Following a recent announcement that the company will lay off 100 of their 700 employees, StubHub (NASDAQ: EBAY) has confirmed that starting on July 15, it will reduce the seller fee for all NHL, NBA, NCAA Football and NCAA Basketball events from 15% to 10%, while raising fees for customers.
The company states that this change in pricing is an effort to give ticket sellers the best opportunity to move tickets, and that fee changes are aimed at reducing overall fees paid by both sellers and buyers on StubHub.
Currently the fee changes are isolated to NHL, NBA, NCAA Football and NCAA Basketball events, but the company plans to expand this pricing model in Q4 of 2014 to encompass all events sold on the website.
“Due to ongoing fee testing in MLB, Concerts and Theater, we are waiting until early Q4 2014 to transition all other events to this new fee structure,” the company stated in an email sent to its top sellers.
What will this mean for brokers and top ticket sellers? According to StubHub, markup and changes in the sell fee will automatically be adjusted so that top sellers will still receive the same expected payout on orders. The company also assures that earned fee discounts will remain the same. According to StubHub, “if you have earned a 3% fee discount to reduce your sell fee to 12%, that 3% discount will stay consistent and your new sell fee will be 7%.”
This is the second major shift in fees made by StubHub this year in an effort to increase sales. In January the company did away with hidden costs for the consumer, and adopted a pricing model that incorporates fees into the price originally seen by the customer. According to the Wall Street Journal and a previous article on TicketNews, StubHub experienced a drop in sales after releasing the new pricing strategy. This new pricing model causes ticket prices to appear more expensive since fees are embedded in the price rather than added at the time of purchase. StubHub’s suffering profits suggest that fans are gravitating to sites like TM+, a Ticketmaster resale site, and TicketNetwork that show lower prices and list fees separately.
In light of the recent layoffs and pricing changes at StubHub, industry watchers will be interested to see if the new pricing model will effectively increase sales for the company.