Tickets.com attacking Ticketmaster dominance with open cloud systems

Open cloud system challenges convenience fees for US concert goers

There are few monopolies as total as the one enjoyed by Ticketmaster. When's the last time you purchased a ticket online without paying Ticketmaster's $10-plus "convenience fees"?

Ticketmaster has beat back every competitor's attempt to displace it from the top of the online ticketing industry, but John Rizzi, vice president of product management and strategy at Tickets.com, is hopeful that a partner ecosystem based on new cloud computing technologies can eat away at Ticketmaster's dominant market share.

Tech arguments: Public vs. Private cloud

In a speech at the Cloud Leadership Forum, a conference hosted by IDC and IDG Enterprise, Rizzi took a few shots at Ticketmaster while acknowledging his own company's struggles to compete.

Tickets.com began with the idea of connecting to many different ticketing systems, like an aggregator site, but the approach failed because it lacked a critical mass of tickets to sell.

"The dominant player in the industry far and away is Ticketmaster and they had no intention of letting us sell tickets online for them," Rizzi said. "They wanted to do it themselves."

With Ticketmaster, "anybody who's bought tickets online knows how ridiculous the fees are. You pay a convenience fee. You pay an order fee, you pay a fee to print the tickets at home. This is a very hard model to compete with and we've tried to compete with it, other companies have tried to compete with it, and it's not working."

Tickets.com went on an acquisition spree in the early 2000s, buying four or five other ticketing companies. Tickets.com now sells tickets for half of the teams in Major League Baseball, and is a subsidiary of MLB.com.

Rather than focusing mostly on customer-facing technology, Tickets.com is now trying to make headway by selling ticketing systems to sports teams and other organizations. Ticketmaster still controls ticket sales of the other baseball teams Tickets.com doesn't sell for, as well as many other professional sports teams. But Rizzi believes his company's approach of partnering with a variety of cloud vendors, using APIs to connect one service to another, will drive innovation in the industry.

For example, Tickets.com partners with Qcue to provide a dynamic pricing engine to teams such as the San Francisco Giants. With dynamic pricing, an algorithm takes into account pitching matchups, weather, the opponent, day of the week and market conditions to determine the optimal price for an event. While a team like the Boston Red Sox needs little help selling tickets, and can charge whatever it wants, this dynamic pricing model has helped the Giants increase sales, according to Rizzi.In addition to Qcue, Tickets.com is embracing a variety of partners, including Salesforce.com, StubHub, Givex and FanSnap. Rizzi believes partnerships will help differentiate Tickets.com from Ticketmaster.

"We really believe the ecosystem is what's going to drive innovation and the adoption of our ticketing platform," Rizzi said. "We're not going to be able to out-Ticketmaster Ticketmaster [alone]. Ticketmaster's systems are closed. So are the other competitors in our marketplace."

Rizzi pledged to improve the ticket-buying experience for customers, which he said has evolved slowly. He acknowledged that Ticketmaster is starting to improve in certain areas, such as allowing limited ability to choose specific seats, but in general he claimed the Ticketmaster technology is antiquated.

"Ticketmaster has conditioned this market to ignore technology," Rizzi said. "Buying tickets online, the experience is awful. It's really antiquated, it's very old, it's not very flexible. We are coming at a time where the teams are starting to realize that they want to change, they don't want to be beholden to Ticketmaster anymore."

Follow Jon Brodkin on Twitter: www.twitter.com/jbrodkin

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