Outbox poised to challenge Ticketmaster through deal with AEG
Will Ticketmaster be outpunched by its former chief executive?
Fred Rosen, who is credited as the primary architect of Ticketmaster’s dominance in the ticketing business, this weekend will begin rolling out a new service to rival his old company.
And he’s starting by taking away Ticketmaster’s biggest customer — AEG, a Los Angeles entertainment company owned by billionaire Philip Anschutz that promotes thousands of concerts a year and operates more than 130 venues around the world, including Staples Center and L.A. Live.
AEG announced Tuesday that it would take the next two years to switch the ticketing service at all of its venues from Ticketmaster to one that uses technology from Rosen’s new company, Outbox Enterprises. Launching this Saturday with the Bluebird Theater and the Ogden Theatre in Denver, AEG aims to have the new service up and running at Staples Center and Nokia Theatre by mid-2012, AEG President Tim Leiweke said.
For Ticketmaster, losing AEG, its largest third-party customer, is a blow, albeit not unexpected. As a condition for getting antitrust approval for its 2010 merger with Live Nation Entertainment Inc., Ticketmaster agreed to license its ticketing service to AEG. Ticketmaster declined to comment on AEG’s move.
Instead of using Ticketmaster’s software, however, AEG turned to Rosen and Cirque du Soleil, which owned a sophisticated ticketing software to handle its own shows. The three formed a joint venture in Outbox, with AEG as both a part owner of the Los Angeles venture and its largest client.
The idea is to offer Outbox’s ticketing system to other venues and compete head-to-head with Ticketmaster.
Outbox plans to win over venues from Ticketmaster by giving them access to their customers’ data. Currently, ticket buyers are sent to Ticketmaster’s website to make their purchases. As a result, Ticketmaster retains the customer information, including valuable demographic data that can be used to market other products.
“Our view is that nothing should come between you and your customers,” said Rosen, who is co-president of Outbox. “We want to empower the venues to market to their customers however they want. Our motto is ‘Our tools, your rules.’ ”
Giving venues more access to customer data is not entirely new. Veritix, based in Cleveland, has been selling its ticketing service to independent venues for three years, giving them the technology to sell tickets on their own websites and also allowing them to keep their customers’ information.
“People are more apt to buy a ticket from a venue or a team like the Cleveland Cavaliers than they are from an outside ticketing company,” said Jeff Kline, president of Veritix. “You’ll see a lot more examples of this in the future, where ticketing isn’t consolidated by one seller,” namely Ticketmaster.
“This introduces more competition, which is ultimately good for consumers,” Kline said.
Some wonder whether Outbox will succeed in unseating Ticketmaster from its throne. Unlikely, said Bob Lefsetz, a music attorney and industry analyst.
“Are we going to see the demise in the monopoly of Ticketmaster? The answer is yes,” Lefsetz said. “Will Ticketmaster be marginalized? No.”
