Foolish the man who underestimates his competitor, and, over here at Seatwave, we have long worried about Viagogo. However so far we have been more than holding our own, and frankly been a little underwhelmed by what we originally feared was a mighty opponent.
Danny Rimer is not exactly a flake and the company has reportedly raised a cool $50m, so we are not resting on our laurels; but so far we have reliably been out executing them, at least based on what public info we can get our hands on.
Viagogo as a project started life some time in 2004 after Eric Baker fell out with Stubhub CEO Jeff Fluhr. I have written about Viagogo, first positively, then negatively, as I have learned to know the company better. For a while its headline deals had everyone convinced they were unbeatable. But that has changed.
UK concerns
Check out the surprising and drastic fall in UK market share. From Hitwise numbers of 3.8% in April, the company has now fallen to 1.7%. I read Eric Baker's rebuttal to these numbers in a recent RealDeals article (RealDeals: Music for Two, Peter Kneller, 16 October 2008) saying he cared about ticket sales and not traffic, but (unless they sell a ton through third parties), sales = funnel X conversion last time I checked. Whilst Viagogo may have some white label deals, correlation is bound to be fairly high. And some of that is going to be ManU Exchange traffic where tickets are typically £10-20. Great...
Anyway that's fairly dramatic fall as Viagogo now trails the two Ticketmaster properties and is at 40% of Seatwave on this Hitwise data.
US progress
On the plus side, Viagogo has truck some eyecatching deals. They have launched in the US with the Cleveland Browns and signed a deal with Madonna on her last European tour. Great, eye catching stuff. But the results don't seem to be that obvious.
- US market ROE ? Despite the fact that the Cleveland Browns deal was done in April 2007, I understand that Viagogo does not yet show up on the top 10 of ticket resellers in the US. What good is it to be a subscale player in a market dominated by eBay ?
- Madonna ROE ? The Madonna deal has raised some eyebrows. The RealDeals article finds Eric Baker surprisingly defensive: "we were on the radio ads, the posters, the website -- that was a profitable deal for Viagogo". Here is how I am reading this: "we did not actually make money on the tickets and we are hoping that visbility and brand anwareness will make up for it. I also notice that Guy Oseari, Madonna's manager, has joined the advisory board.
<--- Don your helmet, 2009's going to hurt
<--- #1 in the music bizz for a reason (and doing dumb deals ain't it)
To be honest, that Cleveland Browns deal was just the ticket to push Joe Cohen's buttons. The Seatwave founder is a Cleveland native and hasn't quite yet gotten over it :-)
German stumble
One country that seemed to be doing very well for Viagogo was Germany. Latest Alexa shows a clear softening, probably related to a slowdown in advertising efforts as the company moves to conserve cash. I don't know much more than that, except that given the Quantum of their fall eslewhere, Germany is no source of Solace.
On top of that, we have just hampered their ability to compete in Holland with the acquisition of Skelper.
Conclusion: market share drop in UK, limited penetration in US, uncertain progress in Germany. It's a marathon, not a sprint, but so far we have spent less gas and travelled further. Let's see what the next uphill brings us.
And for all those who get impressed by large fundraisings, it's worth remembering that capital efficiency wins the day, not capital.
[PS: I was pissed off when I wrote this post -- for good reason -- so I revised to tone it down 02/09]
Help me to resolve this contradiction: Viagogo is struggling behind the others in the UK yet if the figures in yesterday's Techcrunch article are to be believed, Viagogo sold nearly US$100M in tickets in 2008 AND savvy venture capitalist Danny Rimer invested more money in COMMON STOCK (could it be true?) at a US$300M+ pre-money valuation. It just does not make sense...at least, not to me. What do you think?
Posted by: Michael Phillips | February 06, 2009 at 04:14 PM
I believe that indeed all stock is common stock. Preferred stock is usually driven by the desire of investors to ensure that minimum return hurdles are hit; with an entrepreneur as ambitious as Eric Baker, there is probably no concern that he will be driving for a large exit. It is also down to negotiation leverage and I guess he just dictates his terms.
I think the revenue number is very hyped (my estimate is 2X over the real number).
Posted by: Fred Destin | February 06, 2009 at 05:21 PM
I bought 2 tickets from VIAGOGO at £140 each plus £42 booking fee last year (via Paypal) for the Clapton concert at the Albert Hall.
Tickets:
Section circle, Row , (2 Ticket(s))
Date: 16 May 2009, 19:30
The tickets have just arrived (in a hnd written envelope with no covering letter/comps slip), but they are £65 tickets, not £140 as sold.
(£280.00 Booking Fee: £42.00 Delivery Fee:
£4.99
VAT: £8.22 Discount: -£0.00
Total Charge: £335.21)
The tickets I received are only valued at £65 each, which seems like a huge mark up when charged out at £140 per ticket plus £42 booking fee?
Posted by: C Kelly | April 27, 2009 at 09:15 PM
Mr Kelly... that would be because they're sold out tickets!
If you want to buy tickets at face-value prices you have to be quick.
More and more these days people are turning to the ticket exchange sites (seatwave/viagogo/getmein) - it's a shame people buy tickets with the sole idea of selling them on at inflated prices.
Posted by: Gig Lover | February 24, 2010 at 10:50 AM