Anytickets And The Rise Of The Tertiary Ticket Market

How is it that Anytickets, a company you’ve never heard of can project $200 million in annual ticket sales or more this year, and $300 million plus next year, particularly in an industry covered as deeply as tickets? If you have ever tried to buy a ticket, imagine that challenge times a million. Then, try to account for, allocate, price, and deliver those tickets.

Once it was easy. Tickets were sold by promoters at venues they booked. Over time, intermediaries realized there was a space for them. Companies like CompuTix and Ticketron built technology to manage the inventory in a venue and arrange delivery of tickets to fans while charging the venue a small fee for their service.

Next came the transformation of ticketing as Fred Rosen built Ticketmaster with twin innovations. First, rather than charging the venue to print their tickets he added a service charge to the price of each ticket and shared that money with the venue. This changed ticketing from a cost item to a profit center for venues. Rosen’s second, and equally transformative insight was to make sure that tickets were scarce, so whenever a potential buyer was able to get a ticket from a ticketing machine, telephone agent, or later across the internet, they bought it knowing that otherwise they’d be out of luck.

That’s when the law of unintended consequences kicked in. When Rosen and Ticketmaster made scarcity a tent pole of ticketing practices, it created a marketplace of people who became skilled at buying tickets. These ticket buyers were able to make money buying tickets, then reselling them by building relationships in their local area as someone who either had or could get tickets.

Naturally, as technology progressed, entrepreneurs figured out that there was a more efficient mechanism for ticket distribution. From that insight came the secondary markets like StubHub, Vivid Seats, SeatGeek, and TickPick where ticket buyers could post their tickets for sale and the secondary markets would blast advertising around the world helping to get those tickets sold, all for a percentage of the sale price.

The concentration of market power among the secondary markets created a new power dynamic in which selling tickets became the game of secondary markets, and ticket buyers went back to figuring out how to become more efficient at acquiring tickets.

Again, innovation percolated. Companies figured out ways to increase their efficiency buying tickets, and their capacity to allocate capital so they can purchase seasons, personal seat licenses or simply hold inventory for more events.

This next evolution is the tertiary market. It is the market in which supply is aggregated for distribution to secondary markets. It is the market where when ticket prices fall, consumers get a discount because of the losses taken from these purchases. It is the market which makes it possible to get a ticket for almost any event as late as the scheduled start time because someone else put up the capital to own and hold a ticket until then. It is the market in which Anytickets excels.

Anytickets is a Houston based company owned by majority partners Marcus Stern and Chris Bonner, along with Deric Margolis. These partners along with key team members David Jacobs, Matt Moran, and the rest of their nearly 30 employees are utilizing technology to facilitate supplying resale markets. Anytickets builds custom software to manage their ticket inventory and in conjunction with data scientists to project value across the timeline from the date the ticket is bought until the date the event occurs.

In addition, Anytickets partners with teams, promoters, and rights holders along with their handpicked leading ticket buying partners from across the country to purchase tickets for concerts, theater, and sporting events. Because Anytickets is aggregating experienced ticket buyers alongside their own internal staff, they have a broad perspective across the ecosystem on where demand lies and how prices are moving. Because of Anytickets’ historical success, they have been granted a $40 million line of credit to use in purchasing tickets and are now being offered various investments from private equity firms seeking returns in a world in which financial markets offer low yields and little downside protection.

I spoke at length with Marcus Stern about Anytickets. We talked both about the way his business operates now, and about what it was like for them running into the pandemic at full scale as events were cancelled everywhere in the world and stayed canceled for more than a year. This was the litmus test which Anytickets faced: revenue plunged to near zero while operating costs continued. Tickets which had been sold had to be refunded, and the profits from sales of events yet to occur had to be returned. The entire industry faced this challenge. Anytickets had the additional pressure of a $25 million dollar line of credit which had to be reduced.

Marcus explained how they scaled back the staff and worked to refund and recover money. They maintained their reputation with their partners, and they were able to get their bank to slowly return their credit line as ticket sales started to resume in 2021. Now, Anytickets has a bigger line than almost anyone else in this space and continual inquiry from potential investors.

This rebound comes both from effort the Anytickets team put into rebuilding their brand as ticketing resumed post pandemic and because Marcus is so enthusiastic it’s hard not to get swept along as he describes his plans. Marcus was one of the people selected for my best of 2020 list:

Talking to Marcus is always fun. Our conversation is below in both video and audio podcast format. Don’t miss this one.

There are certain truisms in life. One is that innovation should never be a surprise, it’s a certainty. One is that you must always be honest with your partners. And perhaps the truism which most often motivates investments is that you’ll never be wanting if people like you. People like the team at Anytickets. They’ve grown their company by being smart, honest, and authentic. Apply that formula to almost any business and it too will soon grow into an investible opportunity.

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