Where have all the stand-alone ticket resellers gone? IAC/InterActiveCorp's
Why are the resellers going as quickly as tickets to a Hannah Montana show? Let's just say that the original ticketing agents want a piece of the action when their tickets get resold.
Ticketmaster launched its own TicketExchange platform a few years ago, marketed to pro sports teams. Down here in South Florida, you can snap up choice seats to Florida Marlins, Miami Heat, and, more recently, Miami Dolphins games directly from the season-ticket holders. TicketExchange buyers pay a premium, while sellers also pay a fee.
Now that TicketExchange has broadened to cover more events, I can set you up with a real-world anecdote. I have an extra pair of tickets to next month's Van Halen show. I list them on TicketExchange at $80. Buyers pay a 25% premium. If the sale succeeds, Ticketmaster also collects 10% of the seller's cut. In other words, that $80 listing would translate into a $100 sale, with $72 going back to the seller. The remaining $28 then gets divided among Ticketmaster, the event promoter, and the artist.
Ticketmaster has an advantage here; because it's the original ticketing agent, buyers can shop in confidence. Sites such as eBay and StubHub offer financial guarantees, but you know that Ticketmaster won't sell you a bogus ticket because it simply dishes out a new barcode for the digitally delivered ticket as it cancels the original one.
These are trying times for the music industry. EMI announced this week that it would be laying off as much as one-third of its staff. Warner Music Group's
So why should we be surprised to see a ticketing juggernaut such as Ticketmaster pass on the opportunity to buy a reseller, milking the presence of ticket brokers to double-dip by cashing in on the sale and resale of the same seats? Anything less just wouldn't be a good show.
Psst ... I got three, front row center:
Longtime Fool contributor Rick Munarriz does not own shares in any of the companies mentioned in this story, though he is a freelance contributor to IAC's CitySearch. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.