Taking The House In-House

Article by Rick Redding, TICKETTRENDS

A Revolution in the Ticketing Industry Show No Signs of Slowing - Venues, Teams and Ticket-Sellers of All Stripes are Moving Toward Handling Their Own Ticket Sales, Gaining Control, Information and Money.

For ticket selling organizations, running the box office used to be a pretty simple proposition. Ticket office managers simply turned things over to Ticketmaster, which set up sales outlets, organized ticket distribution through retail outlets and collected some nice fees for its services.

Last year, the West Hollywood, Calif. company sold 98 million tickets valued at $5 billion through its international network of retailers, call centers and online outlets.

Increasingly, however, ticket-selling organizations are taking advantage of technology to bring back the box office, handling the entire process in-house using software customized to their needs. The software packages incorporate ticket sales, marketing, fund-raising and the collection of data that makes possible all sorts of new strategies.

Executives in the ticketing industry say the convergence of technology with consumer confidence in self-service, especially online purchasing, has dramatically altered the ticketing industry. That helps venues and ticket issuers to do a better job of marketing, targeting and identifying their audiences.

"For a long time, Ticketmaster has made high profits off arts organization by charging exorbitant fees for transactions," said Jack Rubin, who believes those days are fading fast, especially in the arts business.

Rubin is president of Tessitura Network Inc., a non-profit organization of arts-centered groups using its own software products to transform ticket sales and creating a whole customer relationship management system that clients manage and control.

Rubin said that in the 1970s, when computers were less prevalent and much more expensive, it didn't make economic sense for the arts organizations to handle ticketing in-house. But today, using Tessitura and other advanced CRM systems, the economic model makes it an easy decision for many.

The tipping point was the World Wide Web," he said. "Web sites and marketing are now different. You can put together a Web site easily. You don't need so many outlets."

Fred Maglione, president of Philadelphia-based New Era Tickets, said his company is providing opportunities to clients that haven't been available before. New Era has about 15 clients, he said, and many more in its sales pipeline.

"The big advantage is clients get control of their brand," Maglione said. "We supply the technology and set it up. Some clients are selling naming rights, which of course they couldn't have done with Ticketmaster."

At the Wells Fargo Arena in Des Moines, Iowa, Dahl's Food is the sponsor of all ticketing for arena events. The grocery chain sells tickets at its stores, but more importantly it is the brand for all tickets, including those sold and printed online.

Maglione says that the increasing number of consumers buying, and printing, tickets online for all types of events has changed the marketing process. For a couple of August dates by the singer Jimmy Buffett, Maglione said all the tickets were sold online.

The prevalence of outlets, Maglione says, is not so important, though he says the Dahl's Foods sponsorship in Iowa is an example of a unique retail sponsorship made possible by the new technology.

"We give control of the box office to set up and control the customer experience," said Maglione. "That's dramatically different that what Ticketmaster has done."

Faced with increased competition, Ticketmaster is developing technology and marketing programs to meet it. In January, it created Ticketmaster Arts, a new division serving Arts organizations. The program serves arts organizations with features that include customer relationship management, fundraising and development. Five venues under the umbrella of BTI's Center for the Performing Arts in Raleigh, N.C. are among the new system's first clients, according to a Ticketmaster news release.

Last year, New Era parent company Comcast Spectator, the Philadelphia-based sports and entertainment firm, made a strategic investment in Paciolan Systems Inc., a leading software provider for sports and entertainment venues. Paciolan's clients sell 100 million tickets annually, representing a quarter of all live events tickets sold in the U.S., according to New Era.

In September alone, New Era added three new clients in its system. Next year, it expects to acquire Philadelphia's NBA and NHL contracts.

Indeed, the competition in signing new clients is one that is gaining intensity and reach. Tessitura recently signed its first Australian clients, the Sydney Symphony. Ticketmaster has a long list of international clients, and this year has entered acquisition agreements for ticketing operations in New Zealand and Australia.

Tickets.com, a Costa Mesa, Calif.-based ticket solutions provider, has operations throughout Europe, as well as Australia, The Netherlands, Italy, Turkey and Greece. Tickets.com was acquired earlier this year by MLB Advance Media LP, the advanced media company of Major League Baseball. It handles ticketing operations for 11 major league teams.

The growth of all these alternative ticketing options is best evidenced by Tessitura, which convened its fifth annual conference for users in Boston this year. More than 500 users of the software, representing 100 arts-related organizations, were in attendance. Rubin said the first such event, in 2001, had an attendance of 32.

When it began its initiative to create an in-house system, back in 1996, the Metropolitan Opera's intention was not to create a system for other arts organizations. Its initial $5 million investment was simply intended to create a better system for the Met. Now, Rubin said, licensing fees paid by its members go toward improvements in the software and, surprisingly, to refunds to the organizations.

"As a non-profit, we share experiences with other licensees. In four years, our annual fees have been coming down every year for support and upgrade."