Digital Challenges for Online EventTicketing IndustryA White Paper by Barry’s TicketsJanuary, 2016

Choosing The Right Ticketing Platform for Ticket SalesWearable TechnologyM-commerce in Online Event Ticketing IndustryPayment Risks in Online Ticketing

Table of Contents

Ticket sales generate roughly 60 to 70% of any given sports revenue, and 40 to 60 % for the music and film industry.

They are the financial backbone of any event organizing and management company.

Evidently, the online event ticketing is an industry that will continue to grow and thrive. However, with the development of new technology, a set of new challenges and risks are emerging for the organizations in the industry. These issues include new payment methods, integration of the latest technology and making the right choices from a vast number of digital options that are set before them.The manner in which these problems are dealt with is the determining factor for success in this highly lucrative and competitive market.

In this research, some of the main challenges of the online event ticketing industry are presented along with possible solutions to some of the biggest issues. With the opportunities currently being as vast as they are, the ticket providers are on a good path to expand their business, provided that they find efficient ways to cope with the emerging challenges.

In 2015, the top 100 movies grossed approximately $10 billion, while One Direction’s 2015 touralone grossed $107 million.The NFL league and its 32 teams, on the other hand, took in anestimated $12 billion last season, a 14.3% jump from the previous year's estimated total of $10.5 billion.

1. The Roadso Far

Another evidence of the future expansion of this industry has been provided by a recent

Redshift UK online survey on ticket buying preferences, according to which an overwhelming 80% of participants decided to purchase their tickets online.

One of the main reasons they named was the fact that it is the quickest and most convenient way of buying tickets, while at the same time they consider it to be environmentally friendly and more secure.

With the rapid growth of technology, from new software to wearable technology and new payment methods, the online event ticketing providers are daily faced with the challenge of adapting to all these novelties in order to maintain the high customers satisfaction in this competitive market.

Prior to the rise of online ticketing, venues had to rely solely on their outlet presence and retail or kiosk sales, as their only means of enabling customers to purchase tickets at multiple locations at the same time. Traditional outlets required trained staff, upfront hardware costs, and are limited by their hours of operation. The Internet was able to change the face of ticketing forever, by enabling virtual ticket sales outlets in each home.

Today, in the US it has an annual revenue of 4.6 billion and an annual growth rate of 3.4 percent. Until 2020 IBISWorld expects the industry’s IVA to grow at the average annual rate of 4.5%.

In 1996 Ticketmaster.com had their firs internet ticket sale for Seattle Mariners. In time and with the development of technology the online event ticket sales industry continued its rapid growth.

2. Choosing The Right Ticketing Platform for Venues

This is a new model which offers a monthly service with zero per-ticket fees. The lack of convenience charges results in lower ticket prices. This means that all ticket proceeds are deposited nightly directly to the bank. Ticket delivery is provided via email, and if on-site thermal ticket printers are available, integrated printing allows for hard ticket delivery by regular mail.The results of using this type of platform are lower ticket costs that translate into higher sales. Additionally there is a substantial financial benefit of having cash on hand through nightly deposits. In the case of venues choosing to add their own fee, they are able to retain 100% of all fees collected. When it comes to music venues, this type of revenue is not shared with the band so it represents an additional revenue stream.

of a concert, play, tour or a sports event can be predicted based on the ticket sales for those events. The choice of an event ticketing platform has a direct impact on when and how your revenue is collected and how tickets are delivered. Most importantly it impacts the price of tickets and the effect that it has on sales and ultimately on consumer satisfaction. Selecting the right platform or company for a specific venue starts with an understanding of the five event ticketing types available.

The success

2.1. Monthly Service Model

This ticketing model results in fees upwards of 25% or more of the total ticket cost. Tickets are delivered via email as printable ticket, or if consumers select a hard ticket it is sent at a higher cost by regular mail. The convenience fees for ordering online are added onto the ticket cost even when tickets are sold at the door. This oldest online model is the most profitable for the ticketing company. The downside of the higher ticket price is the negative effect it has on sales for small venues.This model is slowly plummeting on the market considering the high cost and low customer response to the events ticketed by this type of service.

2.2. Fee Added to Ticket Price

A new twist on the old model. The ticket companies provide a share of the fees collected. Translated into numbers it means that if the added ticket fee is $5.00 and the venue’s share is 10%, the venue gets 50 cents towards its ticket sales revenue. In this case 90% of the profit would go to the ticket company.For venues the problems are the same as with the previous two models. The fee is paid after the event takes place and the drop in sales is significant due to increased ticket price. With this model ticket delivery is done only via email.

