Ticketmaster, then they wouldn’t be part of SeatGeek Open,” Groetzinger says. “Basically, the way it works is teams and venues will sign usually long-term contracts with a particular primary ticket platform. And SeatGeek Open will be adding more and more venues as those contracts expire.”

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SeatGeek Open is also a move to keep up with StubHub, which was originally founded as a marketplace for reselling tickets but inked a primary deal with the Philadelphia 76ers earlier this year to be its official ticketing partner for the 2016-2017 NBA season. The possibility for integration with social networks and ecommerce sites is SeatGeek Open’s defining factor. Plus, just as StubHub allows for third-party resale rather than confining consumers to its walled garden, SeatGeek Open technology works with StubHub.

“If you resold your ticket on StubHub,” Groetzinger says, “StubHub could integrate with these SeatGeek Open APIs to reissue that ticket to the recipient, so that they know they’re going to get a verified ticket to get into the game.”
Edition: October 2016

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