Eventbrite is an effective online platform that enables organizers to very simply manage, market, and sell tickets for events. In the process, users save time in an otherwise logistically meticulous routine. But what value add does Eventbrite specifically offer? For the organizer, Eventbrite tracks the number of tickets sold as well as the number of people attending, and also displays post-event details and summary reports.1 As a self-service offering, the product streamlines the ability for organizers to promote events, while also seamlessly enabling end-customers to find and buy tickets.2 With this system, there is no longer the need for antiquated ticket sale tables, box offices, or manual entry for tracking or seating arrangements. And with the ease of Eventbrite’s user interface embedded with social media links, time and money can be saved by avoiding traditional marketing conduits altogether. If all these factors sound too good to be true for smaller coordinators like garage bands throwing concerts, independent chefs hosting cooking classes, or business students holding galas, that’s because it was precisely made for the layman!
Because the company’s operating model described above is fixed on the world-wide web, the cost structure of the business is mainly comprised of the staff salaries, system maintenance, and servers.3 As more tickets are sold on this platform, Eventbrite’s cost per ticket plummets with economies of scale. Lastly, because Eventbrite sells to a specific segment of customers, other companies typically associated with the same service such as StubHub (a marketplace) and TicketMaster (a ticket retailer for mega venues) are not a threat to expansion.2,4 In fact, the company reported a total of $2 billion in total historical ticket sales in 2013, 25% of which occurred in the last 6 months of the company’s 7 year history up until that point.2
Founded in 2006, Eventbrite raised $200 million in several funding rounds, including $60 million from Tiger Global Management and T. Rowe Price.1 In 2014 Eventbrite closed a series F at a valuation of $920 million by ThomsonONE.3 Gross ticket sales have grown significantly since the company’s inception, hitting $100 million in gross ticket sales in 2009 alone, then $1 billion in 2013, and $1.5 billion in 2014. As of 2014, Eventbrite is available in 7 languages and used in 179 countries.3,5,6
The firm’s business model revolves around service fees. However, users don’t incur costs to use Eventbrite in the form of monthly subscriptions.1 Instead, the company only makes money when an event organizer sells an actual ticket. When this happens, the company charges 2.5% of the ticket value, plus an additional 99 cents per ticket.1 If credit card processing occurs, then an additional 3.5% fee is charged on top of that.1 Regardless of price per ticket, the company caps its service fee at $9.95 per ticket and none of the above mentioned fees apply to tickets that are sold for free events.1 This charging structure directly complements smaller establishments, allowing them to save money on events with lower turn outs. Similarly, many students and small owners are able to host free events through Eventbrite either for educational or promotional purposes (e.g. – a professor lecture about digital innovation, or a bakery’s grand opening offer of free cupcakes for the first 150 ticketholders). Furthermore, additional features like the easy-to-use seat map creator allows organizers to sell to more customers with reserved seating at no extra charge (studies show that 3 out of 4 people prefer picking their own seat, and over 50% of consumers would pay 10% or more for tickets with this benefit).7 Eventbrite has also developed several applications.
The latest app was developed in late 2014, when it launched Neon, a one-stop shop to manage orders, track sales, check attendees, push last minute deals, and accept mobile payments.8 For a novice organizer, these additional features enhance the ability to hold successful events at no additional cost, subsequently ensuring a sustained competitive advantage. As they succeed, Eventbrite will likely form global partnerships with small to medium sized partners and start to become more of a threat to niche competitors – already signing a deal with Tough Mudder in 2013.9 As they scale, their fee-for-service business model will only become more financially attractive for entrepreneurial organizers as they effectively pay the same price for more features. If Eventbrite makes the right moves in terms of locking down exclusive agreements, who’s to say that one day they won’t be competitive against a ticketmaster that charges a much higher 15% fee per ticket?4