A ticketing startup that hopes to offer an alternative to the high-charging incumbents has launched its new cloud-based service this week - and is just closing an over-subscribed US$2.5 million ($3.6m) Series A funding round.
Backers included Kiwi entrepreneur AJ Bertenshaw, the founder of DJ and music production company Serato, who has also come onboard as an adviser as the startup targets conferences, sports events, concerts and festivals in the US, Australia, the UK, India and NZ.
The Aucklander was joined by something of a stellar cast of co-investors, including Y Combinator, the famed Silicon Valley incubator that helped spawn the likes of Airbnb, Dropbox, Reddit and Twitch); YouTube co-founder Steve Chen, Twitch CEO Emmett Shear, Reddit boss Steve Huffman, and Beverly Hills-based entertainment lawyer Ken Hertz, whose clients include Will Smith, will.i.am, Gwen Stefani and Celine Dion.
It's a high-powered crew, but the task in front of them is huge: disrupting Ticketmaster, the ticketing giant that dominates in much of the world, particularly after it merged with its main rival Live Nation earlier this decade. Customers often complain that Ticketmaster, and big Australasian player Ticketek, us their dominance to inflate fees.
The invitation-only phase of the platform has sold more than 850,000 tickets to the general public, grossing $100 million, including a number of New Zealand festivals: Bay Dreams, One Love and Northern Bass).
For a single $89.90 standing area ticket to Jimmy Barnes' upcoming Auckland concert, Ticketmaster is charging a "processing fee" of $8 plus a "ticket fee" (including payment processing and a venue levy) of $4.82. For a single $151.75 to Michael Buble's upcoming Mission Estate Winery concert, Ticketek is charging a payment processing fee of 2.55 per cent (including for debit cards) and a combined service and delivery fee of between $5.25 and $13.00 depending on the ticket delivery method.
Consumer NZ says concert-goers could benefit from new player.
"Fees charged by the big ticket agents have been a regular cause of complaint," the watchdog's research head Jessica Willson says.
"The concentrated nature of our market means there's often no choice about where you can buy tickets for an event. That means there's little competitive pressure on ticket agents' fees and consumers can end up paying more than they otherwise would."
Ritesh Patel, who co-founded Ticket Fairy with his brother Jigar, says his company still has to add support for allocated seating - the key feature missing if it's to take on Ticketmaster. But he says it's close.
In the meantime, Ticket Fairy is catering for general admission events, from a 100-person pow-wow to an event designed to attract more than 50,000 punters.
Here, Ticket Fairy comes up against Eventbrite, a popular cloud-based service that's already well established.
Patel says their pricing is comparable. Eventbrite charges US$1.59 + 3.5% per ticket.
But the Ticket Fairy co-founder says Ticket Fairy has a much fuller suite of event-organising features than Eventbrite, has the edge on Eventbrite, covering every element from ticketing to marketing to check-ins, audience analytics, ticket insurance, finances and integration with radio frequency ID tags (RFIDS). It's big on real-time, user-friendly-looking dashboards that give you a view of how ticket sales, or an event is tracking once it's kicked off.
Patel also pushes what he bills as an anti-scalping feature: if someone no longer needs their ticket, Ticket Fairy provides them with an official resale market. It also has a wait-list feature for sold-out events.
It also supports a referral system that allows you to, say, extend a $250 30-day micro loan to an event goer to cover the cost of their ticket. The more friends they refer who buy tickets, the less of that loan they'll have to pay back. In fact, if they bug enough people via direct messages or social media links, they won't have to pay a cent.
Ticket Fairy's software lets an organiser track the top referrers and social media influencers or "micro-influencers" for an event, too.
During its soft-launch, which has involved events that have sold more than 850,000 tickets, about one-in-three concert goers has used the referral feature.
Patel claims Ticket Fairy has boosted revenue by 15 per cent to 25 per cent at festivals and dance parties where its system has been trialled. At any rate, the results have been good enough to get the aforementioned experienced investors onboard.
London-raised Ritesh Patel did a degree computer science degree at the University of Bristol in the UK and worked as a software developer for more than a decade before moving into the music event industry - where his brother Jigar, who trained as a sound engineer, followed.
Their startup, which had an currently has 35 staff - most at its headquarters in LA. With the capital raise and cloud platform launch, he sees that rising to 100 in a year or so.
His plan is to hit profitability within five years and list on the Nasdaq or NYSE within the same timeframe.
Bertenshaw is optimistic the venture will succeed, but also sees it as a long haul.
The incumbent ticketing players have deep relationships with concert promoters, he says - and in many cases multi-year contracts (a couple of big NZ concert promoters approached by the Herald were not in a hurry to get back with assessments of the incumbents, which could say something in itself).
Jigar Patel says Ticket Fairy's empathy with its clients will help.
"Coming from the event promotion background, we understand the risk event organisers take in creating these experiences," he says.
"The odds of breaking even are poor and many are unable to overcome those challenges, but it is sheer passion that keeps them going in the face of financial uncertainty and multi-year losses.
"The events industry is more important than ever, with artists making the bulk of their income from touring instead of record sales, and demand from fans for live experiences is increasing at a global level. When events go out of business, everybody loses, including artists and fans. Everything we do at Ticket Fairy has that firmly in mind - we are here to keep the ecosystem alive."