FlipTix's early success at reselling tickets has caught the eye of the venue industry.
FlipTix's plan to create a tertiary ticket platform to flip tickets midevent is out of the startup stage and already challenging the notion that suddenly empty space can't be resold.
“We are in a unique market in which no one else is providing the service of flipping the remaining time on events when someone has left early,” said Jaime Siegel, co-founder and CEO of FlipTix, which he and his brother founded in 2016. “We partner with promoters and venues to take advantage of the vacant seat when they do.”
“Market research has shown that 30 percent of fans leave an event early,” he said. “People leave events prematurely for a number of reasons. We're here to monetize that empty space. Our average transaction time, from the time we posted a ticket available to the time it's rebought, was 16 seconds at our first event, so clearly there was a void in the marketplace.”
Siegel is quick to point out that “we are not a secondary market player. We're creating a new market. We bring value to fans and bring accretive revenue to promoters and venues.”
Since June, when the platform went live, FlipTix has had thousands of downloads of its app and the service has been available at more than 50 events, including San Diego’s Kaaboo festival, which drew tens of thousands of attendees to Del Mar Racetrack and fairgrounds in September, and over 40 shows at BLK Live, a concert venue in Scottsdale, Ariz.
“One percent of the attendees preregistered to flip their tickets at Kaaboo,” Siegel said. “The participation exceeded our expectations.”
FlipTix also has a deal with Stage Left Entertainment, the primary booker for the Orlando Amphitheatre, a 10,000-capacity venue at the Central Florida Fairgrounds, and has filed 16 patents in the U.S., China and Australia. Siegel used to be a patent lawyer and spent 16 years as Sony’s vice president of intellectual property.
The company has also secured $1.1 million in seed round funding, partnered with neighborhood mapping service MapVida and live touring production support company Clair Global to develop and enhance user experiences, and opened offices in Orange County and San Francisco.
The system works like this: Sellers register with an account and payout method on the app. When leaving an event early, sellers indicate to FlipTix electronically that they are leaving, and the space can be resold. At certain events, such as festivals, sellers may be required to stop by the FlipTix booth and turn in their wristband.
Buyers register as well and are notified on the app once tickets are available.
Pricing of the ticket is determined by an algorithm that works on a dynamic pricing model.
“Usually, we price the ticket on a declining-time scale,” Siegel said. “If half of the time is left, we cut the original price in half.”
Prices are also based on weather, demand or lack of it, popularity, location, and other factors. Typically, prices will decline as the day goes on.
Sellers remuneration package could be anything from cash to gift cards to T-shirts to a discount on another ticketing package.
What the seller gets back varies event-to-event,” Siegel said. “Ultimately the people who are leaving have no expectation they will get anything back. It's found value.”
FlipTix gets “a revenue share” from every ticket sold, Siegel said.
Flipping a ticket midway also drives another important revenue stream— per caps.
“Every new person that goes in is a new person to sell concessions and merchandise,” he said.
Siegel says deal with major ticketing companies are about to be announced. “We should be announcing the integration deals within 30 to 60 days,” he said.
Post Kaaboo, FlipTix has signed a letter of intent for the Kaaboo Texas, which will go on for the first time this year May 10-12 at AT&T Stadium in Arlington, and the Kaaboo chief financial officer has joined the FlipTix Advisory Board. “I personally think that's a great testament to our value,” Siegel said.
FlipTix's main focus right now is growth of brand awareness and marketing.
“We did the Kaaboo event with no marketing help from the organizers at all,” Siegel said. “With a little push we'll get people to see we're incentivizing every participant in the ecosystem.”