Is There Money in Ticket Trading? Some Startups See Dollar Signs in Fan Exchanges
Scalping concert tickets has long been a common way to turn a profit. But is there a business in reselling tickets for face value?
Scalping concert tickets has long been a common way to turn a profit. But is there a business in reselling tickets for face value?
Some investors think so, and have poured millions into a variety of ticket-exchange startups, as consumer frustration mounts over quick concert sellouts and high prices on the secondary market. (Google announced on Feb. 7 that it will require resellers to be more transparent in their advertising.) To monetize the model, Twickets plans to charge face-value ticket buyers a 15 percent fee, while Lyte marks up refunded tickets but prices them well below the secondary market, undercutting scalpers and attracting interest from concert promoters who want to control their inventories.
“The sweet spot isn’t reselling the ticket for what the fan paid,” says Lyte founder Ant Taylor, “but driving the cost of a ticket as close to face value as possible.”
Brando Rich founded CashorTrade in 2009 to help fans of the band Phish who were getting priced out of buying tickets by bots and brokers for the group’s comeback tour.
“We started out trying to help Phish fans get tickets to a show at Hampton [Va.] Coliseum,” says Rich, “and now we have 140,000 registered users.”
Rich and his co-founders have now begun efforts of seed funding, hoping to raise $500,000 from two fundraising rounds, though they are still figuring out how to make money selling face-value seats. In 2013, they launched a $20-per-year Gold membership, which includes mobile notifications when new tickets are added to the site. The funds generated from the program help pay the firm’s small staff, but “it’s not enough to compete against billion-dollar corporations,” says Rich, who hopes to announce a new plan later in 2018.
This article originally appeared in the Feb. 17 issue of Billboard.
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