Yesterday, everyone in the ticketing world gasped a little – though not from surprise – that the venture-grabbing little brother to Ticketmaster, Ticketfly, was snatched up in a staggering $450 million acquisition by music streaming giant, Pandora.
It was no surprise that Ticketfly was priming to flip from the start; in fact, the run of endless capital seemed to go on for so long, some scratched our heads, wondering “When? And who?”
So most of us in the know spent the day trying hard to draw a line between these two companies. Clearly there’s a common ground – both serve music lovers. But where else do their demographics overlap?
It became a little fun to see the comments and projections throughout the day, including my favorite – that these two companies had “closed the loop” between streaming music and buying a concert ticket. The premise sounds simple enough: Pandora has 80 million listeners who like music of one kind or another. The company has a pile of data that is valuable to artists and promoters, including finding concentrations of listeners who love a particular artist in specific areas.
They are, according to Pandora CEO Brian McAndrews, planning to provide artists, managers and promoters with geographic data about where their songs are streaming to help identify tour stops and more effectively route shows. That’s an interesting thought – but how does it flesh out?
Said one millennial employee today, “I don’t think there’s much of a demographic crossover between Ticketfly (clubs, festivals, rock, and B and C level bands – so the mostly under 30 crowd) and Pandora, the grandma of streaming services, that, well, your mom and grandma use.
So while I’m listening to Italian Mambo, Jazz or classical guitar on Pandora, I’m going to get an ad for tickets to a rock show at one of the clubs in town? Huh? Or will it be an ad for a jazz show at the Orpheum in Phoenix, ticketed by TicketForce – and Pandora just helped grow its competitor?
There’s likely a demographic gap in the circle before we even begin the real conversation, which is how this acquisition changes the ticketing industry.
Pandora is clearly a direct-to-consumer service, while Ticketfly has to sell its service in long term contracts to venues in a B2B model that leaves no options for the consumer.
So sure, there’s a lot of data there – 80 million users, Pandora reports. But once the data is shared with promoters, to “close the loop,” you would then need to lock up the right show in the right venue, and then ensure it is a venue served by Ticketfly.
That “closed loop” of fan streaming music to fan buying a ticket is missing a link: the venue. I was at a theatre conference today, and checked in with the directors. “You do still hold the trump card with ticketing, right? Your venue decides which provider sells every ticket exclusively, yes?” I posed, to affirmative nods and answers all around.
The ticketing part of the music streaming data gets a little weird here, and I’ll show you why. Let’s say you’re a Taylor Swift fan. You listen to Taylor Swift on Pandora. Pandora makes sure your city gets a stop on the next tour by sharing your city’s data with Taylor’s people. (Surprise! Phoenix has a lot of people who like Taylor! She’s coming!) And now, next time a Taylor song comes on, you get an ad letting you know Taylor is coming to the big arena in Phoenix, so get your tickets now – through Ticketmaster? We hit a snag.
I love the idea of helping artists know where their fans are. And we can recognize that a lot of people are listening to music through streaming services instead of the radio, which means the radio ads are missing those users. But there’s a big difference here in that the radio stations will tell you where to get tickets no matter the outlet, while Pandora will be limited to one.
A lot of this comes down to event discovery, and that’s where I wonder if this acquisition can change much. Event discovery is also supposed to be a big problem in the industry. Many are trying to fix it, including Pandora and Ticketfly, but I’m still not convinced: Festivals sell out quickly; when the team is doing well, sports arenas are packed. The theory is that more people would attend events of all kinds, if only they could find them! But what if they just don’t want to attend an event? Maybe it’s not priced right. Perhaps the venue parking is a nightmare and food is too expensive. Maybe the experience just isn’t alluring, or engaging enough.
There are a host of reasons that events don’t sell, but with today’s media-saturated fan – who can and will follow their acts on social media, constantly share news, and stay plugged in so they don’t miss a thing – it’s hard to swallow that event discovery is the real issue.
Even so, I still can’t draw the line from a music streaming service to an event ticket purchase on a broad scale. Ticketfly has had success for sure, but 18 million tickets in the US and Canada is hardly a big enough market-share of the $6.2 billion ticket industry. To make the ticket purchase just one link away, a Pandora user would have to like their artist enough on the app and then hope that artist came to their town, at a Ticketfly venue, no less.
Is this an industry-changing day? I don’t think so. Will Ticketfly expand their reach to make it more of a formidable union? Will Pandora have the patience and capital to invest to make that happen? That remains to be seen.
Meanwhile, investors and tech writers, who don’t really want to know why this isn’t closing any loops, will enjoy watching the rise in stock value that always comes with perceived value and exciting announcements.
The rest of us? We’ll all be waiting to see.
This post was also posted to the TicketForce Blog on October 8, 2015.