2.4. Fee Sharing

The fees are the same as those mentioned in the previous model, the difference being that they are rolled into the ticket price itself and thus hidden from the customers. Opting for this type can result in a sudden jump of ticket price in online sales which in return causes significant loss in the number of regular customers. This model has the same disadvantages as the previous one - higher prices resulting in lower sales number. It can lead to mistrust between the vendor and the customer due to hidden costs. The venue itself receives the proceedings after the event takes place.

2.3. Fee Rolled into Ticket Price

This model is considered to be more feir to venues, considering that fees are not added to the ticket cost. Instead, a percentage is shared with the ticketing company. For example 10% of the total ticket price. This means that a $10.00 ticket means a $9.00 profit for the venue, and proceeds are paid to the venue after the event takes place.

The downside of this model is the fact that venues are responsible for all aspects of ticket delivery upon receiving emailed notification of sales made. This seems like a great option considering that a $25 ticket costs the venue $2.50. The additional costs come from the design, printing, mailing, and administration of the ticket delivery.

Choosing an event ticketing platform or company starts with an understanding of how a service affects sales. Sales are driven by more than the event itself: fair ticket prices, low or no fees, and consumer confidence all weigh in on your customer’s decision to buy and, in the end, dictate the success of your venue.

2.5. Percentage Based Ticketing

3. Wearable Technology

The smartwatch proved to be the best selling type of wearable gadgets, with 36 percent of people familiar with them. Since there is a limited number of such devices currently on the market, only 23 percent said they would be likely to buy one. Making and receiving phone calls was named as the top reason for buying a smartwatch, followed by listening to music and tracking fitness and easier event entrance.

For the online event ticket sales industry the wearable technology has brought significant challenges when it comes to adapting digital platforms for easier use by wearable technology. More and more customers are interested in having their event ticket scanned from their smartwatch. So online event ticket sellers have to plan ahead when it comes to providing the users with the ability to have the ticket code on their wearable tech like apple watch, so that their ticket can be scanned via wearable on the entrance. Providing higher customer satisfaction and comfort while at the same time reducing the ticketing costs.

Another trend gaining momentum in the event industry are RFID wristbands. This is the latest technology, created specifically to help prevent fraudulent/counterfeit ticket activity at events-something that venues are constantly trying to deal with. RFID stands for ‘radio-frequency identification’ and it uses wireless non-contact radio frequency electromagnetic fields in order to transfer data, with the purpose of providing automatic identification. Each wristband is equipped with a tracking tag with unique information about the person wearing it which helps easier identification of the attendees.

The potential of RFID for the event organization future is huge. It will enable organizers to have live tracking option of the event attendance. This collected data is expected to serve as a tool for future event planning. The danger that a device like RFID brings to the online event ticketing industry is the elimination of the middle man. If at a point in future vendors are able to use RFID as tickets it will completely change the current market landscape.

The wearable technology market is experiencing quick growth, both in product selection and profits.

In 2014 wearable technology industry was a $700 million market just in the form of sports and activity trackers and by 2018, it is estimated that this market will be worth some 12.6 billion U.S. dollars.

4. M-commerce in Online EventTicketing Industry

There are several data facts that are detrimental for making online event ticket sales mobile friendly. In the first place there are 1.4 bn smartphone users worldwide as of 2013. According to recent statistics, if a mobile site is not performig properly, 46% of customers who visited that site will never return again. When taking into consideration that mobile traffic makes up 25% of all internet traffic this number is quite substantial. Finally and may be most importantly 41% of smartphone owners are making purchases from their phones. Since mobile ticketing has gone mainstream around 50% of all professional sports leagues now accept mobile tickets at the gate, and this number has a tendency to rise.

The advantages of mobile ticket solutions are quite obvious - from the rise in the number of sales to faster transactions and far greater data feedback on the customers. Brands that are still new to mobile ticketing are faced with the challenge of connecting with their mobile audience and educating them about the new technology and the opportunities that it brings. There are four critical steps that are vital for the success of mobile ticket sales:

Mobile-Commerce growth is expected to exceed $500 billion sales by 2017. Based on this number the value of mobile commerce transactions conducted via mobile handsets and tablets will exceed $3.2 trillion by 2017.

