Site is just the ticket
Internet evolution is helping — not hurting — S.F.’S Eventbrite
Amid the jibber jabber of drones, driverless cars and smart watches that pervades the Bay Area these days, it would be tempting for a well-worn technology firm to shake things up in the name of innovation and relevance.
Yet Eventbrite CEO and co-founder Kevin Hartz doesn’t seem particularly anxious, mostly because he believes the San Francisco company, founded in 2006, is still innovative and relevant.
Apparently those looking for innovation aren’t booking tickets to high school theater or business conferences.
Eventbrite derives all its revenue from the relative mundane business of selling tickets online to events that previously sold paper tickets. The company takes a small fee for every ticket sold. Though Hartz declined to disclose the fee, the company said event organizers will sell $1.5 billion of tickets this year, a 50 percent jump from 2013. Assuming Eventbrite takes a conservative 2 percent
of each sale, that means the company would generate about $30 million in revenue.
“We’re really focused on getting every live experience on the planet,” Hartz told me. “Small ticket fees add up to a big number, so we don’t have that sense of urgency. I often see the challenge of companies when they start to lay on new revenue lines. That means they tapped their markets out, whereas we have so much room to grow.”
Demand for live events
As the economy recovers from the recession, online ticket sales have been growing at a healthy annualized rate of 4 percent, according to a report by market research firm IBISWorld. In 2014, online ticket firms will generate a profit of $310 million based on revenue of $3.8 billion.
“Personal disposable incomes have recovered and consumer sentiment has improved, leading to strong industry growth,” the report said. “Furthermore, the number of Internet transactions has underpinned online ticket sales growth over the long term.”
In many ways, Eventbrite can credit its resiliency to a prediction that hasn’t come true. Pundits have long said the Internet will one day make physical gatherings obsolete. Why attend a business conference when you can log in remotely? Why pay for a concert when you can watch a live stream?
“The movement is back to live events,” Hartz said. “Technology facilitates us to gather together. It’s the opposite of what we imagined it to be, being isolated by technology. Artists don’t make money from digital music sales. They make their money by touring.”
No pressure to go public
Recent research supports Hartz’s argument. A Rutgers University study published in March concludes that people still meet in public even as smartphone use soars.
“The increased tendency to spend time in groups while in public contrasts with evidence from other research that suggests a decline in American public life, and that mobile phones have increased social isolation in public spaces,” the study said. “We argue that public spaces are an important component of the communication system that provides exposure to diverse
“Technology facilitates us to gather together. It’s the opposite of what we imagined it to be, being isolated by technology. Artists don’t make money from digital music sales. They make their money by touring.”
Kevin Hartz, Eventbrite CEO
messages, brings people into contact to discuss their needs and interests, and helps people recognize their commonalities and accept their differences.”
In fact, technology is driving growth in public events like concerts and sporting events. IBIS World estimates those two activities account for 75 percent of all online ticket sales in 2014.
“The growing popularity of the Internet has boded well for the size and profitability” of the industry, the report said. “The rise of smartphones has also helped as consumers are now more comfortable than ever making purchases on the go through seamless smartphone applications.”
For these reasons, Hartz doesn’t feel any pressure to go public. Eventbrite has plenty of cash; the company has raised $200 million from investors and boasts $100 million in the bank.
Social clearinghouse
Hartz also says Eventbrite will not take on Ticketmaster — the big player in concerts and sports tickets — anytime soon.
“With classes, tours, music festivals, community theater, we have so much market share we want to grab,” he said. “There is very little overlap between us and traditional ticket companies. At this point, we’re not focused on taking down Ticketmaster. Over time, that potential is there. But we can build for a long time without competing with Ticketmaster.”
That’s not to say Eventbrite is staying still. It recently rolled out a feature that allows event organizers to offer reserved seating. The company is also working on an engine that will organize and recommend events to users based on the vast amounts of data the company has collected over the years.
“We’ve been mostly focusing on helping organizers,” Hartz said. “We are now investing a lot on discovery. Only a small portion of customers comes to Eventbrite to find things to do. We want the consumer to think of Eventbrite to offer things that cover all parts of your lives.”
A plethora of startups, including SeeqPod, Scouta and Zync, offer event recommendations, but mostly for local activities. Eventbrite hopes to use its size and scale to establish itself as the clearinghouse for all kinds of social activities.
“We’re going to build a very, very large company,” Hartz said.