Monday, June 21, 2004

[Net Biz] NYT writes about StubHub, an eBay for event tickets:

StubHub.com looks like a ticket brokerage. It's not. The company, founded four years ago by a couple of Stanford Business School students, is a kind of stock market where the only shares traded are tickets to live events.
...
StubHub, which sells tickets to events all over the United States, does not buy tickets. Instead, it creates a regulated arena in which people who have bought tickets can sell them, and people looking for tickets can buy them, knowing that the tickets are genuine and that StubHub backs them with a guarantee.
...
Like the auction houses, StubHub makes its money by taking a cut from buyers and sellers, collecting 15 percent of the purchase price of the ticket from the seller and 10 percent from the buyer ... StubHub simply acts as a referee, making sure no one hits below the belt, and collects a commission for its trouble.
...
StubHub gives ticketholders a way to recoup some of their season's investment. This makes sports franchises happy for several reasons. It encourages season ticketholders to buy season tickets again, and it puts warm bodies in empty seats, where they can buy hot dogs, souvenir caps and programs. The teams also receive a percentage of the resale profits, usually 10 percent. So far, StubHub has signed agreements with nine professional teams in North America, and each team's Web site encourages season ticketholders to sell their extras through StubHub. Ticketmaster, eyeing StubHub's sports profits, recently jumped into the secondary market, signing similar deals with 20 professional teams.
...
StubHub also separated itself from the herd by offering a guarantee. Buyers will receive either the tickets they order or comparable tickets purchased by the company ... "If you open the package and it contains two squares of toilet paper instead of the tickets," he said, "then we debit the seller's credit card for the amount of the purchase."