London-based Viagogo, an online marketplace for event tickets, is invading the U.S. market. It’s a European version of StubHub, which sold to eBay for $307 million back in January.
The site was founded by Eric Baker, one of StubHub’s founders, and launched in 2005 after a falling out with the company. Baker is now returning to the US market to take on StubHub, with a fresh $30 million coming from a series C round led by Index Ventures. Other participating investors included LVMH Chairman Bernard Arnault, German media mogul Dr. Herbert Kloiber, and international financier Lord Jacob Rothschild. The company has a total of $50 million in financing.
For their US launch, they’ve closed a deal with the Cleaveland Browns to be the official secondary ticket provider. The deal, however, comes on the heels of StubHub’s larger exclusive deal to be the MLB’s official online ticket resale marketplace.
Viagogo still has a larger presence in Europe, making exclusive ticketing deals with a number of Europe’s top teams, including Manchester United, Chelsea Football Club and Bayern Munich. Baker’s previous experience at Viagogo seems to be helping. The company claims to be generating more revenue in June, its tenth month in operation, than StubHub did in its first 15 months combined.
Viagogo makes money by adding a 10 percent service charge to ticket prices for buyers and takes a 15 percent service charge to sellers. So, a ticket listed for $100 costs a buyer $110, with $85 going to the seller. StubHub follows the same pricing structure.
Wow – they get you coming and going. Those fees seem crazy high.
I might be lame but I will never get why I can sell a ticket for $20,000 on this site, but scalp it outside the arena and I go to jail.
nick,
any details about the ‘falling out’ between eric baker and stubhub?
Another interesting company in this space in Europe is seatwave, http://www.seatwave.com, started by CitySearch and Match.com founders. I prefer their online experience, and the social-net oriented approach. They’re on to something fresh…
From a UK football supporters point of view, I can categorically say that viagogo are HATED. The fees are totally unjustifiable and fans are outraged that our clubs are signing up – it’s just another big money making scheme along with the huge pay-per-view TV fees; milking loyal fans for all they’re worth.
Search any of the official club forums for viagogo and you won’t find a word of praise – quite the opposite. I hope this company disappears off the face of the planet, and there are thousands like me who feel the same way.
i second what mike @ 4 said.
these guys, stubhub, ticketmaster, etc can all go fu*k themselves – it’s ridiculous the way they gauge us.
i love how there’s a $10 “convenience charge” because i buy tickets online instead of going to the stadium.
tickets – the only thing that end up costing MORE when you buy them online.
i would love to see a new player in this space that eliminates these bs inefficiencies and actually gets you tickets at face value. why should i have to pay a middleman?
You shouldn’t have to pay the middle man. If you want tickets at face value, get your ass out of bed, and be on the computer the second they go on sale. However, if you don’t want to be inconvenienced, have the money to pay for the best of the best seats, or simply werent as quick as others on the direct-sale site, head over to http://www.ticketgold.com and grab yourself a pair!
like stubhub and its ilk, the prices are so inflated you can get a far better deal by meeting someone off craigslist near the field two hours before gametime…
Stubhub proved that there are $307M reasons why there will be more and more middle men in secondary market for tickets. Most people for whatever reason will not get their ass out of bed as soon as tickets go on sale, nor will they stand in line waiting.
Love them or hate them, the secondary market is a thriving industry.
kent – there is a belief that not all of the tickets are open for those that get out of bed.
Here is why they can charge the prices they do – because the sellers don’t care about the fees. Buy a ticket for $100, sell it for $1000, who cares if they take 10%.
“It sounds extraordinary but it’s a fact that balance sheets can make fascinating reading. ”
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@Allen #1. If the transaction takes place on servers that are located in a place where ticket scalping is legal (like California) it’s “ok”. Bottom line is unless ticket prices actually reflect the market price (which will never happen) the secondary ticket market will flourish
The interesting thing about StubHub (I think this is true) is that some of their tickets are actually tickets on the secondary ticket market, so they are getting marked up twice
@ DanM – #12
Both StubHub and Viagogo are secondary ticket marketplaces. Secondary tickets are the only tickets they have.
Wouldn’t it be cool if a bunch of Y Combinator hacktards launched a social network based on LISP to enable you to trade tickets for free? Who needs to make money after all?
@ Mike #4 and gilltots #5
Secondary ticket marketplaces like StubHub and Viagogo are actually the way teams, musicians etc. should sell tickets. Both use an auction/bartering system that finds the true value.
Sports teams and bands usually play in venues that don’t fit all of their fans. So, somebody is always going to have to pay more than face value to get in. Maybe teams should build bigger stadiums.
