Meet the startup that kept scalpers from buying up all the tickets to Adele's sold-out show
The harder problem for artists like Adele is making sure the people who buy the tickets are the true fans who want to see the concert and not the scalpers looking to make a profit off one of the hottest music tours of 2016.
To do that, Adele turned to a tiny British startup called Songkick.
The startup, which connects bands to fans, has learned how true fans behave and has built up a list of identifiable scalpers in its system.
The company actively tracks and maintains a listing of known scalpers who have used the site before. Artists also work with the company to provide their own methods of weeding out re-sellers, said Ian Hogarth, co-founder and co-CEO of Songkick.
Even with only a pool of 235,000 tickets sold through the site, the company identified more than 53,000 scalpers who were trying to get tickets and blocked them from the sale. The company now claims less than two percent of those sold-out tickets ended up back on the market.
"By selling the highest number of tickets we were able to through our own channels, and working with Songkick and their technology, we have done everything within our power to get as many tickets as possible in the hands of the fans who have waited for years to see her live," said Adele's manager Jonathan Dickinson in a press release.
It's a technological challenge to identify a true fan from a scalper, and in the end, the artist and fans both want the same thing: the tickets to be in the hands of the fans who want them most.
But when Songkick first launched, it didn't even have a ticket component at all.
Before Adele, it was not always about tickets
For the past eight years, the startup tracked bands, at first by manually uploading their concert schedules, and then alerted fans when their favorite band was playing near them.
The average concert is actually 40 to 50 percent unsold, Hogarth said. Artists who sell out instantly, like Adele and Paul McCartney are really a very small minority.
The other 99.9 percent of artists are still struggling to sell out at all, Hogarth says. Since artists rely on concert money as the majority of their income, they have to then raise the ticket prices to earn a liveable wage.
"Because no has solved the problem of getting everyone in the building, the net effect is that the prices just keep going up and up every year. We're trying to get to a world where every show sells out, and the event-goer is paying a reasonable price," Hogarth said.
Songkick wasn't the one selling the tickets, but Hogarth hoped that by making fans more knowledgeable that some of their favorites were in town, it would fill the concert halls.
That business grew, eventually leading to partnerships with Spotify and Apple Music, but the startup was still missing the other half of the coin, Hogarth told Business Insider.
It was only in June, after eight years of building the fan-side of Songkick, that the startup merged with ticketing site CrowdSurge.
"We're now the largest independent ticketing company in the world," Hogarth said. "We're at pretty meaningful scale. We've grown over 50% in the last year."
The growth has put some strains on the company. During the Adele ticket sales, some fans claimed they could see other people's information on their screen once they went to the check out carts.
"Songkick was responsible for selling 40% of tickets directly to fans, a portion of whom were unfortunately able to preview other users' shopping carts for brief periods due to extreme load. At no time was anyone able to access another person's password, nor their payment or credit card details (which are not retained by Songkick)," the company said in a statement at the time.
Why artists love them
One big benefit of merging with CrowdSurge was learning what the artists need. That helped the company make small tweaks. For instance, the company started talking to artists about "selling out shows" rather than "doubling the size of the ticketing industry." That made a difference when they're approaching artists - selling out a show sounds like you're emotionally invested. Doubling profits sounds like you're a manager.
"It tends to be the case that you're really good at understanding at artists, like a company like Bandcamp. Or you really understand consumers, like Pandora," Hogarth said. "I think what we're trying to pull off with our company is really unique because we're trying to be a company that understands artists and fans equally."
After all, musicians have spent the last decade getting steam-rolled and pummeled by online music, pirating, and streaming services. Some, like Taylor Swift, have openly challenged companies like Apple and forced them to change their ways.
Adele, an artist who is decidedly "meh" on streaming services like Spotify, has embraced Songkick because it puts her in charge of selling the tickets to fans rather than the venues. Coldplay and other artists recently published a letter deploring the rise of scalpers and asking for government intervention in stopping it.
"I want to see a world in which artists dictate more of the agenda of how music works on the internet, and it's a great thing that artists are finally standing up and doing that," Hogarth said. "I can't imagine a world 10 years from now won't control their tickets."
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