first pitch case competition mc gill submission

First Pitch Case CompetitionDesautels Faculty of Management – McGill University

Jorge Tatto, Deepti Kaul & Christian Mathews-Gagné

Executive Summary

I. NBA fans’ needs and wants are changing – current season ticket model does not offer enough flexibility to be accessible to all

II. Millennials are spending more time on digital devices, which they increasingly incorporate into all of their activities

III. On average, 23% of season ticket holder’s seats from the sample were left empty

IV. Untapped revenue opportunities continue to exist that can be exploited by both Ticketmaster and the NBA

V. Data is playing an increasingly important role in ticketing. Ensuring quality information is collected from fans is essential.

SeatShare & Flex-Pass:

Innovative ideas that give fans a range of flexible options

Dynamic Pricing Tools:

To empower fans to take more control of their tickets

LeapFrog:

A tool that puts seat upgrades in the hands of the fan

Social & New Tech:

Engaging the modern fan in the channels they inhabit

Ticketmaster Club:

A loyalty program to reward the fans and cross-sell other events

1

Our recommendations play to

Ticketmaster’s strengths –

drawing on both its size and

collective knowledge to bring

forth innovative solutions

designed to delight both

partners and fans alike.

Reimagining season tickets

2

3

4

5

Optimizing the secondary market

Maximizing the fan experience

Key

Findings

Ticketmaster must innovate & respond to new offerings from

key competitors that present a veritable threat

Competitive Landscape

• Integrated

platform

• Wide variety

of offerings

• Ties to NBA

• Focused on

continuous

innovation

•MLB subsidiary

•Threat to

current

Ticketmaster

contracts

• Access to

other MLB

services like

the Ballpark

app

• Low-cost

model

• Actively

acquiring +

acqui-hiring

• Innovative

offerings for

promoters

• Freemium

option

• Secondary

market

leader

• Key partners

• Rewards

program

• Working on

added social

integration

The modern NBA fan will be a highly connected & socially

motivated individual accessible through many channels

+7% of NBA fans play fantasy sports - a

higher percentage of the fan demographic

from the NFL

40% are more likely to use a mobile device

to access their social networks

Online activity to access stats & specifics

about teams and players has increased by

+66% since the 2012-2013 season

Sports programming accounts for 1% of all

television content yet accounts for 50% of

tweets that are sent about television

content

Key Demographic Insights

75% Of the workforce in the U.S.

will be comprised of Millennials

by the year 2018

Ticketmaster’s current offering has enabled them to keep

the competition at bay

Current Situation

Secure Platform Data Capabilities

Technological ProwessMarket Presence

Ticketmaster has grown to

become the most relevant

player in the market, allowing

them to secure highly profitable

exclusive partnerships with

both teams and venues.

Ticketmaster Verified Tickets is

an advanced security feature

for reselling and transferring

tickets. Fans can trust and rely

on Ticketmaster to obtain

authentic tickets.

The interactive seat map

uniquely integrates the

primary and secondary

markets. It provides

transparency for fans and a

competitive advantage over

competitors who only operate

in one specific market.

Live Nation and Ticketmaster

are able to provide a truly

targeted offering through the

use of data. From event

discovery to integration with

other platforms, Ticketmaster

allows fans to stay connected.

Three key opportunity areas to act on: the season ticket

model, the secondary market and the fan experience

Opportunity Statement

SeatShare allows fans with common interests to share the

cost of a season ticket

Flex-Pass provides season ticket holders who purchase this

option with periodic seat upgrades

Dynamic pricing & pricing tips for the secondary market

will ensure more tickets are sold in both markets

LeapFrog allows fans to bid on unused seats in the stadium

once the game has begun

Social allows fans to stay connected with friends and improves

event discovery

New tech engages fans both new and old in innovative ways

Loyalty rewards fans and encourages them to attend more events

The needs of modern NBA

fans are not being met

with current season ticket

model

Unused tickets represent a

missed profit generation

opportunity for fans,

Ticketmaster, and the NBA

Changing NBA fan

demographics and

proliferation of digital

technology require

continuous innovation

CHALLENGES ACTIONABLE RECOMMENDATIONS

1. SeatShare and Flex-Pass bring flexibility to the existing

Season Ticket model

• SeatShare: allow friends or strangers to share a

season ticket. Ideal for fans that cannot attend all

games and are willing to pay a small premium for the

convenience of pre-booking their share of seats.

• Step 1: fans get matched by Ticketmaster based

on similar seat and budget preferences

• Step 2: Tickets are divided amongst seat-sharers

• Step 3: Attend the game or resell tickets on

secondary market

• Flex-Pass: A season ticket with flexible seating

assigned by Ticketmaster based on demand for the

event. Fans pay a small premium for the option to be

periodically upgraded.

