Stubhub Paper

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As StubHub grew they began to eat into the market share of the common place used to purchase tickets prior to StubHub being created, TicketMaster. Even when events weren’t sold out on TicketMaster, customers began to go to StubHub to get their tickets due to ease of use, advanced technology and familiarity. In addition, TicketMaster still holds the re-sell partnerships with NFL and NBA, but tickets for these evens are still sold on StubHub without official partnerships, and sales are greater on StubHub due to the advanced technology. Buyers gave StubHub and Ticketmaster almost identical favorability scores in a nationwide survey conducted this summer by Turnkey Intelligence in conjunction with Sports Business Journal. The survey, covering 400 consumers who bought tickets to at least one event this season, placed StubHub and Ticketmaster well behind the websites and ticket windows of their favorite teams, but far ahead of other sites, including eBay and Craigslist. This is expected as the websites and ticket windows of teams and venues typically sell at face-value, while there are no price limits on StubHub, and priced often exceed face value significantly due to high demand.

After being acquired by eBay in 2007, StubHub grew exponentially and were only at the onset of what their true potential was. At the time StubHub was only operating in the United States and Canada, with great success. eBay saw this as an opportunity to grow internationally, and decided to expand into Europe. StubHub.co.uk was launched in March 2012, and operates from London. In September 2015, StubHub launched in Germany, StubHub.de mainly operates from Berlin. Both markets greatly accepted StubHub and it was an instant success. Prior to StubHub opening their website in these geographies, there was no legitimate, public place for customers to go an acquire tickets. This only goes to beg the question, what about the rest of the international world? StubHub is trying to open its website in all major cities worldwide, but this is coming with much opposition, especially in China. Many are even question StubHub’s legality in the United States, stating that its business is ticket scalping, which is against the law, but StubHub has been able to avoid any major litigation issues. Currently, StubHub is eBay’s fastest growing business, generating 34% quarterly year-over-year sales growth and annual revenues of $725 million, roughly 8% of total sales coming from their two international sites. This leaves such a large opportunity for growth, if StubHub is able to expand into all worldwide markets.

To go global StubHub wouldn’t really need to do much work, other than implement their pre-existing website and technologies in the given location. The only setback is the opposition that the regions are giving StubHub, although executives believe after subtle negotiations, agreements can and will be reached in the long-term. When going global, I would recommend StubHub tailor each site to the major sports and events that are enjoyed in each given region. In addition, I would recommend that they conduct an analysis in which they determine what commission rates should be placed in each given region. Each region will be economically different, and buyers and sellers may not be as motivated to pay as high of a commission, or the commission may be too low, in which case they can increase it from the United States rates. In addition, StubHub should look to partner with all major leagues, venues and any other potential sources such as they did in the United States when they were first created. This strategy helped StubHub bring brand awareness and become a market leader in the United States. In order for digital companies to go global, they must first meet all legal requirements in the given regions based on the industry they are in. Each industry will differ and bring new challenges, although many of them can be overcome with the sufficient efforts.

Once an outlier in a sales channel that many in the industry dismissed or ignored, StubHub has graduated to the mainstream of sports and entertainment, viewed similarly to long-accepted ticket providers on the primary market. It sounds obvious enough today, but considering where StubHub started, and the polarizing manner in which resale has been viewed and discussed within the sports business, the rise is a striking one. Their brand was built from nothing and with legitimate partnerships and a solid authenticity guarantee; the heart of a company was build. This has paved the road for all the future ventures StubHub can engage in to build their worldwide dominance in the secondary ticket market industry.

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