Secondary Ticketing Market Sees Promise Beyond Treacherous Waters

Pedro Gomes / Redferns
– Open Doors
A fan’s ticket is scanned while entering the Campo Pequeno in Lisbon, Portugal, June 1, the first day of the third phase of easing lockdown restrictions in the country.

As the repercussions of the coronavirus pandemic and the live industry shutdown that accompanied it have rippled across the business, few sectors have been hit harder than secondary ticketing.

“It’s been unprecedented and catastrophic for the entire live event industry and certainly those in the secondary ticket market,” said Gary Adler, executive director and general counsel for the National Association of Ticket Brokers. “An interesting thing for the resellers is they’re getting hit in all directions. One, because there’s no revenue coming in, obviously, but two, because there’s all this recapturing of revenue that they generated in the past.”

Major platforms, such as StubHub, SeatGeek and VividSeats, and independent resellers alike have been pinched from both sides, with promoters and venues scrambling to reschedule and rethink calendars while customers, many affected by job loss and economic uncertainty, seek refunds for events that often have yet to be formally called off.

In normal times, the secondary market facilitates safe, transparent resale and can help desperate fans get into coveted events, sometimes at rates even lower than face value. In the time of coronavirus, with live events almost universally halted, these revenue streams have turned into liabilities.

“The world has been very high on the hog for a long time across the board, in every industry, everywhere,” said Stephen Glicken, CEO of Project Admission, a ticketing platform designed to simplify the buying, transferring and reselling of tickets. “The reflection within the live event industry is the commercial structure between the rights holders, the ticketing companies, the venues. It’s exposed some glaring cracks in how fragile that system is and where the money sits.”

Drastic times have called for drastic measures.

“There are some countries that have recognized that you can’t demand everything be refunded or you’ll destroy an industry,” said Adler, citing Germany, which “codified a law that allowed the issuance of credits instead of cash refunds.”

In America, no such regulation has come to pass. In fact, 14 states require that ticket resellers offer customers the choice between credit and a cash refund, and resale titan StubHub drew criticism early in the crisis when it modified its existing refund policy so that, in the 36 states without such consumer protections, credit was the only choice.

Isabel Infantes / PA Images / Getty Images
– Lights Up
Secondary ticketing is often a barometer of demand, and Harry Styles’ tour – now rescheduled for 2021 – looks just as strong as the original.

Still, SeatGeek co-founder Russ D’Souza says many fans have chosen to receive credit, even with a cash refund option available.

“In many cases, fans have elected to actually use the money they spent on previous purchases into promo codes that they could use at a later time,” he said. “For us, we built a reputation on being fan-friendly, we built a reputation on ensuring that we do right by the customer, and this was an opportunity for us to continue to do that.”

For many ticketing platforms, sales are just one dimension of a multifaceted business that also includes partnerships and cutting-edge technology, so companies with some amount of runway have taken the opportunity to refine other aspects of their offering, be it securing new deals or honing software.

“Products and a lot of the stuff that we’re doing marches on as it normally would,” D’Souza said. “I’ve been kind of shocked at how strong our sales pipeline has been. Choosing a new ticketing vendor is a complex decision, but what we’ve found is that, during times like this, venues want to go with a very strong technology partner.”

Vladislav Ginzburg, CEO of Blockparty, which has sought to apply blockchain technology to event ticketing, echoes the sentiment.

“Every single event you go on-sale for requires customer service and bug fixes and a lot of time and care and effort,” he said.

Companies with a little financial wiggle room have had the rare opportunity to move their products forward without the daily grind of platform operation.

“It’s a rare moment where you can work on the airplane while you’re not flying it,” Glicken said.

That maintenance might be a welcome distraction for some from the uncertain future of live events and ticketing. Take ticket prices, which, after years of trending upward, may finally come back down to earth.

“For a long time, it’s just been going up and up, and I think we’re going to see it flattened or go down in a lot of markets and verticals, in a lot of respects,” Glicken said.

Especially before a vaccine arrives, reassuring wary patrons and getting them back into venues will be among the industry’s biggest challenges, one line of thinking goes, which could decrease demand enough to bring prices down with it.

Then again, there’s a valid argument that prices could continue their ascent. Reduced capacity at events will slash supply, and artists, venues and promoters will want to recoup revenue lost in 2020.

Plenty of consumers will be hungry to make up for lost time: D’Souza has observed demand spikes for everything from the NFL, where he says SeatGeek’s sales have doubled year-over-year, to Harry Styles’ rescheduled tour, which demonstrated sales akin to the original on-sale when the British pop star announced the stint’s revised dates.

“There’s a lot of pent-up demand that’s there for live events,” D’Souza said. “Fans are excited about going back to events. They believe, and there’s a lot of optimism, that events are going to come back this year, which is fantastic to see.”

Unsurprisingly, well-off and financially secure consumers seem to now be the secondary market’s biggest consumers, which explains why, anecdotally, premium experiences and desirable seats have remained in demand.

“There’s more suites being sold for certain teams than there were even last year,” Glicken said. “On the sports side and some of these festivals for next year, they’re all getting sold. People are buying stuff.”

Dire as today’s situation may be for the secondary market, sources throughout the sector think it could emerge stronger, even if it will almost certainly look different than it did before.

“I am hopeful it leads to a lot of innovation and rethinking things, which, in my view, could be good for consumers, and hopefully for people in resale, because before this pandemic it was my strong belief that ticketing was broken for consumers,” Adler said. “Maybe this leads to people rethinking how ticketing works, but to get past this long runway, it’s very, very, very difficult.”

Adler predicts the crisis will benefit his constituents while reducing the influence of less established resellers. Previously, “anyone who had a computer was a reseller, because all you had to do was buy a ticket and spray it out on the web,” he said. Now, “anyone who thought it was easy is finding out it’s not.”

Meanwhile, “the brands in the secondary market have potentially taken irreparable damage,” Glicken said. “I think there’s going to be a vacuum and there’s going to be a pretty big opportunity on the secondary market.”

The most effective ticketing companies excel in multiple ways, Blockparty’s Ginzburg said, and live’s temporary stoppage gives businesses a window to improve their offerings.

“You have to be a great marketing partner for your events, a great technology partner for your events, a great financial partner,” he said. “You have to be three great companies in one. It’s hard enough for a startup to be one good company! This absence of events, right now, is an opportunity for ticketing companies, startups, existing players to think about, of those three things, which of them are they going to nail.”

Companies that figure out that formula will have plenty of business come 2021, especially after  a coronavirus vaccine is readily available.

“I’m as bullish on live entertainment as I ever have been,” D’Souza said. “There’s going to be so much pent-up demand, so much excitement, that you’re going to see record revenues, record ticket sales. People are going to have this huge desire to go out and do things, and once they have the opportunity, they’re going to embrace it, full stop.”

This story originally appeared in VenuesNow