A specialized app is a valuable asset for offering mobile tickets for a long period, to a dedicated fan base that makes repeated purchases. Tickets can be purchased, exchanged or sold in real time.The biggest benefit brought by mobile ticket solutions is the ability for venues to sell tickets up to the minute that the doors open. A mobile ticketing app enables fans to scan tickets from their phone, right after purchasing them from the venue.

1.) Building a Mobile App in order to Offer Real-Time Ticket Sales

Mobile ticket scanning is crucial for adoption of mobile ticketing technologies and it help strengthen the relationship with consumers. Mobile scanners are just as fast as paper ticket scanners and they help eliminate the problems that occur due to losing or forgetting the printouts. In addition the last-minute ticket purchases do not need access to a printer.

2.) Implementation of Mobile Ticket Scanning

All online event ticket vendors offer a privacy policy clearly defining the information they gather during payment. Upon setting up an account, the following information is requested from the customers: first name, last name, address, work phone number or other contact number, account password and a valid email address. Along with these, transaction details of any customer bookings made for an event are also kept on the vendor’s site exclusively for audit purposes.

Financial institutions and other businesses including mobile operators and internet companies have developed innovative and easy-to-use e-commerce payment systems. By doing so they have provided consumers with more effective, convenient, and secure ways of purchasing an expanding variety of products, including digital goods and services.

Mobile ticketing has the ability to collect valuable consumer-based information including age, interests,purchase histories and place and manner of tickets purchases. These insights can help form futuremarketing strategy to the unique needs of the consumer. The obtained data could reveal a large segment of completed transactions of your mobile ticket purchases in the final hours before an event. This type of information helps determine the type of fans that are attending, which in return helps segment the audience in order to develop marketing strategies directly aimed at those groups.

3.) The Ability of Better Data Collection

Mobile devices provide a great option for managing loyalty programs that incentivize consumers to continue buying tickets. According to a model already in place in the NFL, ticket vendors have the ability to award fans points for purchasing tickets, attending events or participating in polls and trivia games. These points then go to future rewards in the form of free tickets or food, keeping consumers engaged with the given mobile ticketing solutions.The goal of having mobile ticketing solutions is to have them assist in customer retention. This helps streamline the ticketing process for consumers and ticket merchants while providing valuable insights on how to be more efficient in engaging consumers in the future.

4.) Engaging Fans Via Loyalty Programs

5. Payment Risks inOnline Ticketing

Giving out this information comes with the risk of it being misused by a fraudulent website. Action Fraud, the fraud and internet crime reporting centre run by the City of London Police, recently released the information that they have received 533 reports of ticket fraud in June of 2015, relating to concerts and sporting events. Out of those 533 reports, 228 mentioned a single company which has recently ceased trading online.

With the launch of ApplePay mobile ticket payment has become more accessible and safer for a larger number of consumers.

Apple Pay is simple to use and works with the credit cards consumers already have on the devices they use every day. Due to the fact that their credit card details are never shared when they use Apple Pay, they are not even stored on the consumer’s device at all. Using Apple Pay on an iPhone, Apple Watch, or iPad is the safer and more private way to pay.

With the development of technology, it has been predicted that the risks in online event ticketing industry will decrease, providing the consumers with an increased sense of security when performing this type of transaction.

Victims of online ticket fraud have lost more than £1.2 million to ticket fraud from June to December of 2015 with nearly 3.000 cases reported to Action Fraud between May and October. On average, customers who bought fake tickets lost £444 per transaction. The best way of avoiding such companies is as simple as checking with the event organiser, promoter or venue how and when tickets are being distributed.

Based on the data provided in this research, there are several conclusions that can be drawn concerning the most important issues and best ways of choosing the right solution.

Firstly, the online event ticketing is a growing industry that is hugely aided by the latest technological developments. In order to keep up with customer demands the leading companies in the industry need to adapt these services in order to make them more accessible to all the new forms of technology, starting from mobile and wearable technology.

Payment methods are one of the major issues companies are trying to deal with. Offering risk free mobile payments and being compatible with the newest technology like ApplePay can make a huge difference when it comes to customer satisfaction.

Finally making the right choice when it comes to using the right event ticketing platform or company is crucial to providing the most affordable ticket prices, which in return increases ticket sales and helps build a trusting relationship with the customer.

Conclusion

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References

A White Paper by Barry’s Ticketswww.barrystickets.com

January, 2016