StubHub: The Complicated World of Reselling Tickets
Aug 5, 2024
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Tati Cirisano, an expert from MIDiA Research, dives deep into the complex world of StubHub, revealing its intriguing 25-year history. They discuss the platform's influence on the ticket resale market and its challenges, including legal battles with the New England Patriots and the ethical dilemmas of pricing. The chat highlights StubHub’s current IPO ambitions versus market realities and explores the regulatory hurdles facing the industry. It's a rollercoaster of insights on ticketing and fan experiences!
StubHub emerged from founders' frustrations with ticket resale, aiming for a safer buying and selling platform while facing regulatory challenges.
The rise of professional resellers distorts the ticket market, complicating demand assessment for musicians and prompting ongoing debates about market fairness.
Deep dives
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The Story and Challenges of StubHub
StubHub originated from co-founders Eric Baker and Jeff Fleur's frustrations with the ticket resale market, aiming to create a safer platform for buying and selling tickets. Initially compared to eBay, the platform grew rapidly, but it faced regulatory issues and tensions between the founders over company direction and leadership. The transition from a startup to a subsidiary of eBay highlights the evolving ticketing landscape, as StubHub navigated legal challenges while balancing its relationship with Ticketmaster and other primary sellers. Key factors influencing its growth included a commission-based model and a unique marketplace approach, which ultimately contributed to both its success and the complexities surrounding ticket resale.
Legal Challenges and the Effect of Regulation
StubHub's operation faced significant legal challenges, particularly from organizations like the New England Patriots, which sued for creating an environment that allegedly encouraged ticket scalping. StubHub countered these claims, arguing that they merely provide a marketplace and should not be held accountable for users' actions. Legal frameworks surrounding ticket resale have evolved, with recent legislation mandating all-in pricing to increase transparency for consumers. As regulatory scrutiny increases, StubHub's position within the ticketing landscape may be further complicated, as courts have held that platforms may be liable due to their profit from higher resale prices.
The Evolving Ticket Market Landscape
The rise of professional resellers, often referred to as touts in the UK, has distorted the traditional ticket market, with these entities buying tickets in bulk and reselling them at inflated prices. This creates challenges for musicians and event promoters by skewing demand and making it difficult to accurately gauge consumer interest. The ongoing debates around the responsibility and pricing strategies of ticket resale platforms like StubHub illustrate a broader conversation on market fairness and access. With changes in technology and consumer behavior, the industry is adapting; platforms are increasingly pressured to innovate while facing growing demands for regulation and accountability.
StubHub has IPO plans this year, so it was the perfect time to breakdown the complicated, controversial, and crazy story of this ticket resale marketplace. We discuss its 25-year history, M&A, impact on the live concert business, and ways to improve the secondary ticketing experience for fans.
I'm joined by Tati Cirisano from MIDiA Research. Hope you enjoy!