Talking The Future Of Sports Tickets With StubHub's CEO
"CAVING" IN TO DEMAND?
Darren: Do you ever think you'll cave and design a system for allowing paperless seats and "flash" seats to be sold on your site?
Tsakalakis: We are in favor of any technology that provides fans with a better experience. Paperless tickets and flash seats allow a buyer to show up at the venue with just the credit card they used when they purchased their tickets and that provides some convenience. However, paperless tickets and flash seats currently restrict the rights of fans by either not allowing transfer or resale or only allowing resale on the site of the original ticket issuer. As such, they take away the choice of fans to give away or resell their ticket. When paperless tickets and flash seats remove their restrictions and restore fan choices, we would be happy to have StubHub be one of many marketplaces where those tickets could be resold.
Darren: After the BCS fiasco, how have your policies on "short selling" tickets changed?
Tsakalakis: Just to recap on the BCS national championship, when all was said and done, our buyers got the tickets they were promised. Before the game, we had a few sellers who were unable to deliver the BCS tickets they had promised our buyers. StubHub remedied that by buying tickets on the open market and from some of our buyers who had already received tickets. In many cases, we paid 3 times what buyers paid for their tickets. At the end of the day, every StubHub buyer of BCS tickets got what they wanted and, in many cases, got upgraded with better tickets than what they originally bought. StubHub paid for our sellers’ mistakes so our buyers didn’t have to. We successfully satisfied our buyers and I’m proud of that. Once we made sure our buyers got their tickets, we created stricter policies around what sellers can sell and we continue to hold sellers fully accountable for their sales.
Darren: What percentage of sellers on your site are full time brokers vs. part time brokers vs. casual fans?
Tsakalakis: In 2010, approximately 65% of our sales were by individual or part time sellers and 35% were by large sellers or brokers.
Darren: Some brokers in general feel like TicketMaster will struggle with dynamic pricing as the company is taking for granted how many seats TicketMaster has to sell relative to the secondary market. Do you have any predictions?
Tsakalakis: It’s too hard to predict without knowing which events are going to be dynamically priced and how high or low the price floors or ceilings will be. It’s also unclear how much risk primary sellers will take in selling their tickets. Will they wait until the last minute to sell everything or will they shoot for an early sell out? From our experience, it‘s nearly impossible to dynamically price tickets 4-6 months before an event takes place. There are just too many variables to account for and demand can fluctuate widely, especially as early reviews come in or as market conditions (e.g. weather, competing events) change. It is very hard to price so that all of your tickets are sold and you’re still maximizing revenue.
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