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Guest Commentary: The importance of ticket brokers
The ticketing industry is one of the most misunderstood industries in America. Unfortunately, the role and function of a ticket broker is even more misunderstood. It's worth taking a minute to explain what a broker is and what services they provide.
Like many industries, ticket brokers are salesmen trying to provide a service to consumers. Each broker has their own strategies and techniques that they use to satisfy their customers. Some brokers still only do business over the phone and in person. However, the majority have adapted to the times and do a mix between online and phone sales.
What many people don't recognize is that ticket brokers provide a great deal of value. Brokers accumulate a great wealth of knowledge regarding venues, seating charts and specific events and then share this information with their customers in order to maximize their clientele's enjoyment.
Unlike primary ticket marketplaces, which are run similarly to large corporate companies, brokers provide tailored and focused support 24 hours a day, 7 days a week. This broker community is an extension of the primary market, and they help market events as well as drive overall sales.
A ticket broker's business is dependent on them owning their own ticket inventory. This allows them to service their customers when they are called with requests. Is it true that ticket brokers are trying to make a profit? Yes, of course they are, but this is no different than any other corporation, LLC or individual stock trader.
Could you imagine going to a specific car dealer and the dealer says, "Sorry, we don't have the car you are looking for"? It happens, and when it does, consumers go elsewhere. So before the broker knows what event is going to be a hit or not, they put their money on the line to satisfy their customers' needs. This is done before knowing consumer demand or price sensitivity.
We often hear about the sold-out show for which fans can't buy tickets at face value. But seldom do you hear about the hundreds of tickets that were purchased for last year's favorite musician, who no longer sells out venues, or about the thousands of sports tickets that cannot be sold because the team is having a bad season.
In some of these situations, the musicians and promoters still do well. However, promoters often guarantee musicians a fixed amount of money to go on tour. The risk of the payment that the promoter guaranteed to make is quickly transferred to the broker community once the tickets are available for purchase. Thus, the broker helps to provide liquidity for the guarantees that are made.
Furthermore, we all have come to love the services that modern brokers provide. The ability to view and purchase specific tickets in a (somewhat) transparent marketplace is one of the many reasons why StubHub has become successful. However, this information is actually fueled by the broker community.
Brokers spend time inputting valuable ticket information into databases, as well as setting appropriate prices. Basic economics of supply and demand then drive the direction of prices. This also requires ticket brokers to dedicate significant time to make sure their tickets remain competitively priced.
The ticket broker business has become a legitimate industry and with 2,500 ticket broker companies in the United States, this industry employees thousands of people. The National Association of Ticket Brokers (NATB), which has 269 registered brokers, is helping drive legitimacy within the industry by setting ethical standards and guidelines for brokers to follow.
Whether the regular consumer knows it or not, ticket brokers are the lifeline of the ticket industry. Although the ticketing industry is changing quickly, the ticket brokers who evolve with the times and provide honest services will continue to exist and thrive for a long time to come.
Brett Goldberg is an entrepreneur, live event fanatic, ex-investment banker and a Yogi. He spends his days and nights working on www.tickpick.com, an innovative ticket marketplace that makes buying, bidding and selling tickets to sports, concerts and other live events fun and easy. Tickets are listed based on a combination of seat quality and price, the "deal rank." In addition, TickPick offers buyers the ability to bid on tickets for a variety of section(s) or group of sections that they desire. The buyers bids differ in price based on seat location and seat quality, resulting in the submission of firm offers. Sellers are then given the option to execute transactions at the highest bid price. TickPick is the first dynamic two-sided ticket marketplace.