interesting article/concept on the future of selling tickets for baseball (such a large inventory) -
Name your own price for MLB tickets? Twins and start-up TicketRev see a future
As
Major League Baseball navigates the
upheaval in television distribution, commissioner Rob Manfred believes the league has “a massive advantage” with the volume of content it controls. Its inventory, the league’s 2,430 regular-season games, amounts to a bevy of programming that can be dangled to potential streaming partners, well more than other major sports leagues can offer.
But at the gate, where teams have another major revenue stream, the sheer number of games has a different effect: It creates a lot of leftovers. Almost nightly, every team has remnant inventory, tickets it would love to move, but doesn’t.
“The notorious challenge is teams obviously want to increase their attendance, they want to be able to sell more concessions, parking, etc.,” said Jason Shatsky, CEO of the start-up TicketRev.
Shatsky
co-founded TicketRev two years ago around a basic concept: Let people name their own price for tickets to sports and other events, the same approach Priceline once took to travel. The company so far has more than 5,000 users, Shatsky said.
In the early going, he’s found that buyers don’t necessarily have a set budget. Rather, what they want first and foremost, he believes, is a sense they are getting a deal.
“For whichever events or events you select, you will see a suggested range,” Shatsky said. “There’s essentially a horizontal slider in orange. A portion of it is green, that’s where we suggest placing your offer — the closer to the green, the better chance that it’s accepted. We find that a lot of people will go just below the green in hopes of catching a deal. But as we know, prices often drop closer to an event. And so our technology will automatically purchase when it hits a certain price point and your request.”
TicketRev does not promise that a ticket will be available at the price one bids, and the company to this point doesn’t maintain its own ticket inventory. Rather, it takes the bids and brings them to brokers and secondary markets to see if a match can be found. Shatsky said the company is starting to work with primary sellers — meaning, teams themselves — and hopes it can eventually sell inventory directly.
One major league club, the
Minnesota Twins, has its eye on some form of implementation for 2024.
“We’re in the process of exploring what that could look like,” said Chris Iles, the Twins’ senior director of brand experience and innovation. “The ticketing game moves at a very, very slow pace.”
The Twins were one of the investors in a $1.1 million funding round TicketRev just finished. The team has an accelerator that provides funding and hands-on guidance to a class of 10 companies each year, and TicketRev was part of last year’s class.
Iles said he was surprised that a name-your-price option hasn’t taken off before.
“I am honestly, and I don’t know why we haven’t thought of it,” he said. “But we’re really interested to see where it can go from there. … Anything that we can do to make the ticket buying process more fan-friendly is a step in the right direction. The ticketing game has been notoriously tough on fans over the years.”
But name-your-own-price is a tricky space for teams to work in. A lot of start-ups are trying to
reimagine ticket selling. Likely, every one of them at some point has or will brush up against team and league concerns of cannibalization. Teams don’t want to lose the revenue of season tickets, and yet, there’s a need for innovation.
Clubs “can’t lower their individual price below the season-ticket holder rate, because it devalues their product, makes them look bad, and upsets season ticket holders who are committing to a quarter, half or full season,” Shatsky said.
“Teams need a way to be able to sell tickets more discreetly,” he continued. “So what’s great about our product vs. any other marketplaces is that teams are not actually listing their inventory for sale at an advertised price. They’re able to put our white label product with them out either via email, via social media, direct channels, where they can then collect this information on how much people are willing to spend. They have the ability to accept those offers and sell in a much more discrete manner.”
Chris Giles, formerly the COO of the A’s, runs a company called FanRally that is pushing change in a different form, through the use of memberships.
“The broader problem is, we don’t have very efficient ways for monetizing last-minute inventory in today’s ecosystem,” Giles said. “We live in a zero-marginal-cost environment. In other words, that seat that goes unsold not only wouldn’t have cost us anything to sell that seat — we don’t have to hire an extra usher, an extra security guard, an extra ticket taker — but that individual is going to come into the ballpark, and he’s going to spend on merchandise and food and beverage.
“The biggest barrier to progress on this front has been the stranglehold that is the traditional season ticket.”
If the Twins or any other team do wind up wanting to use TicketRev in some form, it would require approval of the commissioner’s office because the league controls digital assets.
“We are never going to sell a ticket for below what we would sell to a season-ticket holder,” Iles said of the Twins. “Our season ticket holders will always get the best price. So you know, a name-your-price tool is probably more of a secondary market type of thing. Which, you know, we find intriguing. … But, I’ll just be clear that we would never undercut our bread and butter, which is our season-ticket holders.”
With the money he just raised in the pre-seed round, Shatsky intends to add staff and attract more users. If the company can scale, the data it can provide partner teams will give them new insights about price points.
“If you have secondary marketplaces or even primary sites, where the price you see is what you pay plus fees, the people who don’t end up buying them, you never know what their interest level was, who they are, how much they would spend with our platform,” Shatsky said. “Even if the team doesn’t end up accepting (a bid through TicketRev), they have the data on who this person is and how much they would pay.”
