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Graham Thornton

StubHub: Can the Middleman's Reign End?

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Since we've submitted SeatSync for iOS approval (and hope to be "live" in the Apple marketplace this week), I thought it'd be an appropriate time to share a blog post I originally wrote for the SeatSync blog

With its aggressive fees and giant scale, StubHub has turned itself into an expensive and unavoidable middleman.

StubHub is big: it processed 10% of all MLB tickets in 2011. In fact, it is the biggest player in a big market: roughly 20% of all tickets are resold on the secondary market. It is a $5 billion industry this year, with 60% coming from sports tickets, and over half sold on StubHub.

First, we must admit that StubHub deserves some credit. It harnessed demand for a better secondary ticket market and entered at a time when ticket resale was still dominated by ticket brokers. StubHub introduced a solution to directly connect sellers and buyers, which effectively created a new process --- and a new efficiency --- in the secondary market. Now, only 35% of tickets resold on StubHub are from big ticket brokers (great video via Forbes); we don't have data, but we doubt that the individual resale market was as big as it is prior to StubHub.

This convenience fueled its rapid growth, but now it has developed a fairly singular selling point: scale. At this point, if you want tickets to a sold out concert or event, you can likely find them on StubHub. Or, if you have extra tickets to a game or show, StubHub is an easy place to list them for sale.

But fans hate the fact that StubHub makes a killing by charging 10-15% service fees to both the buyer and the seller during a ticket transaction. Fans hate the fact that buyers pay a $15 fee when tickets need to be mailed... even if the buyer is located within a mile of your house. Some fans hate it so much that they refuse the fees --- and convenience --- of StubHub and turn to free sites like Craigslist.

So what does this all mean?

Our plans for SeatSync are to build it the same way; we found an inefficiency and created a solution. We are providing a community that effectively cuts out the expensive middleman, and enables fans to exchange on their own terms in their own way. This is good for fans, and has a chance to create a more efficient, transparent marketplace and to drive ticket prices lower (or at least cut the ridiculous fees, anyway).

Our idea is simple: Don't pay high fees. Don't pay high prices. And join the SeatSync Ticket Community.

 

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