The new venture tries to crack a tough business by allowing market forces to set prices.By Swati Pandey,
Los Angeles Times Staff Writer
September 9, 2008
Haggling over the price of a
concert ticket usually requires sending several plaintive e-mails to a Craigslist poster. But a La Cañada company wants to complete the haggling with a few simple mouse clicks.
Zigabid.com, which launches today in public beta testing, says it is the only ticket-vending site that lets buyers and sellers bargain over prices for tickets to concerts, sports matches and other events, all using a simple interface that allows for direct buyer-seller communication.
"If you're buying a car, you negotiate. If you're buying a house, you negotiate," Zigabid founder Dan Rubendall said. "People want to negotiate."
Although Zigabid's current inventory consists mostly of resale tickets from individuals and brokers, the company hopes to become a player in the primary ticketing market. That would mean taking on Ticketmaster and turning tickets into traded commodities.
The negotiation-based approach could help
sell more tickets, if at lower prices, which runs counter to the music industry trend of soaring concert ticket prices.
Ticket face values have more than doubled in the last 10 years, said Gary Bongiovanni, editor of the touring industry trade publication Pollstar.
But the primary ticket market is difficult to enter, said
Derek Palmer, chief commercial officer of
Tickets.com, which is owned by Major League Baseball.
"You have to have the technological infrastructure" to handle a high volume of transactions and deliveries, he said.
Analysts and other vendors were skeptical about Zigabid's ability to persuade promoters and artists to leave ticket prices to the marketplace. Analyst David Joyce of Miller, Tabak & Co. noted that venues and promoters usually guarantee an artist a certain gross. Zigabid's model would make that determination more difficult.
The company "would have to be patient and let promoters work this into contracts," he said.
Joe Cohen, a former Ticketmaster executive and founder and chief executive of London-based ticket reseller Seatwave.com, agreed but noted that the concert industry could benefit from innovation.
"There's a price at which every ticket will sell. To the extent that this platform can help discover that price, it can be useful," Cohen said.
Ticket prices have become largely inflexible -- tiered pricing started to take off in the mid-1990s. Prices in the secondary market are more variable, but Bongiovanni said some artists resent resellers who profit mightily on mark-ups.
Rubendall said Zigabid had received positive reactions from promoters.
The company also will return 1% of each ticket sale to the artist, and it plans to allow performers to set minimum prices.
Consumers benefit too, Rubendall said. Sellers don't have to guess what buyers will pay for a ticket, and buyers won't have to search several sites for the best value or wait till the close of an auction, because they can set expiration times on their offers.
The company charges sellers a 15% fee on each sale and tacks on 10% for buyers. For example, if a buyer and seller agree to a price of $100 for a ticket, the seller forwards $15 to Zigabid and the buyer sends the seller $100 and Zigabid an additional $10.
Zigabid isn't entirely opposed to a set ticket price. Rubendall said the company planned to offer an EBay-style "purchase now" price, but it remained more focused on the flexible price model.