If teams, bands and venues sold their ticket directly to fans using an auction/bartering system, like StubHub and Viagogo, it would weed out most secondary price inflation (but never all of it).
It’s true that Stubhub and Viagogo take enormous charges for such a simple marketplace platform. The reason is because mainstream ticket buyers don’t trust barebones marketplaces like Craiglist. The direct buyer-to-seller communication is amateur and creeps them out.
True, the mark-up inflates the price of tickets esp. football ones but as long as there is a market these companies will continue to sell those tickets and flourish.
@ Andrew #15
Yes, it’s true that secondary market auctions will effectively police themselves in terms of cost, but the problem we have with viagogo here in the UK is that the ONLY official way to sell/buy secondhand tickets for the signed-up clubs is through their service.
Some background: the UK football ticket system for the major clubs is very locked down. You need to be a member of the official supporters’ club and you are given a very strict allocation on tickets. Say I have a season ticket and can’t make a match due to holiday or whatever; I’m not allowed to simply hand my ticket to a friend to attend in my place, because they’ll fail the photo ID entry at the stadium. My ONLY option is to try and sell the ticket on viagogo, so I lose out on seller fees and the buyer loses out on buyer fees – viagogo wins because of their monopoly position.
This is what we’re totally against – it’s a lose/lose situation for the fans.
From a different point-of-view, I wonder why viagogo need $50M to set this up? They’re only a dozen or so programmers in a crappy office in west London and have the StubHub code to start from. My cynical side tells me it’s payment to the clubs to allow this monopoly – I’d be interested to know if this isn’t the case!
This is interesting reading, I have sympathies for the reselling market as I bought Prince tickets recently, sold out everywhere else, paid a little over the odds but it was worth it.
Also bought some Police tickets recently, they were going for silly prices on some sites, but still available on ticketmaster, I only found this out when I saw a site http://www.tickex.com/ which listed all tickets from both resellers and ticketmaster. It is nice to see someone do something about price comparison. As Mike says the market will police itself.
Andrew @ 15 – i guess i am talking about face value. i wouldn’t ever buy a ticket to anything at the inflated second market price but i can understand why it exists…
i buy tickets on places like ticketmaster the moment they go on sale. and then i still get charged like $15-20 per ticket in fees for that on top of the actual ticket price. what i’m saying is that the arenas/teams/artists/etc would be able to make more money per ticket, and the consumer could be charged less per ticket, by cutting out the stupid middle man! or at least replacing him with a less-greedy middle man. same goes for the secondary markets. it’s a scam i tell ya!
and techdumpster @14 they should write it in erlang
“Cleaveland” Browns? Where is your editor… how about “Cleveland” Browns.
I love that no one takes issue with the selling of a second hand cheese sandwich that looks like the virgin mary for $200 on eBay but there seems to be huge controversy over the second hand selling of tickets on sites like viagogo…at least the tickets are guaranteed (the sandwich turned out to be a scam, damn!)….
I’m a One United member and have got some great seats through viagogo. I missed out on the ballot and probalby wouldn’t have got to the game otherwise.
Craigslist is the answer. No ridiculous fees. I’m tired of paying $10-20/ticket to Ticketmaster for a ticket. The Internet should have reduced or eliminated “convenience” fees. Clearly, Ticketmaster is using their monopoly to keep these fees at ridiculous levels.
I would cheer for StubHub to change this, but I’m sure their fees will grow as their market share grows.
The Cleveland Cavaliers are trying to fight the system by getting their own system online. http://biz.yaho...m130.html?.v=21
The secondary market has always been a big issue for events, especially since musicians, stadium owners, promoters, etc have never felt that they should take all the risk while other people make the $$s.
In the Condo market brokers will sell pieces of the project off in tranches to control the selling price – including “pre-sale” sales only open to a small group of investors types. Generally a condo project will never really be “sold out” – they keep a bunch of units to flip at the maximum possible market price once the project is finished and people are moving in. Thus maximizing profits. The Ticket industry would love to do the same but it is much harder for them to hide who owns and who is selling the blocks of tickets.
@ R.J. Pittman #3
@ Tom #18
Let me guess what companies you guys are invested in.
As a follow up to this news, I went and did some digging around and wrote a more detailed post about Viagogo. I found it pretty interesting that one of their investors works for eBay, curious about your thoughts: http://bigideas...to–1.html
stubhub.com is currently the best of all ticket marketplaces on the net, though a big concurency arises recently from sites like ticketsnow, barrystickets, ticketsolutions and etc.
Hope you dont mind, I copied your article at http://www.betting-forum.com/
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