THE FUTURE of TICKET SALES
Updated: Oct 2, 2020
This article was originally published on May 15th, 2019.
Few things outrank the win/ loss column for sports teams, however, one thing that would is ticket sales.
Teams have to fight harder than ever before to keep the attention of fans, with many teams seeing a slump in ticket sales.
There are countless ways for fans to consume sports content. Therefore, teams are developing new innovative strategies in which to engage their fanbases, in a bid to keep their stands full, while competing with a wide variety of entertainment options at fans' fingertips.
The sports ticketing market is valued at around $20billion, across both the primary and secondary markets.
In the U.S., an average of between 25-35% of tickets to professional sporting events goes unsold. Forcing the ticket sales departments in sports organizations to change significantly in response.
Pat Fitzgerald (@coachfitz51), head coach for Northwestern football decided to blame the younger generation of fans for unsold tickets.“I think phones and technology have been the decline in attendance, number one,” he said.
“I think the fans who grew up going to the games and tailgating, the fans who grew up going to the stadiums four hours before the games, are getting a little older,” Fitzgerald added. “I think the younger generation of fans [is] more reliant on technology. They’d rather have 12 TVs set up in their TV-watching cave than go to a game and experience the pageantry and the tailgating. I think it’s definitely things we need to look at as a brand, [as] college football…”
In Europe, ticket sales are far more valuable for a number of soccer leagues, such as Scotland, where 43% of a team's revenue comes from ticket sales.
Back in the U.S., MLB has seen attendance fall to the lowest level since 2003. In 2018, teams such as Baltimore, Miami, Minnesota, and Pittsburgh each posted new lows for their current stadiums.
“One of the things I think we need to get collectively better at, and represents a huge opportunity for us, is working with the clubs on things like how we time and stagger outbound emails and push notifications to fans. We don’t want a situation, for example, where a team is sending something out and we’re coming in right after that,” said Jill Krimmel, StubHub general manager of MLB, NCAA, and other sports.
“We haven’t yet reached a point where we are maximizing all of what we can be doing together. But we’ve started a series of conversations and meetings with the teams to plan for 2019 and are optimistic about where it’s going.”
In the MLB and other leagues, attendance remains a vital indicator of the league’s health, and that of the sports industry at large. Baseball more than others due to the larger ticket inventory than it has over any other sport and ticket sales have traditionally represented the league’s largest individual revenue source.
Traditional ticket selling techniques focused mainly on sales calls.
However, this approach in the current market is failing. Despite almost all adults in the U.S. having a mobile phone, fewer than 30% say that they would answer a call from an unknown number. This would again drop to 7% if the call came from a toll-free number, or 13% if the call came from an out of state unknown number.
“It’s no secret that it’s almost impossible to sell tickets by cold calls anymore, so I think we’ll look to other pipelines to have conversations with our customers and prospects. As mobile technology is being used more and more for access control, I think we will start focusing on that for talking with customers. I see a ticket office employee answering customer texts or using a messenger application during a load-in for an event, offering an upgrade to a customer, or even fixing an issue without ever being face to face,” says Jonathan Boulter, Associate Director of Patron Services for the Moss Arts Center at Virginia Tech.
The idea of a sales call is not yet dead for ticketing departments, but they are definitely on life support. Sales teams are now having to move to where the fans are online.
Now, most tickets are now sold online, through e-commerce sites, advancing the growth of secondary market sites such as StubHub, SeatGeek, and Ticketmaster. It is now made it easier to purchase last-minute $10,000 suites, with sites such as SuiteHop.
This move to e-commerce sales might see the move away from the idea of the physical ticket office. “Can we start to get away from the ticket office windows and the old speakers that create a barrier between our guests and open up more ticket counters and ticket lobbies, where our employees are able to have more direct contact with the customer? Since the technology is taking the customer away from having to purchase tickets in person, this may allow the interactions to be more about the upgrades or fixing issues in a more pleasant space,” Boulter added.
The ticketing industry is getting smarter, more personal, and more mobile. By 2023, digital tickets are expected to account for 73% of all tickets at sporting events.
Social Media tools like Facebook, Instagram, and Twitter are proving to be effective tools to keep fans informed and for building and maintaining two-way relationships. Despite social media remaining a difficult tool to measure return on investment, it has become a powerful mechanism for storytelling and interaction.
Arizona State University associate athletics director Becky Parke says ASU was among the first colleges to create a specific social media position within its athletics department. "We have put a lot of resources behind our social media efforts, which include interacting with fans, in-game presentation integration, and boosted posts meant to drive ticket sales," she says.
The move into digital is revolutionizing the ticketing industry, although a benefit for sports teams is that it opens up the opportunity to collect data on the team's fans and create predictive models for potential customers.
