It’s all change in the European ticketing industry, and from the old hands to the new players, everyone’s trying to keep one step ahead, as Greg Parmley reports.

When Fred Rosen, former CEO and president of Ticketmaster delivered his keynote address at Europe Talks Tickets (ETT) in February, he spoke candidly about an industry in immense flux. “Ticketing is one of the last things the entertainment industry has come to grips with,” he said. “This industry has to grow up. It’s going through a life change and the Internet caused it.”

Rosen’s comments rang true. Exactly one month prior, German ticketing operation CTS Eventim announced a global deal with Live Nation, to license its systems exclusively to the multinational promoter in North America while becoming its ticketing partner throughout Europe and beyond.

By 2014, the ten-year agreement is expected to yield an extra 60 million ticket sales annually, almost double Eventim’s current volume (65 million in 2007). As a direct result, Eventim will bolster existing offices around Europe and launch operations in both Scandinavia and the UK over the next few months.

Even without the Live Nation deal, which comes into effect in the US in January 2009, 2007 was a good year for Eventim. On top of impressive performance by its larger promoter division, ticketing revenues (adjusting for the effects of the 2006 World Cup) rose by 31.9% to €87.5m. And aside from its German stronghold, Eventim has operations in Italy, Croatia, the Netherlands, Austria, Poland, Russia, Switzerland, the Slovak Republic, Slovenia, Hungary, Bulgaria, Serbia-Montenegro and Bosnia-Herzegovina.

Until January’s announcement, it was geographically almost a mirror image of the territories in which global leader Ticketmaster operates (UK, Ireland, Finland, Sweden, Norway, Denmark, the Netherlands, Spain, Turkey and Germany) but the Live Nation deal will see Eventim go head to head with its international rival in more countries than ever.

Of all the new markets, Eventim executives are most excited about entering the UK, and they speak of the forthcoming expansion with cautious reverence.

 “We have a lot of respect for the industry there, and we think we’re going to learn a lot in this market,” says Andreas Egger, SVP of international business development.

British Bulldog

  As far as live entertainment goes, the UK market is arguably the continent’s top dog. With admirable levels of ticket sales offsetting tough competition for disposable income, it has historically been a golden castle with access reserved only for domestic operators, and the arms of US multinationals.

This year, however, the drawbridge has lowered. The Eventim announcement was beaten to the punch when two weeks prior, Netherlands-based Stage Ticketing International announced that it had purchased the UK’s See Tickets, also giving a continental European company a foothold on British soil. The Stage group includes Ticket Online Germany, Poland and Austria; TopTicketLine Germany, Netherlands, France, Spain and Russia; and Belgian outfit Sherpa.be. Adding in See’s 9 million annual ticket sales, the group now shifts in excess of 40 million annually.

“It’s the first time that a continental European organisation has been able to set foot in the UK,” says Klaus Zemke, MD of sales for Ticketonline. “We’re very anxious to see what this will bring us.”

 With Stage having snapped up the UK’s second largest ticketing operation and Eventim inbound, all eyes are now on Ticketmaster. Live Nation’s inventory might only have accounted for 10% of its inventory, but with rumours of a deal to part buy AEG Live, and a European expansion plan which shows no sign of letting up, Ticketmaster is hardly rolling over and letting the invaders riffle through its pockets.

Six years ago, only UK and Ireland had Ticketmaster operations but it’s now active in ten European territories. “It will increase its footprint in Europe and seek opportunities that allow it to go broader and deeper,” says Tim Chambers, director of sales and music services. And while it’s unable to provide European sales figures, Ticketmaster sold 142 million tickets worldwide in 2007, valued at over $8billion (€5b).

 As an indicator of the European market in general, the energetic expansion of Europe’s top three companies shows an industry in both rude health and a state of transition. Far from having fallen, the chips are currently in mid air, and no one’s quite sure where they’re going to land.

“The assumption that the current players are going to continue to have the market to themselves is a falsehood because there are daily, weekly and monthly new entrants at the local, regional and national level,” Chambers says.

“It’s a very fluid market,” he continues. “Some artists and promoters want to do their own ticketing, and some wish to externalise and use the ticketing agency scale.

More events are going on sale than ever; the range of ticketing has increased and diversified, and there’s a readiness to buy tickets in advance which shows consumer confidence with the event ticketing industry.”

