The ticketing giant Ticketmaster is getting ready to be spun off from its parent company InterActiveCorp, or IAC, in August and become a stand alone company. When they do, Ticketmaster will start with a debt of $750 million, a result of having to borrow money to pay a dividend to IAC.
Ticketmaster has begun to explore new avenues of growth, including looking at additional global expansion; helping artists in aspects of marketing, a move to combat the recent deals by Live Nation; and, perhaps the most publicized, become actively involved in the secondary market.
The company completed its acquisition of TicketsNow, the number two ranked secondary market reseller, in February, which is in addition to becoming the official reseller for the NBA, NFL and NHL.
“We are moving into a world where every buyer is going to go and have the option to resell the ticket and place it in a market where they can recoup their investment,” Ticketmaster CEO Sean Moriarty recently said at a meeting with ticket brokers in Las Vegas.
During that meeting Ticketmaster predicted that the secondary market would grow 50 percent by 2012, to $4.5 billion. The reason they attributed to that growth was the fact that more than 83 percent of Americans will be online. According data accumulated by Ticketmaster, in 2007 around 70 percent of all sales were via their site, growing over 20 percent from its totals just five years earlier. 53 percent of that traffic goes directly to Ticketmaster.com.
“[Competitors] drive up their search engine marketing costs to get consumers we already have coming to us,” Moriarty told Bloomberg.
As the growth of the secondary market continues, the company is looking to take over another major market, the international market. Ticketmaster said that in 2003, only 14 percent of the company’s $724 million revenue came from outside North America. In 2007, that percentage almost doubled to 27 percent of their $1.24 billion in revenue, with the company expecting that trend to continue.
While the secondary and global markets have become the cornerstones of the expansion plans of the company, they are also looking to help artists and performers promote themselves to their fan base. One company they will have to compete with in that category is their client Live Nation, who announced earlier this year they will leave the company in 2009 when their contract expires. Live Nation currently accounts for 15 percent of Ticketmaster’s revenue.
“The world is simultaneously getting smaller and wealthier and there’s more entertainment for people on the planet,” Moriarty recently told Bloomberg.