According to Bill Fagan (@billfagan), COO for the Aspire Group, the main goal in ticket marketing is to retain fans.
“If we’re losing existing fans, ticket holders or donors or whoever, then we’re never going to grow,” Fagan said. “It’s very challenging to acquire new fans. Analytics indicate that if you’re not retaining at least 85 percent of your fans, you won’t get back to your previous year’s total.”
Finding and retaining fans is particularly important for teams that may be struggling to earn wins, Fagan said.
“Hope is not a strategy, and winning is not a strategy,” he said. “You can’t just hope that team is going to turn it around. You have to work twice as hard to retain people and make sure you don’t lose them. There’s nothing more important than taking care of the people that are attending.”
MLB teams especially have jumped on board with collecting data, with many accelerating their analytics efforts to better understand fan sentiment and develop new sales tactics.
“We’re continuing to spend more and more time collecting data and trying to learn who is buying our tickets, how they’re using them, why they are coming, what they want out of their game experience, and so forth,” said Andrew Miller, Toronto Blue Jays executive vice president of business operations.
Furthermore, the move toward digital ticketing is going to crack down on ticket touts reselling tickets outside stadiums at highly inflated prices.
Millennial and Gen-Z fans are at the center of all the major changes happening in the sport and the ticketing industry, between mobile ticketing, social media-based selling, increased in-venue engagement, seat upgrades, more powerful tools for event discovery, and last-minute offers, the millennial and Gen-Z audience stands at the heart of all them.
“This audience presents huge implications for our entire product road map moving forward, and how we service our customers. It even influences our [merger-and-acquisition] strategy,” said Howe, formerly an executive with Ticketmaster parent company Live Nation.
“A lot of these things represent really big pivots from where we used to be as a company. This group of consumers is even more engaged in live events than their predecessors. But they have a very different set of needs and have exposed a crucial need on our part to find new ways to reach them.”
The millennial generation represents a quarter to a third of their overall revenue base for many sports organizations, therefore it is unsurprising that the industry is changing.
“This is a very valuable audience, and obviously the future of our business,” said Brendan Donohue, senior vice president of the NBA’s team marketing and business operations group. “But they consume content and consume live events differently. It’s a unique audience that requires some non-traditional tactics.”
Teams are now even altering the design of their facilities to offer more standing-room areas and other less conventional gathering areas, which have proven popular with the millennial and Gen-Z generations.
MLB team the Colorado Rockies’ Rooftop party deck, is one such example that has proven popular with general admission tickets and a variety of craft beers and local food on offer at the party deck.
“If we expect this group to just go to a game, sit down and watch, we’re really missing the boat,” said Dave Butler, chief executive with Paciolan.
As sports teams fight against entertainment tools such as Netflix for the attention of younger fans, many organizations have chosen to be inspired by the Netflix model.
With many MLB teams developing a monthly subscription pricing model, creating one of the biggest shifts in ticket sales strategies within baseball.
Out of the 30 MLB teams, 22 now offer Ballpark Passes, in some form or another. This type of ticketing model generally provides access to all home games for a flat monthly fee or offers fans a set number of games for a heavily discounted price.
“It’s modeled like a gym membership with reserved seats serving like a personal training session,” said A’s Chief Operating Officer Chris Giles (@chrisgiles01). “It is designed for a flexible experience.”
Ballpark Passes were first introduced in early 2015, by a small number of MLB teams, including the Oakland A's, Atlanta Braves, Chicago White Sox and Texas Rangers. Initially, the passes were dominated by the lower-attendance teams seeking to experiment with the technology and sell some lower-demand ticket inventory. However, higher-attendance teams such as the Giants and Cardinals, making the mobile Ballpark passes commonplace throughout the league. During the 2017 MLB season, over 500,000 tickets had been sold through a Ballpark Pass product.
“So much of commerce is happening now on a subscription basis that it isn’t surprising that it’s now translating to baseball,” said Joe Strohm, St. Louis Cardinals vice president of ticket sales.
The Oakland A's whose attendances are generally close to the leagues worst witnessed a growth in demand to attend games due to their Ballpark Pass product. This popularity led the A's to cap sales, of their $19.99 per month for standing-room access Ballpark passes, after just one week in 2017.
“We really feel this program has the ability to complement our core product offerings for years to come while attracting a new audience to the ballpark,” said Steve Fanelli (@stevefanelli), A’s vice president of sales and service.
Another benefit that the MLB has found with the Ballpark Pass products is that they have predominantly been purchased by the highly sought-after younger consumers. The most popular age range for a Ballpark Pass buyer is 26/27, followed by 24/25, the next top six age ranges all fall under the age of 40.
