Launched less than a year ago, online ticket marketplace LiveStub is closing its doors for the near future. Co-founders Levi Bergovoy and Michael Hershfield founded the company with the goal of meeting the needs of the evolving ticket marketplace. Their platform connected buyers and sellers directly and free of charge by offering technological tools tailored to the sellers and buyer’s needs, such as a Google Maps feature that located sellers in relation to buyers.
In a conversation with TicketNews, CEO Michael Hershfield cited three reasons for LiveStub’s closing: the financial collapse of LiveStub’s key investor, the current economic climate, and major shifts in the ticketing industry.
LiveStub’s angel investor, Morten Lund (most famously a Skype investor), was recently declared bankrupt after losing money in a newspaper investment. As a result, Lund’s investment funds have taken a back seat as he restructures his business and his investment strategy. Lund’s financial collapse occurred in tandem with the decline of the general economy, and that decline also directly affected LiveStub.
Hershfield pointed out that venture investing has been frozen almost to zero. “Tech companies have not been able to find new financing, whether it is us or start-ups in our ilk,” he said. And LiveStub’s micro investment banking backing has gone through its own paralysis, another result of the economic downturn.
But aside from the poor state of the economy, Hershfield said changes in the industry are affecting the way investors see the market. The potential of a Ticketmaster/Live Nation merger and the rise of digital ticketing have created a high level of uncertainty amongst those who might invest in companies like LiveStub. “The emerging monopoly will restrict new players and new investors who are wary of what the climate will look like post-merger,” Hershfield said.
He noted that a Live Nation/Ticketmaster monopoly would create barriers to entry into the market, such as technological barriers. In addition, the life cycle of the ticket could be potentially controlled from beginning to end. Ticket inventory could conceivably be controlled as well.
Despite uncertainty about what place the secondary ticket industry takes in this evolving market place, Hershfield is confident that consumers deserve choice. He believes there is a place for a company like LiveStub, assuming the environment is conducive. Because of this, LiveStub is still looking to raise capital in what Hershfield calls “these unique times that require unique perspective.”
“Time will tell how it will shake out,” he said. “The landscape is changing dramatically. You can’t hold back change, and there’s going to be tremendous changes. The question becomes: Where do the current players shake out in this very quickly evolving story?”