LOCAL FLAVOURS

There may be more tickets to sell, but a considerable barrier to the growth of pan- European ticketing agencies is the specific and individual needs of each territory. Europe is still a fractured market with many different legal and tax systems, finance, currencies and consumer cultures. Not only that, but the ticket buying habits of consumers vary wildly.

As an illustration, Scandinavians expect to be able to reserve tickets for 48 or 72 hours, Germans have a long-held distrust of credit cards and often comparison shop, the Spanish traditionally buy tickets from savings banks, and with low credit card ownership, Turks generally purchase tickets in cash from outlets.

“There are markets where the online business is still almost irrelevant and others that have 60% of sales online,” Eventim’s Egger explains. “In every market that we’re rolling out, we let the market decide what the market needs.”

And while the lucrative service charges to be made in Western Europe keep ticketing companies catering carefully to each market, there are arenas-full of new audiences coming online. New arrivals in the European Union have added hundreds of millions of new customers, albeit with a lower value of tickets and subsequently reduced revenues from service charges.

For the last three years, Austria-based Ticketline has operated in Serbia, Croatia and Slovenia, having established early bases in relatively uncrowded markets and waited for them to grow. “The South Eastern European markets are still free of systems at the moment but they’re complicated,” says Ticketline’s Klaus Hofreiter. “I’m expecting that we should be able to do enough business to stay there, and expand into other markets. We want to be working in seven or eight markets in total.”

Also having set up shop early and now reaping the rewards is Ticketpro, which sells 6 million tickets annually across 13 countries internationally. Its operations in Czech Republic, Bulgaria, Slovenia, Hungary and Poland were all established by 2003.

“I never enter a marketplace if I’m not teaming with someone local who’s strong and will bring expertise and knowledge,” says MD Serge Grimaux. “I need operators in each market who know the marketplace. That will mostly dictate my decisions.”

Changing Roles

While ticketing operations throughout Europe are coping with disparate market conditions, another factor keeping the industry in perpetual development is the changing expectations of both their clients and customers. The role of the ticket provider is no longer just to distribute stock; increasingly the ticket agent is relied upon to help sell the show.

“I came into the ticketing business as a concert promoter,” Grimaux says. “When I designed the software it wasn’t to sell it, it was to provide a service that we’re proud of. As a promoter I know that 45% of all tickets overall in live entertainment remain unsold, so we will always aim to be a marketing partner; to help the people who take the risk fill the seats, not just sell the ticket.”

Consider that a recent study by the German Institut für Kulturmanagement found that only 3-5% of the population of Western Europe were intensive users of the arts, while 45% were either potential users or just not being reached, and there’s a considerable role for a ticketing partner to build.

Eventim’s Egger says: “It’s not enough anymore to be just a distribution company; we understand ourselves better as a ticket marketing company. The requirements and needs of fans and promoters change constantly so it’s increasingly important to have a wide database of customers in order to cross-sell between artists. We know who our customers are, how much they spend, what there main interests are, how far they travel to see shows and much more.”

One of the ways Eventim helps market shows is through cooperations with local radio and TV shows, as well as publishing free listings magazines such as Event in Germany, Ticket in Austria and Free One in Italy. This year, Ticketmaster is increasing the number of promotions it runs with iTunes for combined presale tickets and downloads, after its Foo Fighters promotion in August/September 2007 clocked up the largest pre-order that iTunes Europe had ever had.

And what the majors prove with action, Richard Brundle of Europe Talks Tickets agrees with words. “The primary market has got to work closer with their customer – the producer and agent,” he says. “It’s got to be more inventive than it is currently in terms of pricing and easier delivery. It’s transparent enough, so it just needs to improve the level of service.”

But while various marketing channels and synergies are being explored by ticketing companies, Stage’s Zemke sounds a note of caution about their core role. “The ticketing agent and companies are typical service companies,” he says. “They are becoming more efficient, profitable and powerful organisations, but their role is one of service to promoters and not being there for their own glory.”

A Focussed Offering

While the larger service providers utilise cross-selling and the sheer volume of traffic to their Internet sites, one developing trend follows a wholly different premise. The Internet has simplified many ticketing operations and reduced the need for cumbersome call centres, and as the required level of investment has dropped, an increasing number of software providers are offering ‘out of the box’ systems.

Galathea is part of the Seatem group of companies, providing a range of ticketing related services including websites, Internet and CRM ticketing, web affiliate services and access control systems. Its Enta product is a plug and play system requiring only Internet access. It’s a managed service with no capital expenditure to set up – Galathea simply charges on a per ticket basis.

