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Ticketing upstarts take on the entertainment duopoly

Ticketing upstarts take on the entertainment duopoly
1-Night, Dash Tickets, and Ticket Direct are giving the complacent entertainment giants a serve.

The founders of 1-NIghtThe founders of 1-Night

Tired of high fees and frivolous add-ons from the ticketing industry's two big players? A collection of challengers is giving the complacent giants a serve.

There aren't many industries in which two, large, evenly-sized competitors can be found sharing a comfortable seat that gets most of the all-day sun. But that’s exactly what ‘rivals’ Ticketmaster and Ticketek have long been doing in the ticketing industry.

Now, the companies that love nothing more than hidden extra costs, dismissing customer complaints, high booking fees, and incongruous add-ons for ticket pick-ups, are being thrust into the limelight.

It comes as no surprise to anyone who has ever bought a ticket that the duopoly has failed to provide the best outcomes for consumers – and there’s business pain on the way, courtesy of a few startups looking to give customers what they want.

Better prices, more transparent processes, and cleaner, greener tickets are all on the cards. The question is, can the little guys continue to grow their market share and take more venues and contracts away from the kingpins?

The major small-scale ticketers, 1-Night, Dash Tickets, and Ticket Direct, are fighting for the events that fall from the table of Ticketek and Ticketmaster. It's a competitive industry but the upstarts' market share and reputation is growing. They all have different starting points that set them apart in their bid as number one contender for the position as big little guy.

Nick Schembri

Nick Schembri of Dash Tickets

Dash Tickets chief executive Nick Schembri says his company’s advantage is in its ticketing platform, Facebook integration and strong relationships with venues. Event promoters and organisers build their own event through the easy-to-use website.

“Ticketmaster and Ticketek don’t let this happen,” Schembri says. “They want total control.”

Dash has plans to expand into the Australian market soon, backed by a large, yet to be divulged Australian record company. The company, part of Wellington incubator Creative HQ, won startup of the year at Launchpad in 2010.

The largest event in the company’s three-year existence has been the Christchurch Arts festival – 20,000 tickets over eight weeks. Dash’s booking fee is tiered depending on the ticket price but is usually between $1 to $4.

Meanwhile, 1-Night has cornered the New Year festival market with the much coveted Rhythm and Vines 2011 on its books, as well as Rhythm and Alps in the South and La De Da in Martinborough.

The five businessmen that make up 1-Night are invested in the music scene. They know their target audience and are making major in-roads, committing themselves to providing cutting edge technology and reducing the huge paper wastage accompanying events by providing reusable cards and iPhone tickets to enter gigs.

1–Night’s strength is its innovation, combined with zero cost to promoters and low booking fees for consumers – something that’s long been a bugbear with the existing duopoly. The company has more than 65,000 members, and its smartphone application has been downloaded more than 16,000 times. To date, it’s ticketed 235 gigs, events and festivals in 17 months.

Co-founder Josh Dry is eager to get the message across that the company he owns with his four friends is going to rip up the industry and dispose of paper ticketing; in five years smartphones will be the norm in ticketing.

“Paper tickets are part of the old age,” Dry says. “The big guys will have to use smart-phone technology if they want to keep up.”

Matthew Davey

Mathew Davey of Ticket Direct

Ticket Direct has a serious stake in the market, with millions of tickets on its book each year. The company is an alliance of more than 100 venues in New Zealand and Australia, and in a similar model to Dash Tickets, venue operators and promoters control their own ticketing.

It isn’t all sunshine and roses though. Wellington Regional Stadium marketing manager Steven Thompson believes Ticket Direct can’t easily handle events over 10,000. Chief executive Mathew Davey laughs it off – in its first year (1999) it ticketed the Crusaders/Highlanders final which was in the mid 30,000s.

Cloud computing is also on the cards, sought-after for its low costs for promoters and ticket purchasers. Ticket Direct’s model rewards customers for doing the work themselves – customers pay less when they book online and print their own tickets. Astoundingly, Ticket Direct was the first company to do ‘print-your-own’ tickets.

While the numerous Davids seem to have good aim, Goliath doesn’t look like falling any time soon. Ticketek is part of Australian-owned Nine Entertainment Co, while Ticketmaster is a conglomerate, with a monopoly in the US.

Both have serious clout behind them and between them they have contracts with a depressing 75 percent of the venues in New Zealand. To get exclusive ticketing rights, these companies often pay the venue owners ‘key money’, which they recoup through high booking fees on tickets. They can also fall back on their established ticketing infrastructure and the fact that promoters are well aware of the power of their brand.

Ticketmaster and Ticketek wouldn't comment on the competition for this story, but incremental changes in some of their fees suggest they are slowly heeding the cry of the consumer.

However, the promoter and the venue will continue to come first for these two industry leaders.

“They don't care about their customers and they don't have to care,” Schembri says. “They just worry about securing venues, and then the consumer has no choice if they want to attend a certain event.”

The big players won’t let go of those contracts without a fight.

Thompson says the plethora of smaller ticketing agencies will experience a market ‘shake-down’ in which the torrent of events that have come through Australia and New Zealand in the past couple of years dries up as the recession starts to make its mark.

However, the local music and event scene should continue to burgeon, which will suit the three upstarts much more than it will suit Ticketek and Ticketmaster.

1-Night is leading the way in innovation and technology and all three companies offer a lower cost model for promoters and venues. Inch by inch they are proving their utility.

There’s a lot going on in the ticketing world; an oligarchy is now on the cards. Markets tend to ensure duopolies don’t last forever.