AssessmentConcept

Recommendations

•Increased number of season ticket holders and attendees for each game

•Increase profit per gameBenefits to NBA

•Provides flexibility and convenience that fans seek

•Helps build a stronger fan communityBenefits to Fans

•Extracting consumer surplus with different options and price points

•Taps into previously unattainable customers

Benefits to Ticketmaster

•Utilize Live Nation’s expertise in ticket pricing to optimize SeatShare and Flex-Pass prices

Leveraging Live Nation’s

Capabilities

•SeatShare fans will be matched into groups through Ticketmaster’s digital platforms

•Flex-Pass holders get notified of ticket upgrades on game-day on Ticketmaster mobile app

Digital

•Leverage fan data to enhance pricing mechanisms, thereby generating more revenue for teams

Long Term Sustainability

Synergies:By utilizing social media

platform integration,

SeatShare can also be

available to friends interested

in sharing a season ticket

Profit:These recommendations appeal

to millennials while charging a

premium over regular season

tickets. They create value for

Ticketmaster, the teams and

fans

2. Dynamic Pricing and Pricing Tips maximize revenue for all

parties in the secondary market

Notify season ticket holders of upcoming games. If they

are unable to attend, with the click of a button, they

can post their tickets on the secondary market and

decide between two pricing methods:

AssessmentConcept

Dynamic Pricing Pricing Tips

Maximizes tickets sold

on secondary market

by adjusting prices

based on demand

Removes need to

continuously log on to

update prices

Easy to use: just

approve dynamic

pricing and wait for

your ticket to be sold

Recommends price

ranges to better fit

each game’s demand

Tips would change as

demand fluctuates

Minimizes risk of

tickets not sold due to

inefficient pricing

Alert seller if price is

too low compared to

other tickets

Recommendations

•Increase game attendance leading to higher potential concession revenueBenefits to NBA

•Maximize probability of reselling a ticket

•Reduce effort selling tickets for multiple gamesBenefits to Fans

•Capture more consumer surplus in secondary market by pricing according to demand

•Increases revenue due to greater ticket sales on ticket exchange platform


•Use of data and forecasting capabilities to price tickets in the most efficient matter


Capabilities

•Pain-free customer experience easily integrated across all platforms

•Alert fans of upcoming games, educate on efficient pricing, notify when sold

Digital

•Network effect creates strong barrier to entry

•Integrated ticket selling platforms paired with verified Ticketmaster security capabilities make the model hard to imitate


Synergies:Live Nation’s pricing

capabilities will ensure an

efficient equilibrium between

primary and secondary

markets

Profit:If all tickets from the dataset

provided had been sold in the

secondary market at face value,

Ticketmaster would have made

over $900,000 by charging a

26% service fee

•Creates previously unexplored revenue stream

•Filling premium seats is good for the NBA imageBenefits to NBA

•Can securely bid, pay and claim ticket

•Empowers fans by letting them bid the amount that fits their willingness to pay

Benefits to Fans

•Generate more revenues from fans who are already at the game

•Developing a previously untapped revenue stream in which competitors are entering


•Technological infrastructure and data analysis capabilities to facilitate bidding process on app


Capabilities

•Fans could log on to arena Wi-Fi and utilize their mobile devices such as smart phones, tablets, and smart watches to conveniently bid

Digital

•The number of fans Ticketmaster has access to over its app is a big advantage that would be hard for competitors to replicate

•Extensive resources are needed to execute this complex service


3. LeapFrog extracts additional consumer surplus from

ticket holders

AssessmentConcept

STEP

01

Game Star ts

Ticketmaster identifies

unattended tickets and

notifies owner on

Ticketmaster app to put

their seats up for auction.

End o f 1 st Quarter

Bid process starts: Participating

fans bid for ticket upgrades.

Winners new tickets appear on

their mobile device and they

can move to their new seats.

Res t o f Game

Fans can enjoy their new seat

along with any perks included

in their new section, enhancing

the experience.

STEP

02

STEP

03

This system allows Ticketmaster and NBA to generate

last minute revenues from unused tickets.

Recommendations

Synergies:The software can identify if

bidder has any friends in that

specific game and find seats

close to them, further

enhancing the social

experience

Profit:By providing a last-minute

service for resellers who have

unsold tickets, Ticketmaster can

charge a 50% commission on the

price payed through bidding

process

eSports & videogames: Become official ticket seller for

eSports tournaments and cross-sell NBA tickets.

Daily Fantasy Sports: A new platform where interaction

is possible with highly engaged fans. Ticketmaster can

send targeted offers to fans based on their DFS profiles.

Virtual Reality: Invest in new VR technologies applicable

to current offering. Examples include:

• VR in-game experience for fans

• VR map of venues for seat selection and purchase

•Engaging a wider audience by appealing to new demographics

•Greater exposure to different up-and-coming platforms on which NBA content is consumed

Benefits to NBA

•Ticketmaster can provide bigger audiences and facilitate discovery in new technology ventures that enhance experiences for fans

Benefits to Fans

•Collecting more data

•Being where the fans are

•Increasing sales via cross-selling initiatives


•Extensive entertainment industry knowledge and ability to appeal to a wide range of consumers

•Can facilitate development of VR capabilities


Capabilities

•Ensure technological infrastructure is present to accommodate new digital tools across existing digital platforms

•Needs to be user-friendly for all audiences

Digital

•Strong partnerships and data obtained will make it impossible for competitors to offer similar experiences to fans


4a. Incorporating new technologies into Ticketmaster’s

existing interface will maximize fan experience

AssessmentConcept

Recommendations

Synergies:By utilizing recent acquisitions

like Universe, Ticketmaster

can provide an adequate

ticketing service for smaller

events in the High Tech arena

Profit:New profit sources are

attainable in non-traditional

events where sports content is

consumed. Cross-selling to live

events will further increase

profit streams.

