The difficulty of getting tickets to Bruce Springsteen's Broadway performances gets all the attention, but the real problem in the concert business is unsold seats. About 40 percent of tickets don't sell, according to industry estimates, which represents $2 billion in lost revenue for performers and promoters. And at least some of them would have sold if more fans knew about the show.
"Our mission is to help artists sell tickets," says Bandsintown co-managing partner Fabrice Sergent. "We want to focus on helping artists by getting more fans to go see more live music."
Sergent, 46, is a serial entrepreneur with a personal mission to utilize the internet to foster the spread of information. In the 1990s, he started one of the first internet service providers (ISP) in France because he believed that the Holocaust -- in which some of his family perished -- might have been avoided if the -internet had existed at the time. "The U.S. population would have been much more broadly aware of what was going on," he says, "and may have pushed governments to react earlier to stop it."
Sergent moved to the United States a decade ago, and in 2011 bought the three-person company Bandsintown -- which at the time existed as a Facebook app -- with his friend and fellow co-managing partner Julien Mitelberg, 45. Together, they envisioned their company as "Fandango for concerts," which would better connect artists and fans. Bandsintown is now profitable, with 80 employees in Los Angeles, Long Island, San Diego, Montreal and at a friendly open office in a workspace full of startups near Herald Square in Manhattan. Users can sign up to "track" bands and get notifications of upcoming concerts, as well as recommendations for shows by similar artists they might enjoy.
The company makes the majority of its money through advertising, from both brands that want to reach music fans and promoters that want to boost ticket sales, and in many cases it collects revenue when users click directly from their site to a ticket seller. Bandsintown doesn't link to "secondary ticketing" sites like StubHub unless acts approve. It now includes artist pages from over 425,000 touring acts, which can message users who follow them at no cost -- a feature Sergent and Mitelberg added this summer. "We try to approach ideas in terms of, how do we fix this problem?" says Mitelberg. "In this case, we had our own problem to fix -- we kept missing bands."
You two have started companies together before this: French ISP Club-Internet, digital ad agency Le Studio, event listings company Plurimedia and app publisher Cellfish Media. How did you get into the concert business?
Sergent: There's a huge need to distribute tour dates to the broadest audience possible, so Bandsintown sends out about 100 million concert notifications each month via emails and app notifications. We send relevant alerts to fans who don't want to miss a show, and about 60 percent of the concerts promoted in those alerts are for artists fans don't know about, which we recommend.
Who is your audience?
Sergent: We have 37 million fans, and it's the most desirable audience you can imagine -- millennials who are interested in music and like to go out. So we get a very rich CPM [cost per thousand ad impressions]. Because we're so focused on live music, we think we reach the core fans of an artist. Overall, each month we send 9 million clicks to ticketing companies, and we send 2 million individuals to concerts.
Mitelberg: We also sell advertising to brands doing marketing around concerts. If you look at that market, it's growing very fast, but it's still smaller than the sponsorship market for sports, and we think that's a growth area.
You recommend concerts based on user taste profiles, right?
Mitelberg: Yes. Most of our users allow us to access information about their taste in music, from Spotify and Facebook and other platforms.
Sergent: About half of our users go to shows of artists they hadn't previously heard of. We have 15 people in Montreal working on that data, and once you have a level of confidence in the recommendations, they become fun to follow.
You made some significant updates to the service this summer, including allowing artists to create their own pages and message their fans.
Mitelberg: That idea came out of meetings with management companies. They said, "I have 200,000 fans tracking this act. How can I talk to them?" We said, "We'll send them tour dates," and they said, "If they RSVP to the show, I want to connect with them, talk to them, tell them they have 10 percent off at the merch table."
Sergent: Messaging is free [from artists to active followers]. We contribute value to the artists and we extract value from the industry -- promoters and ticketing companies. We made a choice to follow the guidance of artists when it comes to primary ticketing; if a show is sold out, we'll suggest a secondary alternative, but only if it's OK with the artist.
Songkick, whose concert discovery app was sold to Warner Music Group in July, is in a similar business, and Pandora has a program to let artists message fans. What sets you apart?
Mitelberg: I don't think those services gave partners as much information to act on. We don't say, "Here's the data." We give you tools to send messages about a new album or a tour.
Sergent: This is also a tool for artist discovery. We're launching a new program, "Big Break," where we'll select 50 artists and give them six months to go from 500 to 5,000 trackers. We want them to be serious about touring, and we'll promote them at trade shows.
You're both big music fans, but you're also both in your mid-40s, so I assume you're not going out every night. Do you use the app yourselves?
Sergent: We both love electronic music, especially "French touch" [a style of house music popular in France], and ... we just went to see these two DJs, Adam Port and &ME. I had been tracking them on Bandsintown, and I got a notification that they were performing in Brooklyn, at Sugar Hill in Bed-Stuy. So we went out there together.
What's the difference between starting a company in the United States as opposed to France?
Sergent: It's easier to have the ambition to change the world here -- the size of the market, in terms of consumers and partners, is very inspiring. Europe has a dynamic startup ecosystem, but I enjoy the ability of America to think big and be open. There's a reason why this country produces so many game-changing companies.
You've had success building and selling companies. Is that the plan?
Sergent: With the organic growth we're seeing, we believe we'll have 100 million users by 2020. We're not looking to exit -- we're looking to build a great company.
Have you seen any changes in your users' behavior since the attack at the Route 91 Harvest festival in Las Vegas?
Sergent: We haven't seen any change. We believe that live music brings people together and creates happiness and tolerance, so the best way to pay tribute to the victims of such horrible acts is to continue to promote life.