There’s been a tidal wave of mergers, acquisitions and partnerships in the ticketing world in the past few months. SeatGeek swallowed up TopTix. Eventbrite bought TicketFly from Pandora. Comcast Spectacor decided they didn’t want to be in the ticket business anymore and sold their ticketing division, Spectra Ticketing and Fan Engagement, to Learfield. Ticketmaster is partnering with GameTime.
What’s behind all the activity? Venues Today spoke with top industry players to find out.
“These things tend to move like clusters of earthquakes,” said Mark Meyerson, VP & GM, Live Music, Vendini. “Movement begets movement. What we’ve seen is a lot of startups that are interested in the startup culture, not necessarily the ticketing culture, that are looking to cash out.”
Meyerson believes companies that are highly leveraged and have been spending a lot of money are responsible for the latest wave of merger and acquisition (M&A) activity. “These startups have demands on what they need to do versus companies that have a solid base and a long history that are looking to innovate. They collide and that starts the wave that pulls things apart.”
Industry moves, investment, changes, sales and interest from private capital are all good things, said Meyerson. People are starting to see where it all can fit into a future version of ecommerce. “People are looking to get in and make bets on companies that lean forward. Some deals are just about market share. But it’s relative and market share deals are not about innovation.”
The big factors that are going to move our industry are solid, stable companies looking to innovate. The idea of vertical integration plays really well in the conference room, and the power-point looks awesome, but the gap between the presentation and the way people really live can be huge, he said.
Maureen Andersen, CEO, Intix, is a big fan of the M&A route. “We do this every three years,” said Andersen. “It refocuses the industry and sets it on a new track. It tells  everybody where we are now; where we’ve come from; what kind of new technology is out there to partner with and look for.”
Andersen said sometimes it’s to increase their marketshare; other times it’s merging with a company that has a piece of software; sometimes it’s someone who wants out.
She’s intrigued by the SeetGeek/TopTix partnership. “Here you have SeetGeek, a secondary market company acquiring TopTix, which is a primary. It’s a true melding of taking a primary and secondary and turning it into one company.”
Andersen is also a supporter of open API’s and finding partnerships that work. “Any company worth their salt is trying to figure out how to do this and be in front of it, if they are not going to lead it, at least they can be ready for it. This is where it’s all going,” she said. “We’re being driven by market trends that are outside of us. It’s the airline model, the hotel model, the Amazon model. The customer doesn’t care where they buy their ticket.”
Andersen said that ticketing is slightly different in that it has a shelf life with a beginning and end. “The widest way to get your inventory out to the public is probably the best way.” Andersen estimates that within three years open platforms will be a matter of fact. She also thinks the current M&A process in this wave is not over.
As for rumors that the National Football League is going to end their exclusive contract with Ticketmaster, Andersen thinks if true, it will be a toppling effect and the other leagues will follow suit. “We’ve all become entrenched in a business model that is outdated. They don’t do it this way overseas.”
Andersen’s crystal ball tells her there will be a few more big mergers and acquisitions before the next INTIX conference in January, which she believes makes the organization stronger. “Anything that changes and focuses the industry and makes things proactive for the customers is positive,” she said.
Andersen is most concerned for the larger ticketing companies that have been doing business the same way for a long time. “It’s challenging to the big players to try to figure out how to meet the challenges of the new world. It’s a matter of ‘how do we talk about a world where all share it’.” She’s also concerned with security. “Recent events have proved we all need to know who is in our buildings,” she said. “Physical space security and tracking people once they are in the building needs to be discussed at the same time.”
Andersen brought her thoughts home this way: “Mergers and acquisitions are really all about what’s working, what’s not working and what doesn’t work anymore. The smart people are asking those questions and making decisions based around that answer.”
“We’ve seen lots of consolidation waves,” said Matt Rosenberg, chief revenue officer, Eventbrite. “Whenever there’s a high degree of fragmentation, you tend to see consolidation happen at different points.”
Rosenberg believes that, particular to the ticket industry, players often reach a level of scale and realize it’s hard to leap to the next level, and that forces them to look for partners to provide growth. “Smaller players may have great technology but can’t scale it or may have limited resources, and may have a great book of business but can’t move past that book because they don’t have the investment dollars.”
“As the ticketing world changes, the market needs new technology and acquisitions are a way to augment solutions and solve problems,” he said. Rosenberg thinks that, just as in any other industry, the partnerships come in waves as companies react and re-evaluate to the latest consolidations. “Lots of fragmentation and low barrier to entry like ticketing speeds up that process.”
