TicketMaster: An Interesting Auction Model

Mar 13th

TicketMaster, a near monopoly which hated ticket auctions in the past, now auctions seats for a premium. You can bid on an auction for row 1, and if the minimum bid drops below the required amount to win they will automatically drop you into an auction for row 2, and so on. Imagine if 1 minute before the end of the auction you thought you were in row 1, and then in the last 5 seconds of the auction a network of scalpers bid and you got a notification that you were in row 4. Paying $500 for row 4 tickets could feel a bit salty, but I imagine that many flat priced commodities will eventually move to an auction model that finds a way to squeeze money out of people bidding on the most expensive item even when they lose. It makes them more efficient, but will also frustrate many consumers.

eBay the largest general auction site, bought StubHub, a leading ticket reseller site, earlier this year for over $300 million. SnapNames recycles domain names. Google makes billions hand over fist as an ad auction (and likely eventually a content auction and an attention auction). What other businesses do you see becoming more efficient or growing due to a web auction based model?

Published: March 13, 2007

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Comments

March 13, 2007 - 4:14am

I could see online used car sites (like AutoTrader.com) offering used cars on an auction. There would have to be some safeguards put in place to ease buyer hesitancy, but I think it could be done.

Also, it wouldn't shock me if airlines started putting premium seats on auction (similar to ticketmaster).

March 13, 2007 - 10:12pm

I've got to say that as someone who loves music and goes to a lot of gigs I really hate this. Tickemaster charge a fortune in commissions as it is; with this new auction method they have become nothing but legitimate ticket touts.

Billy B
March 14, 2007 - 7:50am

Not sure why you note eBay bought StubHub. Hardly any of StubHub sales are auction - they are almost all fixed price.

KBob
March 14, 2007 - 3:07pm

Real Estate; Real Estate; Real Estate -- see RealtyBid.com -- largest online real estate auction site in the U.S.

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