Further integrate Ticketmaster’s digital presence with

social platforms to better target millennials

Facebook: New features will further integrate

Ticketmaster with Facebook. For example: add a button

for easy purchase of event tickets without navigating

away from Facebook.

Other: Integrating with social platforms such as Spotify

and theScore can provide information about users’ music

and sports preferences. This data will serve to provide

timely and targeted recommendations.

4b. Connecting fans through deeper integration of

Ticketmaster’s capabilities on social platforms

Recommendations

•Access to 360 degree information on fans and their preferencesBenefits to NBA

•Recommendations based on their friends’ purchases ensures they don’t miss an event

•Enhanced social experience, allowing them to connect with friends and attend games together

Benefits to Fans

•Having a call-to-action in an event discovery tool will increase ticket sales

•Collecting valuable holistic data on fans


•Cross-platform integration to deliver a seamless experience on both Ticketmaster and Live Nation's apps


Capabilities

•Expanding social scope through integration with established social platforms allows fans to easily find, purchase and recommend events to friends

Digital

•Integrating with up-and-coming social media sites will ensure sustainable competitive advantage


AssessmentConcept

Synergies:Accessing fans’ personal data

on social platforms creates a

full-bodied understanding of

their needs and wants,

allowing Ticketmaster to

develop targeted offers

Profit:Cost savings associated to the

free “earned media”

advertising generated by fans

posting about Ticketmaster

events and features on its

behalf

5. Ticketmaster Club – a loyalty program to engage &

reward season-ticket holders

AssessmentConcept

• A simple yet rewarding loyalty program that will

incentivize season-ticket holders (companies or

individuals) to attend more games and ensure they sell

their tickets if they cannot attend

• Fans will collect points if their tickets are attended

1.Rookie 2.All-Star 3.MVP

For 90%

attendance,

receive 2%

discount the

following year

during ticket

renewal

For 95%

attendance,

receive 4%

discount

For 100%

attendance,

receive 6%

discount

Recommendations

•Encourages greater attendance of games or sales of unused tickets

•Name on Jumbotron is aspirational for fansBenefits to NBA

•Discounts and recognition for excellent attendance Benefits to Fans

•Ensure unused tickets get sold in the secondary market - especially by companies that rarely attempt selling unused tickets


•Relationships with teams to provide value-added perks that resonate with the fans


Capabilities

•Attendance tracked online

•Monthly email newsletter showcasing upcoming games and attendance status

Digital

•Assess program and continue to add valued premium perks that improve fan experience


MVP season-ticket holders are recognized on

Jumbotron during game warm-ups.

Synergies:Fans and companies that

cannot attend, can rapidly sell

tickets on secondary market

using our dynamic pricing tool

Profit:On average 23% of season tickets

are unattended. If sold at face

value (minimum) on secondary

market, Ticketmaster would

make an additional

$1m/season/team.

The NBA rollout plan can serve as a benchmark for other

Ticketmaster events

Implementation

SeatShare

Today

August October

Season startsSeason startsTickets go on sale

Today

Tickets go on sale

August October

2016 Season 2017

Launch pilot to gauge demand, improve program

mechanics and test software performance Full scale launch across league

Launch immediately, closely track seat upgrading and conduct improvements as needed to

enhance model.Flex-Pass

Secondary market should integrate these ideas immediately, the pricing mechanism should

improve as more data is collected.

Launch pilot to test program

mechanics and ensure proper

functionality of bidding platform

Pricing Tools

LeapFrog

Social

New Technology

Loyalty

Launch feature and

advertising campaign to

educate customers

Launch now and secure partners for app integration

Launch now and continue investing in new technology developments to stay ahead of competition

Develop in-house team and analyze historic data to create precise program metrics Large scale launch

Concluding thoughts

Ticketmaster is the current market leader, but it faces intense

competition from large rivals with close ties to major sports leagues, as

well as newer entrants with increasingly unique capabilities.

Going forward we believe Ticketmaster should focus on reimagining the

concept of season tickets, attacking the secondary market, expanding its

integration with social networks and exploring emerging technologies.

Our proposed recommendations leverage Ticketmaster’s existing

capabilities, while positioning them to expand their offering in a way

that will facilitate a sustainable competitive advantage.

Executing on these opportunities will require Ticketmaster to invest in its

capabilities, to secure new strategic partnerships and to continuously

reassess its offerings.

Acting on the key opportunities discussed in this presentation will enable

Ticketmaster to maintain its leadership position while delivering more

value to both its partners and their fans.

Sources

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first pitch case competition mc gill submission

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