(taken from Venues Today October 2009 edition)
On The Offensive
Ticketing companies get aggressive for regional business.
By Dave Brooks
History has a funny way of repeating itself. In 2002 when Daren Libonati and his group at the University of Nevada, Las Vegas, launched their own in-house ticketing system, many wondered if the Paciolan-powered platform could hold its own against uber-robust Ticketmaster.
Fast forward to 2009, and Libonati is again asking if the provider is up for the job. Despite nearly seven years of impeccable functionality in a building that consistently ranks among the top 10-grossing facilities worldwide, changes in the marketplace have put another question mark around the Irvine, Calif.-based company.
After being purchased by Ticketmaster in 2007, Paciolan has changed its name (it’s now Ticketmaster Irvine) and slowed the development of its enablement software system, directing its engineers to focus their attention on the newest version of Ticketmaster’s Archtix platform; a potentially powerful, but largely unknown application, said former Paciolan Chairman Jane Kleinberger, now the executive VP of College Athletics for Ticketmaster. But what Archtix lacks in details, it makes up for with marketing punch. Ticketmaster has one of the largest consumer databases in the world.
“We love our distributor clients and continue to want to re-earn their business,” Kleinberger said. “We understand that some might not be comfortable with the Ticketmaster acquisition, but we’re here to help our partner venues with whatever they decide.”
While the Paciolan legacy system still dominates the regional market, the momentum seems to be behind Cleveland-based Veritix, which has scored two huge regional deals with the Denver Nuggets and the Utah Jazz. Not to be left out is Tickets.com, Major League Baseball’s ticketing wing that hired a former Paciolan executive to help Veritix develop its own regional business plan.
And that’s perhaps where history diverges. Where there once stood only one leader, now stand several.
“For us, we’ve come to the end of our seven years and we owe it to ourselves to evaluate and do our own due diligence on what else is out there,” said Libonati, who began accepting bids for his system in October and hopes to award a contract by the new year.
REBEL NO MORE
Libonati partnered with Paciolan in 2002 for one of the company’s first regional ticketing projects. The contract would cover the Thomas and Mack Center, a collegiate arena home to Rebels basketball and some of the biggest events in Sin City.
The move also allowed UNLV to collect its own consumer data and more importantly, the creation of UNLVtickets shifted the revenue models for both the venue and the ticketing company, he said.
“Vendors that go after the regional ticketing companies have to employ a different model, such as low flat transaction fees or annual subscriptions,” said Steve Demots of Tickets.com, a former Paciolan executive who has made regional ticketing contracts a top sales priority for its ProVenue platform.
Of course there are tradeoffs. Promoters are familiar with Ticketmaster’s reporting system and few can challenge the company’s marketing database. Not signing a full-service ticketing deal could also leave doubts about one’s throughput capabilities and whether their system could handle 20,000-40,000 transactions in a matter of seconds.
When the Utah Jazz’s 10-year-old ticketing contract with Ticketmaster expired earlier this year, Dee Dee Hill found herself in an odd position. Her regional Salt Lake City ticketing company Datatix had previously held the Jazz’s ticketing contract, and she desperately wanted them back.
“When I was with Paciolan, I could have gone to them and said, ‘Hey, let’s work on getting this client. Paciolan would have sent their sales force out and we would have gone to meet with the Jazz,’” she recalled. “When Ticketmaster bought Paciolan, I couldn’t call the Ticketmaster office and say, ‘Hey, I’m going to be bidding against you.’”
Using Ticketmaster software while competing against the company is nothing new. TicketAlternative, a regional ticketing group out of Atlanta, powers its platform with Paciolan. That hasn’t stopped the startup from going after Ticketmaster’s clients; in September, TicketAlternative signed over the Black Cat night club in Washington, D.C., a former longtime Ticketmaster client.
In Salt Lake, Hill needed a strong technology partner to make her pitch to the Jazz attractive, so she turned to Veritix, which already had ticketing deals with the Cleveland Cavaliers and the Houston Rockets. Working with Veritix CEO Jeff Kline, Hill developed a sales pitch that had Datatix branding and marketing the platform, while Veritix provided the backend technological support and retained exclusive rights to the team’s secondary market through its Flash Seats platform.
It’s the second such move for Veritix; the company recently signed a deal with the Denver Nuggets and owner Kroenke Sports and Entertainment, which partnered with Veritix to power the TicketHorse system for the Pepsi Center, Infinity Park, Dick’s Sporting Goods Park and the Paramount Theater, all in the Denver area.
“We started thinking about doing our own ticketing because with that much volume, you could afford the infrastructure that would be required, and the investment levels,” said Paul Andrews, director of Kroenke Sports and Entertainment. “We should be able to staff and run a pretty efficient ticketing operation for what we we’re paying a third-party vendor.”
BACK TO THE FUTURE?
Still, many regional operators taking a wait-and-see approach to how the market develops.
“We’re not hitting any type of panic button,” said Jack Lucas of TicketsWest, one of the country’s oldest regional ticketing companies, currently operating on the Paciolan platform.
Next year could provide a much better picture of where innovation in the enablement model lies. Ticketmaster will launch the latest version of its Archtix platform, which takes software updates originally slated for the Paciolan system and combines them with updates from Ticketmaster. It will also allow Archtix users to list their events on Ticketmaster.com and take advantage of the company’s huge marketing database.
“It makes more sense in the long run to have one superior platform rather than two,” Kleinberger said,
Tickets.com is also working on developing its own updates to its ProVenue suite to make it more suited to the regional model. Demots said he wants to develop the ability for any venue client within a regional model to put their own events on sale; most regional clients rely on a central administrator to update the system.
Meanwhile, many regional ticketing companies are content to sit back and wait to see what goes to market in the next 12-24 months
Who makes the next move is anyone’s guess, although many eyes are on New Era tickets, the Comcast-Spectacor owned ticketing company. The group recently put out a bid for its ticketing system — since 2004, the platform has been powered by Paciolan.
“All of the regionals talk with each other, and I think a few of us plan to wait and see what New Era does,” said Iain Bluett, Ticket Alternative cofounder. “We’re not in any big hurry, except we’re always worried about keeping up with the latest technology and not getting left behind.”
Interviewed for this story: Daren Libonati, (702) 895-3727; Jane Kleinberger, (949) 823-1679; Steve Demots, (714) 327-5550; Dee Dee Hill, (801) 467-1055; Jamie Dwyer, (404) 897-2371; Jeff Kline, (216) 466-8055; Paul Andrews, (303) 405-1133; Fred Maglione, (610) 854-1100; Iain Bluett, (404) 897-2379