STEALTH MARKET
As a rapt audience of analysts and Net shoppers applaud Amazon.com's opening act ($45 million in losses, including acquisitions, on $154 million sales during Q3 1998), the main event in online entertainment is going largely unnoticed. It's online ticketing.
True, the revenues don't trump Amazon.com's. But the profit margins are much, much sweeter. Tickets, after all, are pure information - no troublesome inventory. Analysts at Forrester Research believe that by 2003, online ticketing will generate more than $2 billion in transactions - and they were revising that estimate up as this article went to press. Indeed, baseball fans provided some promising stats to Ticketmaster Online last fall when one in four seats for five playoff games at San Diego's Qualcomm Stadium sold over the Web.
It's little wonder online ticketing is so popular: QuickTime VR tours of venues certainly let buyers make more informed seat selections than they'd get glancing at 2-D xeroxes of stadium plans. Launched in '95, TicketWeb hit about $3.5 million in sales in '98, mostly for tickets to nightclubs. Its fees are around a third of those charged by Ticketmaster, but founder Rick Tyler says he's thriving anyway, largely by focusing on venues that slip by the ticket giant, and by going global. In October, Tyler announced the launch of TicketWeb South Africa.
Ticketmaster enters the fray with a staggering roster of exclusive contracts with pro sports and music arenas and the ability to charge $12 million for space on its home page. By merging with CitySearch and gearing up for an IPO, Ticketmaster is trying to fuse its infrastructure to a name-brand Internet regional entertainment guide. It may work. But the bad news is that so far the industry giant has not cut its famously fat surcharges - often 20 percent and up.
Yet if upstarts like TicketWeb don't crack Ticketmaster's monopoly - Ticketmaster Online rings up in a month almost three times what TicketWeb does all year - some other market makers might. Rather than sell tickets, Pegasus Internet provides online ticket-sales systems to cultural institutions like the Boston Symphony Orchestra and the New York Philharmonic, as well as Broadway broker Tele-charge.
Meanwhile, TicketsLive, backed by Intel and CMG@Ventures, is pooling zoos, college sports teams, Las Vegas hotels, and most of the museums in Florence, Italy, into a secure ATM-like network with multiple points of entry - including any connected box office, and ultimately your desktop.
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