“This has been a really important development to create a new entry-level ticket product in the sport, particularly for fans who haven’t previously engaged with us,” said Mark Plutzer, MLBAM vice president of ticketing.
The MLB is also playing with the idea of experimenting and a potential blending of the Ballpark pass product with a higher-end one such as luxury club access.
“Is there a way to put this together with a more corporate product where there is monthly access to some type of club?,” Plutzer said. “We don’t know yet, but there are some potential areas where we can take this concept.”
The subscription model has even been adopted by a number of NBA teams including the Sacramento Kings and the Milwaukee Bucks. As well as being spotted being offered by the Los Angeles Rams during their route to the Super Bowl last season. The team managed to sell several hundred of the passes last season and have been able to convert about 66% of them into full-season-ticket holders for this coming season.
“We looked around the marketplace — we’re always trying to see what’s out there and what can entice more fans — and given that we’re still new to the market, we saw this as an opportunity [to create] almost a teaser for season tickets,” said August, who added that sales are predictably going well overall for the coming season after the team’s success last year. “It was an opportunity to get people out to all the games but without many of the benefits that come with season tickets,” said Dan August, the Rams’ vice president of strategy and ticketing.
Another type of subscription model was trialed by reigning NBA champions, the Golden State Warriors, who began offering fans "In the Building" passes. After registering 300 consecutive sell outs back in November, the Warriors created the "In the Building" passes, for the 44,000 supporters currently on the teams waiting list for season tickets.
The "In the Building" passes offers Warriors fans to join the party at the team's 19,596-capacity Oracle Arena on game days, for $100 per month. Despite fans forking out $600 over the course of the 6-month tickets, the passes don't include seating or the ability to see the court. The passes allow entrance into two bars and a number of concession stands in the arena's Club 200 level where fans can get food and a drink. Fans also have the chance of receiving one of the Warriors giveaways, provided they're one of the first 10,000 people through the gates, but that's it.
Lisa Goodwin (@lisamgoodwin), senior director of corporate communications at the Golden State Warriors, told BBC Sport: "With the interest in attending Warriors games at an all-time high, this product was created to allow more fans an opportunity to experience the excitement inside Oracle Arena.
"In part driven by the 300th consecutive sell-out and our 44,000-member season ticket waitlist, along with our year-long celebration of our 47 seasons at Oracle Arena, this subscription-based product will allow us to provide pass holders with an opportunity to attend games at Oracle Arena and enjoy the energy inside the arena with other fans."
As sports teams build new arenas and stadiums that include far more communal and open areas within the facilities, it is safe to say that we will see a strong trend toward the subscription ticketing model.
“With more open designs, people aren’t as picky anymore,” said Jacque Holowaty (@jholowat), vice president of client experience and ticketing at Spectra. “They are more flexible and they want to be more social.”
Another type of ticket that is becoming a trend within the sports industry is. the inclusive ticket.
Starting in the 2020 NFL season the San Francisco 49ers will introduce a plan that will include food and beverage in the cost of a full season ticket package. The deal which was struck with their hospitality partner Levy, the 49ers will now include 15 popular concessions options, exempting alcoholic drinks and specialty food items, in the cost of season tickets.
“As we’ve seen others in the market move towards street-level pricing—you saw Atlanta do it, you saw Detroit do it, you saw Baltimore do it—there was pressure in the organization to follow suit,” says Moon Javaid, the 49ers’ VP of business strategy and analytics. “We held firm in saying, ‘We’re thinking about something bigger, something different, something more unique that’s going to take time for us to fully develop it out.’ ”
Though all-inclusive season tickets might offer teams elsewhere a way of pulling in new sales, Javaid explains that the 49ers already have nearly perfect renewal rates at 98%. Instead, the focus is on continuing to improve the experience for existing members. "We’re doing it because it’s the right thing to do for our fans,” he says.
Al Guido (@AlGuido), President of the 49ers, mentioned how critical technology is becoming for engaging sports fans. A fan often commits 6 hours of their day to the game-day experience, and yet there are only roughly 30 minutes of “hero moments” on the field. Therefore, keeping people engaged and satisfied the rest of the time necessitates the need for the type of all-encompassing in-stadium mobile technology.
The introduction of apps for facility entry, food and beverage in-seat delivery, seat upgrades in-game, security, wayfinding, loyalty programs, and watching video content, will become the next big change. Even the introduction of Virtual Reality is becoming increasingly accessible, no longer knocking on the door but pushing its way into sports arenas.
However, it is important to never forget in the midst of all these changes is the magic of the games themselves. As sports organizations continue to fight with seemingly endless streams of content and increasingly selective media consumers, it is important to sell the unscripted, live-action with unknown finishes.