March 6, 2021

Ticket Sales Start-Up Aims at Smaller Box Offices

On July 23, 3,000 carnivores salivated their way through Meatopia, a festival on a Brooklyn pier where 45 chefs from around the country offered fleshy dishes like veal belly gyros and Southern pulled-pork shooters.

Meatopia’s patrons were also guinea pigs of another sort. The festival was a test case for a new ticketing system that allows anyone to operate a sophisticated box office — complete with on-the-spot credit card processing and postevent data analysis — using little more than an iPad.

The system was created by Eventbrite, a San Francisco company that in five years has carved out a niche in the multibillion-dollar ticketing industry by focusing not on stadiums and major league sports but on the thousands of events below Ticketmaster’s radar. These can be as large as a Renaissance fair or as small as a private party. But they add up: last year Eventbrite sold 11 million tickets worth $207 million, and this year it projects $400 million in gross ticket sales.

“The notion here is the democratization of ticketing,” said Kevin Hartz, the company’s chief executive. “Things that were once available only to the biggest customers are made available to the masses. In the case of ticketing it was Madison Square Garden or the New York Yankees, but today any event large or small can have just as robust an offering for selling and managing tickets.”

Eventbrite is one of several young companies, including Ticketfly and Front Gate Tickets, that are challenging the major ticket providers by offering cheaper service, extensive social media integration and, most important to consumers, lower and simpler fees. But Eventbrite has perhaps the most aggressive growth strategy; for instance, it allows people to use it for free events for which tickets are required, at no charge.

Eventbrite sells tickets in advance through its Web site, but until now it has been ill-equipped to deal with sales at the door. At last year’s Meatopia, for example, the walk-up line moved slowly, and valuable marketing information like e-mail addresses was not collected.

To deal with similar situations, and to compete more directly with the big guns of the industry, in June the company introduced Eventbrite at the Door. Using an iPad app and a credit card scanner, Eventbrite at the Door customers can let in advance ticket holders and sell 400 new tickets per hour.

Eventbrite’s new system can handle events of any size, the company says. At Meatopia, fewer than 20 percent of tickets were sold at the door. But Randy Fisher, the executive producer, praised Eventbrite at the Door for how quickly it processed those transactions, and for the detailed analysis it generated.

“Eventbrite is to ticket sales what Google is to search terms,” Mr. Fisher said. “It was that quick.”

The company is not yet profitable, Mr. Hartz said. But it has notable support. In May, it raised $50 million from Tiger Global Management, bringing its total investment to $80 million. Its board includes a former chief executive of Ticketmaster, Sean Moriarty, who said that Eventbrite’s fee structure was one of its biggest advantages.

The company charges consumers 2.5 percent of the cost of each ticket plus 99 cents, plus credit card charges of about 3 percent. For a $20 ticket, those fees would come to about $2.10, or 10.5 percent — much less than customers are used to paying through Ticketmaster, where surcharges are often 30 percent or higher.

“We make every effort to run a profitable and successful business, but also do our best to make the fees appear fair and appropriate and not be a burden or an inhibitor to selling a ticket,” Mr. Moriarty said.

But Eventbrite faces challenges in competing for the industry’s major accounts. Ticket surcharges are deeply ingrained in the economics of the music business. Most theaters rely on the fees they get through major ticket providers. And while Eventbrite has surpassed many competing start-ups in sales volume, it is still a small fish compared with Ticketmaster, which last year sold about 120 million tickets worth $7.2 billion.

“A lot of people in the music business don’t want ticketing democratized,” said Josh Baron, editor of the music magazine Relix and co-author of the book “Ticket Masters: The Rise of the Concert Industry and How the Public Got Scalped.” “It’s a business, and venues want money.”

Mr. Hartz said that Eventbrite did not pay advances to theaters, as other ticketing companies did, and did not try to encourage theaters to sign exclusive contracts. That could hinder the company in its efforts to pursue the higher end of the concert business. But Mr. Hartz said he believed that Eventbrite still had plenty of room to grow.

“No event is too large or too small for Eventbrite,” he said.

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