Amazon Entering Ticket Market
Wednesday, August 16, 2017
by Brad Weissberg | Venues Today
Despite reports, insiders say Amazon wants partners not competitors
Amazon is entering the U.S. ticket market. Despite reports that say the e-commerce giant is clearing the path to disrupt and take over the lucrative business of ticketing, pushing out industry leaders like Ticketmaster, Venues Today has learned that Amazon’s plan is to actually partner with the established ticketers.
Amazon has mowed down other business models since it showed up using its massive customer base and deep pockets to disrupt everything from books to groceries to music-on-demand and TV streaming. A move into the ticketing industry, where they build their own platform and make deals with venues, would be a mighty threat to the Ticketmasters of this world.
“What Amazon plans to do is not what has been leaked out,” said a source close to the situation. “Amazon is not trying to lure venues and teams away from Ticketmaster.”
What they plan to do, according to our source, is partner with ticketing companies.
“Amazon is currently making deals with ticket platforms to get inventory,” said our insider, who is not authorized to speak officially on Amazon deals. “They don’t want to get into the ticket industry; they want to add another perk to being a member of their Prime program.”
Amazon Prime sells for $99 a year. For that fee customers get free two-day shipping on all items, access to Amazon Prime TV streaming, Prime music streaming and other perks.
Amazon also has grand plans to bundle tickets with other merchandise. “Imagine you are buying a ticket to a Taylor Swift concert,” explained our source. “They will then offer you Taylor Swift T-shirts, jackets, sweatshirts, keyrings and CD’s.”
As the talks have been progressing, the sticking point seems to be, as it always is, who owns the data. “Amazon is unwilling to share their data with any of their partners, which is a potential dealbreaker,” according to our source. “Ticketmaster won’t budge on this, either. If Amazon and the ticketing companies can’t come to an agreement over who owns the data, the deals won’t happen.”
An eventual deal fits in with a recent move by Ticketmaster to open up its platform to secondary sites like Gametime and Costco. Rival AXS tickets has followed Ticketmaster’s blueprint and has made deals with Gametime, Costco, Groupon and Goldstar.
“The shoe has dropped; here they are,” said Maureen Andersen, president and CEO, INTIX. “But nothing's happened yet, and the longer they have the data question in the air, the longer it will take for something to materialize. Everybody in the industry admits that data is king. Exclusivity on either side is unrealistic. Venues are not going to give up the ability to market to their customers.”
If the data issues can be worked out, Andersen thinks Amazon is the perfect player for this industry. “They go directly to the consumer,” she said, “and that will disrupt the industry, which hasn’t had a seismic shift in a long time.”
Andresen likens Amazon’s entry into the arena to when online ticketing became the preferred way to get tickets into customers’ hands. “Competition is good and will breed innovation and excellence across the board. Everyone will have to step-up.”
One of the major hurdles facing existing ticketing companies will be fees. “Amazon hides their fees in the Prime membership package,” said Andersen. “Whether the other companies will drop their fees to compete remains to be seen.”
Andersen predicts that in the near future, tickets will be sold on Expedia-like websites that are solely devoted to tickets. “Fans will see all the places they can buy the same ticket, at the various prices and choose, just like they do now with airfares and hotel rooms.”
“Airlines figured it out; banking and ATM’s figured it out and ticketing will figure it out,” she said. “If you can use points on a certain site, fans will go there. If I can bundle the ticket with something else I want on a certain site, I’ll go there. We’re in the age of choice, the ticketing industry needs to catch up.”
Amazon is already selling tickets in the U.K. and it's expected their U.S. ticketing system will be split into three tiers just as it does in Europe. Prime Tickets will allocate tickets to Prime members. Prime Experiences will give Prime users access to special events arranged by outside entities. Prime Events will invite Prime members to private concerts as they did in London with Blondie at the 750-capacity Round Chapel in Hackney, London.
Former Warner Music Group VP Lawrence Peryer is heading the ticketing push for Amazon.
Under the distribution-only model, Amazon will make a nice profit, according to Brandon Ross, an analyst at research firm BTIG. “Building their own software will take a fortune while simply partnering will require much less capital and get Amazon what they really want, which is more Prime members,” he said. “It’s all about Prime for Amazon. The reason they are spending multiple billions of dollars a year on programming is to get more Prime subscribers and engage more consumers."