Ticketing is complex, competitive and hard to do well and profitably, he stressed. “Innovation drives the ticketing industry,” he said. “Companies look for gaps, and that drives them to purchases.”
Rosenberg believes consolidation is a healthy dynamic and thinks we’ll continue to see it happen.
Eventbrite has made seven acquisitions since its inception. “We look at acquisitions as, ‘can we get there faster and more effectively and gain more scalability?’ We look at how we can innovate and find solutions,” he said. “It’s one of many strategies. We look at acquisitions for technology, acquisitions to expand our footprint and general partnerships which is how we expand our offerings to the general public.”
“On paper, acquisitions always look great,” he warned. “But then the reality hits and you have to merge two different companies, different cultures, merge technology and ways of doing business.”
Still, Rosenberg is an ardent supporter of consolidation. “It brings together the best of both enterprises.”
Rosenberg is also firmly in the open platform camp. “The whole industry is going to pivot to open very soon,” said Rosenberg. “Our philosophy is that ‘open’ wins. It gives the customer a choice; it puts the inventory where the consumers are; open allows companies to enter into partnerships.
“Fragmentation breeds consolidation,” said Andrew Dreskin, founder and CEO TicketFly, which was recently acquired by Eventbrite. “We’ve been predicting this wave for years, and we’re seeing it all play out now. It’s perfectly natural behavior.”
Dreskin thinks this latest batch of consolidation should be looked at with a bigger looking glass and argues that ticket consolidation has been happening over a long period of time. 
“It may feel like it’s consolidation as of late, but if you look at the industry, it’s been consolidating for a long time,” said Dreskin. You go back to Ticketmaster’s acquisition of TicketWeb; Tickets.com was basically the process of a roll up. The advent of the internet changed everything just as mobile is now changing everything again,” he said.
Any industry that revolves around tech has a natural realization that small companies who hire similar numbers of people and build similar products and features is not time well spent, especially when competing against legacy players, he said.
“Smaller companies competing is a waste of time, and the larger companies are wired into showing growth, which acquisitions and partnerships provide. Either small upstarts come together to compete or the dominant players roll up the smaller players,” he said. “It’s survival of the fittest.”
Deskin pointed to the record industry, the airlines and the big accounting firms, all industries that have had major periods of consolidation, as places to look to understand what’s happening in the ticket world today. “This plays out in every industry.”
Dreskin thinks there is more consolidation to come. “There are acquisitive players out there who realize that M&A done smartly can be quite accretive to stockholders.” He cautioned, though, that M&A can be treacherous. “Between 50 to 80 percent of M&A’s go wrong,” he warned.
Dreskin is confident the industry will continue to consolidate. “A lot of the big players are quite acquisition oriented.” He also believes that “exclusivity is over and the exclusive model will have to open up and relax. TicketFly, as a company, is happy to relax exclusivity provided that the other leading players in the industry do the same. On an open playing field, we’re glad to market against any other platform.”
Meyerson thinks technological integration is harder than most people understand.
“People are very busy moving to mobile but they’ve left behind the hard work of ticketing,” he said. “The secret sauce going forward is companies that know what they’re doing, proven what they can do and are now reinvesting in innovation and looking to the future.”
“Companies that are forced to buy and sell and merge because their finances or investments are forcing them to do so, are not advancing the industry,” he said.
“When the impetus isn’t to create something great, but instead is to build on the deal, it’s not going to move the needle.”
Meyerson thinks the Paciolan/Learfield deal is one that made perfect sense. When Paciolan was sold to Comcast Spectacor “they were moved into a place where they were integrated into a venue operator; it was problematic,” he believes. “With Learfield, who operate collegiate sports, it’s a similar model, a niche play, and could be a good strategy.”
He’s less impressed with the Eventbrite/TicketFly merger. “This is a market share play. These guys have a lot of hard work ahead of them. There are a ton of decisions that will need to be made from their corporate culture internally to their brand externally.”
Meyerson pointed out everything from shared services to which platform they will use. “Now they have to serve all these clients and ease all the waves and disruptions that come with M&A.”
Meyerson thinks the distribution model will flatten out and open up and become horizontal, multipartner and multichannel. “There are big changes coming for the industry. The democratization of discovery and transaction is putting tickets where people live. The standalone channel model is a brittle model that the market is passing by.”