How FinTech Can Save the Live Events Industry

Date: Wed, Jan 9, 2019 at 4:33 AM
Subject: How FinTech Can Save the Live Events Industry

Wednesday, January 9, 2019
How FinTech Can Save the Live Events Industry

Author: Adam Renner, Head of Marketing & Brands, TicketGuardian

Technology has always been a double-edged sword for the live events industry. Re-sellers – whether they’re digital bots or real-life scalpers – can force fans to buy tickets for more than triple their face value. Some estimates suggest that about 60% of the hottest tickets are bought by bots. In the process, ticketing platforms and artists lose control over both their inventory and their cash flow.

Ultimately, the public has almost no chance of getting great seats to the best events at their original price. Ticket brokers, meanwhile, make huge profits on the secondary markets. In the secondary market, tickets are resold at an average markup of 49% (which could go all the way to 1000%). Even with 13 states enforcing the BOTS Act, ticket-buying software still edges out fans and scoop up thousands of seats at the hottest shows (think Hamilton or Taylor Swift’s Reputation Tour).

Source: Forbes, 2016

But technology need not always be the bad guy, especially in a world that’s only becoming increasingly connected. In fact, it’s the emergence of FinTech that is ushering in new solutions to protect consumers and artists alike in ways previously unseen. From inventory control to creating more choices for consumers, advancements in FinTech are providing solutions to mend the broken industry of live-event ticketing.

Improved customer experience

Insurance, as we know it, is used as a tool to alleviate risk and regret, but it’s also an effective form of recourse in the non-refundable live events industry. Consumers already have technology at their fingertips and integrating insurance innovation within the purchasing experience helps to protect them against expensive losses by providing additional choices and conveniences.

Currently, there are very few options for event goers to reclaim their cash if they cannot attend an event, and those options tend to be limited to selling their ticket to a stranger or going through a secondary marketplace such as StubHub. A few startups and ticket marketplaces are giving old-school insurance the Silicon Valley treatment, making the process user-friendly and affordable.

Ticket layaway programs exist for those that cannot afford to pay $400 upfront to claim their spot at a major festival; and while layaway isn’t a new idea by any means, its application through technology is new to the live events industry.

For example, Affirm – an alternative to credit cards and other payment methods – partnered with Eventbrite to give attendees the option to pay for any Eventbrite order over $150 in monthly installments. During checkout, attendees click a link that redirects them to Affirm’s site where they fill out a quick application and receive a real-time decision. Upon approval, the attendee receives their ticket(s) instantly and can begin direct, fixed monthly payments to Affirm.

Greater inventory control

We’ve all been in the nosebleeds and have seen several empty seats, often in a set of two or more, wondering, “How do I get down there?” or “I can’t believe there are empty seats two rows back from the field!”

The current landscape of “no refunds” is problematic for the entire ecosystem. Advancements in technology are offering ways to track tickets so that they don’t have to be sold in a secondary market. Ticketing platforms and event organizers, as well as their attendees, benefit from this in several ways but what’s most notable is the ability to fill those empty seats.

If a consumer is unable to attend an event, there’s currently no reason for them to contact the promoter, the venue, or the ticketing platform to let them know they won’t be there, as they’ve already been told “no refunds” and “all sales final.” However, this kind of interaction is incredibly common in our habitual shopping experiences. If something doesn’t fit, is the wrong color, etc., you’re typically able to gain a full refund with proof of purchase, and the retailer is able to continue engaging with the consumer directly.

These control systems offer a variety of ways to keep the customer happy: they can now file a claim to get their money back if covered with valid proof, possibly exchange it for a future event, or resort to the original option of selling it on their own.

By offering more choice and convenience to consumers, promoters, organizers, venues, and artists keep more of their money and the tickets within the primary ticketing ecosystems, likely avoiding the inflated secondary market. Should a team or venue now know who’s not coming, engaging fans to utilize those empty seats could provide a better experience for some unable to afford seats on the ice or those that have never been in a suite.

Aside from the massive problem of having a non-refundable marketplace, bots seem to be the other primary concern in the industry. Bots scoop up handfuls of tickets in mere seconds preventing humans the option to purchase tickets that are in high demand. One company has been accused of using technology to buy 313,528 tickets over the course of 20 months from 9,047 separate accounts. At times, the company was able to acquire 30-40% of the “Hamilton” tickets available through Ticketmaster.

Tickets purchased by bots are often immediately for sale on secondary sites and are priced several times higher than the price at which they were originally sold for just minutes prior. Consumers are the victim here – they are forced to pay exorbitant prices or forego seeing their favorite artists or sports teams altogether.

While bots won’t be eliminated overnight, tech innovators are in the midst building groundbreaking products that will soon be industry standards, and we can expect greater security and control as a result. Right now, the live events industry is out of control (literally), and it’s here, at rock bottom, where emerging FinTech has found unparalleled room to grow.

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