The Future of Ticketing : How Different Will Things Look?
The pandemic disrupted a historical cash cow. Pausing live events followed by attendance limits resulted in pretty much a lost year for the ticketing industry. But will we look back in a decade and say COVID-19 started the process toward the reimagination of ticketing?
My first draft ran way too long so I’ve ultimately split the topic into a two-parter. This edition will focus on the greatest long-term headwind the ticketing industry is facing and how virtual ticketing technology has the potential to be a savior. The second part will focus more on the current pain points in the ticketing industry and touch on the companies addressing them.
Let’s dive in….
Before going any further, what’s the latest with the ticketing industry?
Ticketing is directly tied to live events. If there are no live events, there are no in-person tickets sold. Duh. For a quick proxy on the pandemic’s impact, Ticketmaster plummeted from nearly 500 million tickets sold in 2019 to 120 million in 2020. Take out the 90 million tickets sold in Q1 2020 and that’s 30 million additional tickets across the final nine months of 2020.*
A quick google search of ‘how have ticketing companies been doing during the pandemic’ yields the following headlines:
- Why most ticketing companies won’t survive COVID 19 (March 2020)
- StubHub furloughs employees, other ticket sites face challenges in wake of pandemic (March 2020)
- Death for the Ticketing Broker (September 2020)
- Live Nation has already lost out on $7 Billion (November 2020)
Ouch. Now I normally don’t advocate using article headlines without reading further (clickbait culture is real) but I think these articles drive home the point. The year has been nothing short of disastrous.
One note before proceeding: When I’m talking ticketing in this edition, it’s meant to be synonymous with live event attendance. In the second part, I’ll separate the two and discuss topics that are more specific to the nuts and bolts of ticketing.
That is some useful context. But you said this edition was going to focus on long-term ticketing. Is there more here than just the pandemic?
Previous editions mentioned some discouraging sports trends such as declining interest from younger generations and the prevalence of the second screen. But in my opinion, the greatest threat to attendance comes from the at-home viewing experience.
Over the past couple of decades, the at-home experience has improved exponentially. It has a whole list of advantages compared to heading to the stadium:
- Improved broadcast production quality – At home you get replays of key plays. You can rewind if you missed anything. Multiple camera angles. The Redzone Channel. Meanwhile, if you’re using the restroom at the ballpark or checking your phone during an inopportune time, you may miss a game’s biggest play.
- Convenience – It’s much easier to get off the couch and grab a beer from the fridge than walk from your seat and wait in a concession line. Plus no traffic driving to a game. No parking troubles. No connectivity issues from the network being stretched too thin at the stadium.
- Cost – The average cost for an NFL ticket is now over $100. When you factor in parking costs, concessions and merchandise, you can buy a decent flat screen TV for what it costs to take a family of four to an NFL game.
- Increased competition – When you boil sports attendance down to its core, it’s a form of entertainment. Which means, competition comes from anything that could fill your leisure time. If I’m watching a game and it’s no longer competitive, I can easily turn on a new Netflix show or fire up a video game. Until the human race solves teleportation, it won’t be that easy to leave the stadium.
Meanwhile, the in-venue experience hasn’t changed much, if at all. Especially if your favorite team hasn’t upgraded its facilities in several decades (some MLB stadiums for example). Sure a team may introduce a new fan feature that gains popularity (Love this) but with the exception of new gameday technologies (mobile ticketing, mobile ordering, social feeds) aimed at removing frictions, when I watch a game at Yankee Stadium today, there’s not much difference from when I watched there as a child**.
Now there will always be an appetite to attend games, particularly from die hard fans. I’m not arguing that the at-home experience will ever become so amazing that stadiums are ultimately left empty. But teams rely heavily on people who only attend a handful of games a year to fill seats. If these casual fans no longer see the appeal of heading to the stadium or don’t want to pony up the high price tag, the entire ticketing industry takes a massive hit.
I get it. Sports properties selling tickets face a serious threat from the couch. What’s the fix out there?
In the previous section, in-person attendance was pitted versus at-home viewing as two possible extremes. But what if there was a middle ground? A way to feel like you are sitting in the stands, cheering with your team but also never leave the couch?
That’s what Tru-Spot Technologies is betting on. Their virtual fan experience technology has the potential to completely revolutionize ticketing. Using 360-degree cameras, 3D renderings, and bi-directional audio, they can replicate the experience of being in a seat at the game, by providing the same sightlines and crowd audio. A fan receives the benefits of being in person and feeling the electricity only available at a stadium, without having to deal with the hassles like parking, purchasing concessions, etc.
Plus, their technology is not reliant on a virtual reality (VR) headset. I’m bullish on the long-term prospects of VR to deliver immersive experiences especially since the price of the hardware has become significantly more affordable ($200-300 vs >$1,000 three years ago). But I wouldn’t want to wear a clunky headset for a full three hour game just to experience the action.
With virtual seating, the revenue upside is massive for the sports properties that control distribution. All of a sudden, you’ve created unlimited new digital inventory that can be marketed and sold.
Let’s use college basketball’s biggest rivalry to illustrate: Duke is playing its bitter rival UNC for the ACC basketball regular season championship. Guaranteed sell out. But as the ticket sales department, I’m constrained by the 10K capacity of Cameron Indoor. Enter Tru-Spot. Now I can sell section 1 row 1 seat 1 to another 10K fans. I’d doubt Duke could charge the full value of a ticket but say a virtual seat costs $20, much less than a normal ticket. That’s $200K created out of thin air. Now add amounts for other available virtual seats in the venue and multiply by all other home games for the year – that’s an easy eight figures of revenue potential if managed properly!
Courtside seats in particular are a great opportunity. Once through my previous employer, I was lucky enough to have third row Knicks tickets at MSG. I was blown away by how jam-packed the court felt due to all the massive humans and how difficult it was for players to find even small open windows to get off a shot. Television broadcasts do not do justice capturing this. Would I pay to experience that same sensation for several games a year if I was already planning to be home? Absolutely. With Tru-Spot, your average Joe could feel like Spike Lee or Jack Nicholson and not need a work connection or have to shell out the price of an arm and a leg.
All that praise aside, Tru-Spot has plenty of hurdles to clear before virtual seating becomes widely adopted. Obviously the company is in an early stage. The technology needs to be perfected and scaled. Once the technology is locked in, the customer experience will need to be fine-tuned to feel authentic and give people a reason to keep coming back. Plus as the SportTechie article mentions, stadiums need to have enough connectivity to process the massive amounts of data (banking on 5G). For many of the older stadiums, that’s a serious undertaking.
I’ll be closely following Tru-Spot’s journey and set myself a reminder to check back in a decade. But I’d bet on the power of technology like Tru-Spot to disrupt the at-home experience. The fan deserves a third option between the current at-home experience and in-venue experience.
Until next time,
As mentioned above, next edition will focus on the current state of ticketing and companies that have emerged to address the pain points. Expect more exciting ticketing nitty-gritty.
*Stats from the Live Nation 2020 10K and Q1 10Q. Live Nation is the parent of Ticketmaster, the dominant primary ticketing platform in the US.
**except for the new ballpark being across the street albeit with the same dimensions, look and feel
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