In less than 10 years Eventbrite has established itself as a major force in the ticketing industry. As it first mover in the space, the company has leveraged its product simplicity, low fee structure and self-service model to pose a credible threat to traditional ticketing players. By initially targeting smaller event producers, the company was able to build out its technology and product offering without initially competing directly with Ticketmaster and other incumbent players. And it’s low fees and self-serve nature opened up an entirely new market to service that previously had no easy way to digitally sell event tickets.
Longer term, the company’s ultimate goal is to become not just a technology provider for individual ticket sellers, but rather a robust discovery platform for consumers to find out what is happening in the world around them. In order to do that, they knew they first must have a critical mass of events on the platform, so the company initially focused on scaling up the outreach to and onboarding of event producers. In this way, once the critical mass was attained they could begin shifting consumer perception of the company away from a simple utility to sell event tickets to a consumer portal for event discovery.
This creates value for event producers as they now have a marketing platform that drives event attendance and surfaces their event to visitors of the site. And Eventbrite’s investment in technology drives the marginal cost of servicing another event to near zero, which then allows the company to charge fees much lower than the industry standard, and relying on high volume to drive profitability.
As a two-sided platform that connects ticket sellers and event producers with ticket buyers and attendees, Eventbrite has benefited from both direct and indirect network effects in several key areas. Directly, as more and more event sellers join the platform, consumers are able to derive more value from discovery as it is more likely there will be an appealing event that they would like to attend. And as more and more ticket purchasers come to the site to discover what is happening in their neighborhood or city, event producers will sell more tickets and increasingly regard Eventbrite as not just a way to sell tickets to their current customers, but also an indispensable way to reach new customers.
As for indirect network effects, the company has also dedicated considerable resources to build out their full-service event management platform, which includes on-site ticket sales and ticketing check-in at events. With these capabilities streamlined, the service becomes even more valuable to ticket sellers, who will then become even more reliant on the platform and less likely to look elsewhere for other ticketing providers.