Eventbrite announced their third quarter earnings yesterday (11/1/23). We track them closely as they are the largest vendor in the ticket market and their results are public, so it serves as a good benchmark for our business. You can view their various documents via these links:
They emphasized their improving Adjusted EBITDA (earnings before Interest, Tax, Depreciation and Adjustments). They are doubling down on three key strategies to increase profitability:
Take Rate
Take Rate rose to 9% of ticket transaction volume, a record. This is due to several items:
- Price increase last January. They have raised their price to $1.79 per ticket and store item plus 6.6% including credit card fees. This compares with TicketSignup’s pricing of $1.00 per transaction (not per ticket or store cost) plus 6% ($0.80 plus 4.8% if you have over 5,000 tickets across your event portfolio).
- Subscriptions. Eventbrite rolled out a program in September where all customers over 25 tickets pay a subscription fee for email and social sharing and ad placement services (which are charged separately). They maintain that these features are needed by events and events should be happy to have them. These features are included in TicketSignup for free with unlimited email contacts and sends.
Marketplace Advertising
- Advertising. Eventbrite reported they generated $2 Million from ads in Q3. Their sales and marketing costs increased by 45%, mostly for basically doing advertising to drive people to Eventbrite’s site and pages that Eventbrite has sold ads on. Julia described an example – “One example is our September GTFO and Date campaign, where we predicted fall dating trends and teamed up with the Bachelorette’s Tyler Cameron to spotlight unique data ideas and drive viral influencer content on TikTok and Instagram.” TicketSignup does not sell advertising as we feel there is not value in being a “middleman” between the true source like TikTok, Instagram and Google.
Cut Jobs and Offshore Development and Support
- Layoffs and Offshoring. Lanny said on the call “We’ve successfully shifted a meaningful proportion of our product, development and engineering teams to Spain and India.” By comparison, TicketSignup has all US employees and have only lost three developers in the past 14 years. TicketSignup feels there is great value in domain, code and co-worker knowledge and comfort that produces a better product for our customers.
- “Restructuring”. Lanny stated “Regarding the restructuring, we’re tracking to plan and expect total restructuring costs of less than $20 million for the year. Consistent with our initial expectations, we anticipate roughly $13 million to $14 million in annual operating costs to be freed from our expense base, a portion of which we intend to reinvest in talent and product.”
RunSignup | TicketSignup is significantly smaller than Eventbrite, but we keep track of how many times our size they are as well as our growth relative to a 2019 pre pandemic baseline in these charts:
This chart shows that Eventbrite got back to the same level of gross profit they had in 2019 in Q1 of 2023 and is currently at 114% while we are at 227%. Part of this is that Eventbrite made decisions to get out of certain markets and lay off 50% of their staff in March, 2020 when the pandemic hit while we kept our entire staff (who all took 50% pay cuts instead of doing a downsizing) in March, 2020.
Eventbrite sells about 10X the number of tickets we do. If we compare US only ticket sales since TicketSignup and RunSignup are only in the US, the number falls to about 7.5X our size. We are steadily growing our ticket volume faster than Eventbrite:
Summary
Eventbrite is obviously the big dog in a very crowded ticket market. They will make Wall Street very happy with their price increases and offshoring to lower costs. Their stock price has recovered and is up nearly 5% today after a tough day yesterday:
However, their shift to focusing on profitability and “take rate” presents a long term opportunity for TicketSignup. If we continue to have a better product at a far lower cost and far superior service and domain knowledge it will attract more and more event customers who might not welcome the changes from Eventbrite to increase their “Take Rate”.