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Startup Slams Music Biz In Epic Letter
In the 10 years I’ve been reporting on the music industry, I’ve met a number of startup executives who want to disrupt the ticketing business. Their plan is always the same: create technology superior to Ticketmaster or StubHub and win over artists and consumers looking for a better experience.
I like to call it the Innovator’s Folly. It’s an idealistic overemphasis on efficiency coupled with an underappreciation for the complex web of relationships and realities that govern the music industry. Like artists, only a tiny fraction of startups ever break through in music, and most go quietly after burning through their funding.
That’s not the case with Upriise, a Washington, D.C., startup led by entrepreneur Tim Ryan. Upriise planned to launch a new platform for artists to sell tickets directly to fans and cut down on big secondary ticket markups. Turns out his plan didn’t quite work and, on Aug. 5, he gave a middle finger to the concert industry in an epic public letter to his backers.
“The live events industry relies heavily on ticket brokers in the same way that the agriculture industry relies on a cheap and illegal workforce,” he wrote. “Everyone understands how it works and no one really wants to see it go away.”
Ryan was very candid about his inability to break through, writing, “A telling story for us was the lack of interest in our product from artists.”
“What was perplexing to us was that not one of them (and we called everyone) was even remotely interested to learn how our proprietary technology works,” he penned. “We found the solution to scalping, and no one wanted to even see a demo.”
Ryan learned an important lesson on his way out: that there’s very little appetite for change in the music industry, especially from outsiders. We all like to complain about inefficiency and nepotism, but people don’t want to stick their necks out and take a chance on something unproven.
Despite his clear disgust with the music business, even Ryan couldn’t completely abandon his dream. He ended his letter on a hopeful note, keeping the door open for any future takers.
“The technology to deliver tickets with no scalping via our iPhone app is built and ready to go,” he wrote. “It would fill us with great joy to have a chance to use it someday.”
Full letter:
August 5, 2016
Dear :
I’m going to cut to the chase and let you know that we are shutting down the Upriise store, effective immediately. If you have ordered tickets and have not yet received them, you will get a separate email detailing when you should expect your tickets. We will honor all ticket orders and refund requests.
Why is Upriise shutting its store? Well, the short answer is that we could not get access to enough tickets to meet the demand. Most of the tickets we sold on our store were bought the same way scalpers buy them – except that we did not make a profit on the tickets we sold and actually took a bit of a loss. This was a short-term strategy to prove we could sell high-demand tickets and prevent scalping, which we did… rather effectively.
Our longer-term strategy was to build a platform for artists and promoters to sell tickets directly to fans in a more convenient manner and in a way that prevents ticket scalping. This was a bit of a flawed strategy, however, as I detail below (the longer answer).
The ticket resale market is now an $8 Billion-a-year business and with album sales drying up, artists rely more and more on live events for their incomes. Like it or not, ticket scalping has become an intrinsic part of concert economics. A forthcoming blog will go into this in more detail, but the live events industry relies heavily on ticket brokers in the same way that the agriculture industry in California and Texas relies on a cheap and illegal workforce from Mexico and South America. No one wants to publicly admit it, but everyone understands how it works and no one really wants to see it go away.
A telling story for us was the lack of interest in our product from artists. We get that artists and their managers may have been reluctant to take a chance on a new technology or startup – that’s understandable. What was perplexing to us was that not one of them (and we called everyone) was even remotely interested to learn how our proprietary technology works or how we have been able to prevent ticket scalping for the past six months. We found the solution to scalping, and no one wanted to even see a demo. The answer seems clear: the music industry believes scalping is good for business, and so we failed to solve a problem for ticket sellers. Scalping is only a problem for fans – it is not a problem for Adele or Live Nation.
Upriise will continue to act as an advocacy for fair ticketing and will continue to try to attract artists who want to sell tickets to their fans through our platform, ensuring that their fans – not scalpers – get to buy tickets at the advertised price. We remain hopeful, albeit realistic.
If you have not already done so, we’d love to get your support for our petition to lobby Congress for tougher laws that would make ticketing more transparent and democratic. Our petition asks that Congress include language in The BOTS Act that would require ticketing companies to disclose how many tickets they make available for fans to purchase for each show vs. tickets set aside for brokers and insiders.
Finally, Daniel and I wish to personally thank each and every one of you for signing up for Upriise and giving us your business and your support. We have received so many encouraging emails and phone calls over these past several months and even though we lost money selling tickets, it was a pure high every time we notified someone that we had tickets at face value – especially for sold out shows like Adele and Bruce Springsteen.
We will continue to trudge forward, but the future looks uncertain. Who knows, maybe we’ll get an artist who is fed up with the current system and is willing to give us a chance. Although we never released it, the technology to deliver tickets with no scalping via our iPhone app is built and ready to go. It would fill is with great joy to have a chance to use it someday.
Sincerely,
Tim Ryan & Daniel Brasier