Introduction and Case Background
Founded in 1976 and headquartered in West Hollywood, California, Ticketmaster is the world’s number one live entertainment ticketing and marketing company. Ticketmaster operates in over twenty markets worldwide, serving more than 9,000 clients across multiple event categories. It provides exclusive ticketing services for leading arenas, stadiums, professional sports franchises and leagues, college sports teams, performing arts venues, museums, and theaters. Ticketmaster’s pledge to its clients is, “To provide the best systems, services, and tools for the optimal sale of tickets to the widest possible audience. For Ticketmaster consumers, its pledge is, “To provide convenient, secure, and fair access to the best possible tickets offered by our clients.”
Ticketmaster is one of the many operating businesses of InterActive Corporation, better known as IAC. IAC separates its businesses into five different categories: retailing, transactions, memberships and subscriptions, media and advertising, and emerging businesses. Ticketmaster is a member of the transaction category, which accounts for 28% of IAC’s annual revenue. Of that 28%, Ticketmaster brings in 18% of IAC’s annual revenue and 35% of IAC’s operating income before amortization. Retailing is the leading revenue source for IAC, bringing in 50% of its annual revenues.
Traditional & Online Processes
Ticketmaster facilitates ticket sales, ticket resale services, marketing, and distribution through its’ website, www.ticketmaster.com, 6,700 retail outlets, and a global network of call centers. The Ticketmaster website is one of the largest e-commerce sites on the Internet; in fact, more than two-thirds of Ticketmaster tickets are purchased online. In the Des Moines metro area, Ticketmaster has five retail outlets including three HyVee Foods stores, Younkers at Merle Hay Mall, and the Civic Center of Des Moines. There are eight different Ticketmaster call centers in Iowa including a Des Moines call center.
In our analysis of Ticketmaster, we looked at the society and industry Ticketmaster resides in and the internal aspects of the company. Upon this examination, we then discussed and assessed strategic alternatives for Ticketmaster. Next we will go into detail about this analysis and assessment.
The current economy that has slowed plays a part in Ticketmaster’s sales. With a slow economy, there is usually less disposable income for those customers that are the most likely to spend money on event tickets. These individuals are also usually the ones that are the most internet savvy so among the internet demographic with the highest web use/access in Ticketmaster’s sociocultural regime. With the current web capabilities, Ticketmaster has taken advantage and has in place a website to support the 175 million adult Americans using the Internet and their potential event ticket purchases.
In Ticketmaster’s industry we looked at the barriers to entry, power of customers, existence of substitute products, industry value chain, and intra-industry competition. Through review of the barriers to entry, we discovered there didn’t really seem to be any true barriers. We say this because as long as a company could build a relationship with clients (clients being the event organizers) and the company could sell tickets or packaged deals at lower prices, the company could enter the ticket sales market and succeed. There aren’t high capital costs for online sales so companies could enter the market via the web. Ticketmaster is perceived to have extra fees with its sales so other companies could take advantage of this and offer lower fees. With little to no barriers to entry, customers have power because they can buy from other ticket sale companies and in doing so can challenge high...
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