The secondary ticket market will increase its worth by 50 percent to become a $4.5 billion market by 2012. Statistics from Forrester Research, which were presented to ticket brokers at a meeting hosted by TicketsNow and Ticketmaster in Las Vegas last month, support this prediction. TicketNews provided exclusive coverage of this meeting immediately after the event. Brokers gathered to discuss the future of their firms after the Ticketmaster acquisition of TicketsNow. TicketsNow and Ticketmaster attempted to emphasize their commitment to helping brokers sell more tickets at this meeting. Today, TicketNews introduces the first of a series of articles intended to summarize and analyze key points of the meeting, after thoroughly analyzing a tape recording of the fireside chat.
The broker meeting fireside chat opened with a discussion from Henry Harteveldt of Forrester Research. Harteveldt quantified the value of and predicted the future of the event ticket market, stressing that “digital channels will drive the secondary ticket market,” and referenced statistics from “The Future of Online Secondary Ticketing,” a Forrester Report. To highlight the significance of the event ticket market, as compared to the overall entertainment industry, Harteveldt referenced David Bowie’s future vision of the music industry “David Bowie, 21st-Century Entrepreneur,” published by the New York Times in 2002. At the time, Bowie was comfortable with a short-term deal he had with Sony; he knew that in a few years, the entertainment industry was not going to work by labels and distribution systems in the same way.
“The absolute transformation of everything that we ever though about music will take place in 10 years, and nothing is going to be able to stop it,” Bowie said. “Music itself is going to become like running water or electricity…You’d better be prepared for doing a lot of touring because that’s the only unique situation that’s going to be left.”
Digital channels have taken away value from albums and have left the event ticket industry in a favorable position. According to Forrester Research, the secondary ticket market is a $3 billion annual business. The majority of consumers purchase sports tickets on the secondary ticket market; $500 million is spent on concerts and $350 million on theater shows. By 2012, the secondary ticket market is expected to grow by 50 percent, resulting in a $4.5 billion market.
What will contribute to this 50 percent growth? By the end of the year, more than 83 percent of Americans will be online.
“It is quite honestly very hard to go above 90 percent penetration with a technology,” Harteveldt said. “The growth rates are small. It’s a couple of percentage points. You’re not going to see the boom we had back in the late 90’s with double digit growth.”
Mobile ticketing and consumer loyalty will shape the future of the secondary ticket market. Children between the ages of 12 – 18 are very engaged with digital technology; as this group matures and gets ready to purchase event tickets on a regular basis, they will have a natural comfort with purchasing tickets through cell phones. Since mobile phones provide a sense of immediacy, they will be the perfect distribution channel for impulsive ticket purchases. Juniper Research estimates that 208 million users will have purchased more than 2.6 billion mobile tickets via cellular phones by 2011. Ticket sellers such as StubHub, ShowClix, Tickets.com, Ticketmaster and Live Nation have given consumers the ability to purchase tickets through mobile phones. Harteveldt explained that certain issues need to be addressed with mobile technology before this avenue makes a significant contribution to overall ticket sales. Losing the cell phone, being left with a dead battery, or not having the ability to resell a ticket purchase through a cell phone are factors that might prevent a consumer from purchasing a mobile ticket if the concerns are not properly addressed by the companies.
“Digital channels…change how we, as business people, sell to and relate to our customers,” Harteveldt said.
Consumer loyalty, which is heavily dependent upon word-of-mouth advertising, will contribute to the public’s general perception of the secondary ticket market, and thereby contribute to the impact of digital channels on the secondary ticket market. Growth rates are expected to be the direct result of consumers trusting the secondary ticket market and viewing it as a place to purchase and resell their own tickets. Forrester Research estimates that 48 percent of consumers who purchase tickets on the secondary ticket market discuss their interests and shopping habits with others.
A bright future is expected for the secondary ticket market. “This is an enormous marketplace now and one that is going to grow. Some of you may not like this. Some of you may be intimidated by this. Some of you, hopefully all of you, will say, there is an opportunity in here,” said Harteveldt.
The TicketNews weekly rankings and power scores of the top ticket sellers is one tool that will measure the success of this prediction.
Read more articles in this series.
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|June 19, 2008:||CEO predicts huge growth in secondary market|
|June 17, 2008:||CEO admits artists are reselling their own tickets|