Pictured at the SXSW panel “Going Wide With Ticket Distribution” are Barry Kahn with Qcue, Mark Achler with Redbox, Jim McCarthy from Goldstar and Larry Martin at ScoreBig.
REPORTING FROM AUSTIN, TEXAS — Pricing can only move a ticket so far. Faced with an uptick in messaging for TV shows, movies and restaurants, it’s often impossible to get an offer in front of a consumer, never mind the price.
“If someone doesn’t want to go to a show, then price is totally irrelevant,” said Goldstar CEO Jim McCarthy during the panel “Going Wide With Ticket Distribution” — one of only two panels at this year’s South by Southwest Music Conference (March 12-16) in Austin, Texas to deal with the issue of ticketing.
The other panel was “Rogue Ticketing” with Windish agent Sam Hunt (representing Girl Talk, Chromeo and Matt & Kim) and TicketFly’s Gannon Hall, looking at how acts like comedian Louis CK avoided Ticketmaster with in-house ticketed tours. While the era of the exclusive ticketing contract has not come to an end, many venues are actively seeking new ways to get tickets in front of fans.
“Distribution is the biggest issue in ticketing that no one is talking about right now,” said Qcue CEO Barry Kahn, who led the distribution panel that included Goldstar’s McCarthy and Mark Achler, SVP, New Business Strategy & Innovation at Redbox and Larry Martin, VP of Sales at ScoreBig.
Many teams and producers confuse their ability to set the costs of an event as their best asset to drive sales, something McCarthy describes as the “myth of price” — the idea that the face value of a ticket drives the consumer’s buying decision.
“If someone doesn’t want to go to a show, then price is totally irrelevant,” McCarthy said, noting that his research shows “awareness is the biggest barrier, and second is answering the question ‘Why should I care?’”
There’s also the logistics and availability, “all the psycho-social things and the question ‘Is this the type of event I should be at based on the person I am?’ Eventually when you get to the bottom of the chain, then you hit price. You can fail multiple times before you ever get to a real price consideration.”
Marketing versus Discounting
It’s hard not to see the distribution power of a company like Redbox, which has more than 44,000 video rental kiosks in North America and email addresses belonging to 45 million customers.
Earlier this year, Redbox launched ticketing initiatives in Los Angeles and Philadelphia. Curious about how his organization should pursue messaging, Eckler said his team recently launched two campaigns for the same family show, each marketed differently. Both events were priced the same, but one campaign focused on the fact that service fees for the show were only a $1, while the second campaign highlighted that tickets were marked down 33 percent. The first campaign sold 10-20 tickets per week — the second campaign moved 400 tickets in seven days.
Is that a sign that price is a driver? Not necessarily said Eckler, who noted that the deal could be found on other channels, but when the size of an untapped market was combined with the buzz around getting a great deal, many new consumers were willing to take the plunge and make a ticket purchase. The better the deal the promoter makes for the show, the easier it is to market.
“We charge a dollar fee (for each transaction) and we’re not in the business of setting price— that’s up to the promoter or organizer,” Eckler said. “The better the value, the more aggressive we will market and promote and use our assets.”
And unlike ticketing companies that often silo each client's transactional sales, sites like ScoreBig and Goldstar are able to take a wide approach at setting ticket price, based on their own data.
Goldstar uses a system called Scale Power that determines the price based on matching variables to past events to set the right price and sales goal. ScoreBig uses more of an algorithmic approach, using an individual's past buying history to guess the right price for the consumer against a reserve price.
“ScoreBig is very big on protecting value, making people jump through hoops to get the deal and doing dynamic pricing on the back end. We publicize the deals we make with teams, and we don’t send out press releases,” he said, preferring to work on an “opaque model” where the buyer never quite under-stands where their ticket is coming from.
Shift in sales strategy
McCarthy said he’s seen a shift in the way primary ticketers look at distribution models. Once an adversary to anything that took tickets off Ticketmaster’s own channels, the company and others now see value in third-party distribution and have created integrations to quickly move tickets on and off the platform.
“Its gone from a soviet lockdown to a much more open approach, even at Ticketmaster,” said McCarthy. “They can make money in a whole bunch of different ways – they see value on their side.”
It’s led to a shift in the way promoters approach ticket distribution, he said, noting that Cirque du Soleil often plots out the shows it plans to place on Goldstar a year in advance.
“Organizations need to stop practicing panic marketing — in most cases we know something is going to be a problem pretty far out, so deal with the crisis well in advance,” said Martin from ScoreBig. Shows that are put on sale in a last-ditch effort to grab consumers often fail because fans are now used to buying tickets in advance. The average on ScoreBig is 29 prior to the event — “we are not a last minute channel,” he said.
Do the distribution channels compete with each other? Not really, said McCarthy, who has clients who often use several distribution channels per year depending on their goals.
“It would be stupid for us to shoot our bullets at one another when there’s hundreds of millions of tickets going unsold each year,” he said.
Interviewed for this article: Barry Kahn, (512) 626-5503; Mark Achler (630) 756-8000; Jim McCarthy, (626) 204-3969; Larry Martin, (914) 621-8201