It’s Time For StubHub To Give Back

According to its Q3 financial reports, eBay’s concert and sports ticketing marketplace saw gross merchandise volume jump 23 percent to $1.14 billion, compared with $927 million a year ago.

Revenue for StubHub was $261 million, up 30.5 percent from $200 million a year ago.

So how much of that is actually going to the artists and promoters who take substantial risks to stage the world’s largest concerts? Not much.

“They don’t have any skin in the game,” Irving Azoff told The Wrap Editor Sharon Waxman in a live interview last month in Beverly Hills. “They’re making a lot of money controlling a big chunk of the secondary market. None of that money is going to the right source.”

Azoff’s criticism is not unique but, unlike others, Azoff actually has the resources to do something about it.

His plan? Working with Tim Leiweke from the Oak View Group to better price tickets to what the market will bear, cutting into the potential markups that brokers can charge for tickets to hot selling shows.

“It’s easy to do,” he said. “We don’t really need any legislation. We just have to convince artists to dynamically price their tickets right.”

Whether or not the plan works, Azoff’s missive at StubHub speaks to a larger challenge facing the resale site in the second half of this decade: How does it justify itself in the music ecosystem?

Besides creating problems, right?

The biggest complaint we hear from consumers about the ticket buying process is that tickets for popular shows – like Billy Joel’s upcoming concert to reopen Nassau Coliseum on Long Island – get snatched up immediately and resold on sites like StubHub for exorbitant amounts of money.

Yes, StubHub is seeing continued growth in revenue but, long-term, StubHub is going to face a drop in inventory as companies like Ticketmaster find ways to keep tickets off the marketplace. It’s time that StubHub justify its existence and make a compelling case for what it actually contributes to the music industry.

More importantly, the company needs to create a system for paying the artists from which it profits by marking up their tickets.

Otherwise StubHub’s profits are too large to resist and will become the impetus for entrepreneurs to build a more equitable, fair marketplace that will eventually replace StubHub.

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