StubHub Eyes Movie Theaters as Ticket Seller Looks Beyond Sports, Concerts

After building its core business around live music and sports, online ticket reseller StubHub is looking to add movie theaters, theme parks, museums and other nontraditional businesses to its platform.

It’s the expansion into selling movie tickets that should especially perk up Hollywood’s ears — and those of executives at Fandango and MovieTickets.com as another potential rival steps on their turf.

In a year where back-to-back tentpoles — from April’s “Furious 7” to December’s “Star Wars: The Force Awakens,” “The Avengers: Age of Ultron” and “Jurassic World,” among other big releases in between — are expected to boost the box office to record levels, StubHub is considering ways to capitalize on all that activity at the megaplex.

One way could be to broker partnerships with large exhibition chains. The company already started offering live theater tickets through pacts with companies like Nederlander to fill seats at Hollywood’s Pantages Theatre for “Wicked,” for example, and shows on Broadway like “Book of Mormon,” through Telecharge.

While exhibitors have never been keen on discounting tickets through other sellers, StubHub could prove helpful in filling screenings during off-peak hours like matinees or weeknights when business is slower.

“We’re absolutely transitioning to expanding our marketplace from what we’ve traditionally done and have been known for,” Michael Katz, StubHub’s head of merchant services, told Variety. “We’re moving the brand from traditional sports into new areas of live entertainment and seeing where that goes. That’s where we’ve been spending our focus.”

Exhibitors could embrace eBay-owned StubHub the way major event producers like AEG have.

With 40% of concert tickets going unsold each year, StubHub helped attract giant event promoters like AEG when it began legitimizing the secondary ticketing market by offering a safe place for venues to provide their unsold tickets at a discounted price, as well as an outlet for individuals who wanted to offload their own tickets. As a result, StubHub claims it essentially helped crack down on scalpers, and gave consumers a way around having to deal with potentially shady characters.

StubHub doesn’t need deals with exhibitors in order to sell tickets to screenings. Because its platform is open to everyone and any form of ticket, movie tickets can be sold without StubHub requiring a deal with a chain. And they may not care, considering that in order to sell on StubHub, the ticket was already purchased, meaning the exhibitor has already collected its money.

As a result, it is certainly conceivable that an entrepreneur could buy out the first showings of “Star Wars” at a major venue, for example, and offer them at a premium price on StubHub.

Whether that will happen is another matter. But there already have been instances on StubHub’s site where users have sold passes to high-profile movie events.

When Regal Cinemas’ 4DX theater opened at Los Angeles’ L.A. Live venue with “Transformers: Age of Extinction,” in 2014, tickets for the first showings wound up on StubHub.

That caught AEG, which has a close relationship with StubHub since 2012, off guard — and started giving the giant promoter some ideas of other events it could start offering through the secondary ticketing marketplace.

“We didn’t expect it,” said Todd Goldstein, AEG’s chief revenue officer, of the 4DX ticket sales. “It wouldn’t shock me if people will do that again this year with Hollywood releasing many big films. I think we were surprised that there was a market for that kind of product.”

StubHub will surely be touting its ability to move tickets at 550 venues that produce live theater, music, film and other events in the U.S., Canada, and the U.K., as part of a deal with AudienceView. StubHub also offers tickets to the Metropolitan Museum of Art, the Andy Warhol Museum and Madame Tussauds Wax Museum through direct deals with the venues.

In addition to filling more movie theater seats, StubHub’s expansion into supporting other events could also provide studios like Warner Bros. with an opportunity to sell tickets directly to consumers when it kicks off its DC Comics superhero-themed “The Art of the Brick” Lego exhibition later this year.

StubHub collects a percentage of each ticket sale, and eliminated hidden fees in 2014. Professional brokers make up around 35% of its sales, with individual tickets sellers accounting for the rest.

While eBay does not break out StubHub’s revenues, it sells one ticket every second, and saw its mobile platform grow more than 40% last year.

AEG especially touts StubHub’s technology, with tickets providing buyers a bar code that can be scanned at venues, just like any other ticket.

“Their technology is as good as it comes in this industry,” Goldstein said. “There’s a trust factor that comes with StubHub that’s undeniable. When you post your tickets there, you know it’s going to work as a buyer or seller.”

That was especially tested during the Super Bowl, when ticket sellers pulled tickets that they had committed to secondary marketplaces in an effort to force sellers to raise the price of the supply four-fold. StubHub wound up taking a seven-figure loss in order to fulfill every Super Bowl ticket sold on its platform and even stepped up for customers that had been burned by other secondary ticketing platforms. The move may have cost StubHub money, but it turned the company into a hero during the big game, which generated considerable goodwill.

“No one wants to be in a situation where the bar codes don’t work,” Katz said. “That creates an uncomfortable situation when you customers get to the box office. StubHub has mitigated those issues.”

StubHub already has been expanding its platform to become more of a source for entertainment.

Its concert discovery app, StubHub Music, signed up Spotify as a partner this week. The app, which has already been able to search an iTunes user’s library to inform them when their favorite performers are playing a concert in their area, can now search Spotify as well. Naturally, tickets for those events are sold through the app.

“StubHub Music is intended to help fans make sure they are not missing their favorite artists when they come to town,” said Gary Kanazawa, head of StubHub Labs.

StubHub will add videos and interviews it produces at South by Southwest this month to the music app, as a way to offer more content, and increase revenue opportunities.

Expanding the app — or launching another — to focus on movies wouldn’t be too difficult, however.

In determining which nontraditional areas it wants to get into, StubHub closely monitors what its users are searching for.

Tickets for Disneyland frequently come up, the company says.

“We try to be a data-driven company in terms of the decisions we make,” Katz said. “We’re learning from the fans who are typing in key words of things they might want. That’s serving for us as a treasure map. If fans are looking for tickets for things but our inventory isn’t on that level, then we go to the venue owner.”

StubHub has been approached by a number of companies, including rail ticket sellers and other companies in the travel industry.

“We’re approached pretty regularly on new opportunities,” Katz said. “The thing for us is making sure we haven an experience that services the venue or property and also allows us to deliver inventory with a certain level of ease.”

As it looks to expand its service in the U.S. to include more ticketing categories, it’s also increasingly looking at setting up shop in foreign markets where movie tickets could become a source of revenue.

“We’re not quite at the movie theater stage yet,” Katz cautions. “It may not start tomorrow, but being a marketplace for fans to access entertainment experiences is certainly how we’re looking at things moving forward.”

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