In recent weeks, online ticketing has seen a surge in interest and funding. Los Angeles-based SaveFans (www.savefans.com) recently raised some funding for its take on secondary ticketing, so we thought we'd speak with founder Wes Brodsky about the company and where it's going.
Describe SaveFans and what it does?
Wes Brodsky: SaveFans is a negotiation model for the ticketing space. We are an offer-based platform that allows users to negotiate the price they buy and sell tickets for, on the secondary market. The easiest way to think about it is that we're like the Priceline for the secondary ticket market. It's Priceline meets Stubhub.
Educate us, and explain what's different about how you are handling ticket sales and how that's different from the many others out there?
Wes Brodsky: The ticketing industry, since its inception, has been on a fixed price model. On the primary side, when you're talking about Ticketmaster or Tickets.com, or the box office, they usually price seats by bundling them into price groups. For example, at an event, say at the Staples Center, of the 20,000 seats they might have four or five price groups. That's not an efficient way to sell tickets. For example, at a concert, they sell the front row -- which is clearly worth more -- the same as the cost of the 50th row. What ends up happening in the secondary market, is that resellers might buy tickets for row 1 and sell them for a big percentage over face value--but, row 50 may never sell. That's a completely inefficient way to price tickets. Plus, even when they do sell a ticket on the secondary market it's usually for a specific price. There is no real room for negotiation, or to let demand drive the pricing on the buyer side. That's where we come in. We allow buyers to make offers to sellers.
How did you get into this business?
Wes Brodsky: When I was in high school, I used to wait in line for a big ticket broker here in Los Angeles. When I graduated from UCLA in 1999, I started working for an accounting firm. I was playing around on eBay one day, looking to buy tickets to a Lakers game. I saw that the ticket was selling for quite a large amount over face value. Knowing how to buy tickets, I decided one weekend to go down to Tower Records, scoop up some extra tickets, and resell them. I scaled that business, and had all of my friends and relatives waiting in line to buy tickets, which I could resell on eBay. I ended up growing to the point of being the top, individual seller of tickets on eBay and PayPal. I ended up switching to selling on Stubhub in 2007, after eBay made it much more difficult to search for tickets. It was not a pleasant experience for sellers, so I switched over to StubHub. It ends up, our margins went way up. The reason why, is the StubHub did a good job legitimizing secondary sale of tickets. So, we had the idea to combine the different aspects of bidding negotiation from eBay, creating an efficient wy to sell tickets, and also having the structure of StubHub, with their different guarantees and ways that makes discovery of tickets easier.
Why haven't the big ticketing players done something here-- you think they would have seen this a long time ago?
Wed Brodsky: It's not a matter of not knowing. If you understand the primary side, it's not necessarily Ticketmaster that is setting prices, or bearing the risk on the sale. If you imagine, a promoter might manage Britney Spears in 50 cities, and all those cities have different demand and price points. They might need to sell 20,000 tickets, and they can't bear the risk of trying to price every single ticket individually at market value. They basically know how many tickets they need to sell, to cover their guarantee at the gate, and go off that. It's no different than the automobile industry, where even though a manufacturer has retail channels, BMW sells their autos lower that what consumers will pay, which allows dealers to bear a lot of the risk. It looks the same in ticketing.
You mention trust and guarantees, how do you handle that?
Wes Brodsky: One of the benefits of having competition, is that the Stubhubs, Tickets.com, and Razorgator's have all solved that problem. We do the same verification that they do, which is we require sellers to register a credit card, in case we get a call from a buyer telling us that they can't get into an event. We also have a verification process with the venues, to track that tickets were scanned.
You recently landed a funding round, what are you doing with that funding?
Wes Brodsky: We have been bootstrapped so for, and our service has been live for about 16 months. The company was formed in 2008. To get this cash infusion is really exciting, because it really helps us build out our product. What we are doing now, is we've re-imagined the whole site, its functionality, and made it more interactive and made it easier for users to navigate. It is now very, very customer friendly. We're also building out our platform, leveraging new technology like mobile and social technology. We've envisioned SaveFans as being a portal, and being portable. We're also making it easy so that other platforms and users can pull in our data, which allows them to leverage our ticket listings and sell products. We're really building and enhancing the service, and building out our technology..
Finally, in your opinion, why the sudden interest by everyone in ticketing?
Wes Brodsky: The concert industry has been down a lot in the last couple of years. But, what we've noticed, from activity on our site and sales--is it is getting very hot again. I think, with the economy turning around, and artists playing more shows, there is a lot more going on in this space. If you look specifically around people getting funded and all of the activity in the space, it's all around pricing components. I'm not surprised--this is something we've believed in for a long time, because there is so inefficient pricing. We're really excited to see the activity because its validates our model.