“Technology empowers people to take control of their own ticketing and we’re increasingly seeing that,” says director of sales and marketing Sue Scott-Avis. “I think a lot of the ticketing elements will all come back in house. [Venues and promoters] don’t have to rely on Ticketmaster anymore.”

Another international solutions provider is VisionOne, whose ShoWare product is widely used throughout the US, Europe and Latin America. Pascal Zürcher is CMO of European operations in Switzerland, and he believes that as venues take the independent route, the fans benefit.

“With call centres, if you have people that actually work for your own company, the service is very different than if you’re working on 1,000 events – the staff have more knowledge, so they can really support the event. They’re faster at interacting and it’s a much more personal service.”

Indeed, there are instances where the larger operations of the ticketing giants are unsuitable, and businesses are growing under the radar. In the UK, WeGotTickets.com runs an eTicketing web-based solution based on customers purchasing a confirmation code which is simply handed over at the venue door. Designed to add just 50pence on a £5 ticket, the company is on course to sell 1 million tickets in the UK in 2008.

Also in the UK, TixMob is a relatively new company that combines mobile and Internet ticketing, and optional access management for festivals and events. Having recently partnered with Virtual Festivals in the UK, it is currently offering specialist marketing and ticketing services to a number of small and mid-sized festivals.

“Promoters are looking for more control in terms of the databases, the cash and knowing what real-time sales are like,” says TixMob’s Ramesh Kumar. “They want to be able to market their tickets through other channels like MySpace as well. For those reasons, people are moving towards more flexible, innovative and commercially aggressive companies.”

It is perhaps inevitable that the very companies offering smaller, alternative options to the likes of Ticketmaster and Eventim are also the same decriers of their impending doom and downfall, but the proliferation of smaller, software driven offerings and back end support companies does indicate how the Internet is changing the face of the sector, and that increasingly, venue owners and promoters are doing it themselves.

In fact, when it comes to the potentially lucrative service charges and booking fees being demanded, it sometimes seems that everyone is after a piece of the action. Earlier this year, booking agency Primary Talent established ArtistTicket.co.uk to sell inventory direct and through artist websites, allowing the revenues from service charges to largely filter back to the act.

“I always agonise over the right ticket price for the artist but hardly anyone ever gets a ticket for that price," said Primary’s Dave Chumbley at this year’s ILMC. “Part of what I’m doing is to hopefully control what the end user pays for a ticket in the primary market because otherwise it’s not fair and
I’m not representing my artist properly.”

The issue of service and booking fees is a thorny one, and for the sake of space constrictions in this report, not one to be focussed on, although Ticketpro’s Grimaux makes an astute point when he says: “The countries where the highest service charges exist are countries where the ticketing company margins are probably the smallest.”

Just The Ticket?

Clearly, control of the ticket – its distribution, allocation and the revenues from booking fees – has become a muddied battleground as ticketing companies develop new services and markets to keep the artists, managers, agents and promoters convinced that they offer good value. Meanwhile, since the concept of rebates became publicly known a few years ago, everyone in the value chain is angling for a larger slice.

And it’s not just the markets surrounding the ticket that are changing, but the very product itself. Even leaving aside the technological implications, the ‘ticket’ will soon be far removed from “a piece of paper or card giving the holder a right to admission” as the Oxford English Dictionary defines it.

“The ticket will be redefined,” Chambers says. “Historically it’s been one price, but that’s changing with the VIP experience, the fan club experience, and various memberships etc. Going forward, it may well include travel and accommodation and value added packages – digital downloads and bundles.”

From dynamic pricing to the secondary market, from the jockeying in international markets to US venue deals affecting ticketing partner choice worldwide, and through the myriad of different business models that exist, the European industry – and indeed the global ticketing market – is metamorphosing.

“There will continue to be a wealth of ticketing companies and operators,” Chambers says. “The overall size of the market will increase in terms of the range of diversity and the types of events that are ticketed, and as new emerging markets become part of the mix they’ll become increasingly important in terms of the economics.”

In the short term, the effects of Live Nation’s decision to take control of its ticketing will see the major ticketing companies jostle closer than ever for the control of key markets. And long term, while new technology redefines the interaction between the fan, artist and industry, increased broadband penetration across the continent will not just revamp the entire consumer experience, but it could decide how, where, when and who sells the ticket at all.

GREG PARMLEY

To read other articles relating to Ticketing, click below: 

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