New Kid on the Block

FlashSeats.com and the Cleveland Cavaliers are trying to lead the way for a new ticketing concept. It is the paperless ticket.

Comparing themselves to the airline industry, they are saying "The paper ticket market is fundamentally inefficient and arcane, I don't think there's a role for that in the future.''

Here is the concept in summary

• Ask season ticket holders to accept the paperless ticket
• For each game, the ticket holder will swipe an “electronic identification card” (e.g. drivers license, credit card) for entry to the game
• If the ticket holder wishes to transfer the ticket to someone else, the ticket holder has to designate who will be attending in their stead
• If the ticket holder wants to sell the tickets, they can do so on the FlashSeat.com site. FlashSeats currently charges a 20% fee.
• Having FlashSeats.com control the transaction ensures the ticket is valid and not counterfeited.

This is an interesting idea. You have the see the where this is coming from. Sports teams are very aware that there is a huge secondary ticket market. (Do you think George Steinbrenner is happy to know that the ticket he sells for $50 go for $200 in the open market?) This is a $12 billion dollar market and they would like to keep that in house as much as possible.

FlashSeats.com could catch on. We see several problems with the business model and some of their concepts:

• Comparing Sports tickets to plane tickets is not quite the same. While plane tickets do transfer hands, it is not in the same percentage volume as sports tickets.
• Sports tickets have a memorabilia value to them. One of the biggest complaints amongst secondary ticket market buyers is that they receive an e-ticket (one printed out on a computer) instead of a regular ticket. There is a mental hurdle for many people.
• Many companies buy season tickets to hand out to clients. Now they would have to coordinate with the client and the team front office for the person to go. Before all they had to do was hand over the tickets. Now they have to work to hand them over.
• The corporate ticket gift often goes through many people. We have handed out hundreds of tickets and a minority of the time do the people we give them to actually go. They in turn hand them out to others.
• There is a resistance to have one’s “electronic identification card” read any more than it has to be. Imagine the outcry of people when they have to present their driver license to go to a game.
• Why would I want to pay 20% to have my ticket sold when I can already do it for less? The places I already do it invest heavily to drive traffic to their site. Does FlashSeats.com already have a $20M a year marketing budget?
• The systems to track the tickets would be expensive to develop, maintain and secure.

We cannot fault the team owners for wanting a piece of this market. If we were in their shoes, we would be asking the same thing. Will FlashSeats.com be the thing to do it? Probably not or at least not in its current form. For now it is something to watch. If it does not make an impact, something else could come around.

For more information see the following or just Google “flashseats.com”

http://www.sportsfanmagazine.com/sfm/articles.html?id=3200
http://www.delawareonline.com/apps/pbcs.dll/article?AID=/20070128/BUSINESS/701280331/1003
http://www.nba.com/nba_news/cavs_tickets_070125.html

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