Monday, December 6, 2010

Part III of the Stub Hub discussion and special deal

Refer a friend or Colleague who uses STUB HUB. If there total order is over $200 and they agree to send us an email confirming a previous Stub Hub purchase, we will send you both a $50 gift card from Musical Chairs. They are welcome to take us up on the first guarantee as well.

Getting back to an overall comparison, The second thing we can focus on is service. Stub Hub is a brilliant marketing company, but the service providers there know very little about attending events. In law school (I practiced law in my previous lifetime) we used to speak of Widget Sellers. Stub Hub is the proverbial widget seller. They market excellently, but know little about what they are selling (they don’t own it, they are just facilitators of a transaction). The least experienced salesperson at Musical Chairs has been selling tickets for a minimum 20 years. Each person here has been to a minimum of 30 venues and I personally have been to approximately 100 worldwide (just for fun I counted 14 baseball stadiums and 11 hockey arenas including the Olympics). While service is certainly subjective, we objectively have substantially more knowledge in making consumers have an informed choice when deciding on what tickets to buy. Moreover, I would be hard pressed to enumerate how many hundreds of people I have given shortcuts that have saved 100s of hours of time to venues such as the Hollywood Bowl, Dodger Stadium, The Honda Center and Angels Stadium. Try getting the directions through Stub Hub. I am sure they will refer you to mapquest.

While we understand that some people don’t want any of the service they PAY FOR, we feel it compares favorably with Stub Hub. It does not have all the bells and whistles, but it is fully as functional and is AT LEAST as easy to navigate. One nice thing as compared to Stub Hub is there is NO 10% service charge which we have always felt as odd (after all, what other product do you go to the cash register and they say 10% please . Could you imagine if they did that in a Grocery store or your favorite Dept Store). It is a great (deceptive) way to look cheaper when people do comparison shopping on the internet. They pioneered this in the ticketing business and other ticketing websites have copied this tactic. Moreover, many now actually list a price under what is being charged to them and add a service charge which is as high as 28% (article for another day).

Finally, there is the very passion we have for the business that does not exist at Stub Hub. They have lots of money behind them and some very brilliant and frankly nice people who work there. Howver, they are all one e-commerce job away from their next job. Our passion is one of our differences which we translate into service. Everyone who works for Musical Chairs does so because of their passion for attending live events. Many of you know my personal story (From lawyer to scalper), but if you don’t feel free to ask. I would be happy to discuss it over a meal (our treat). SH was started by a brilliant Stanford Business School student named Jeff Flohr with a penchant for marketing. It was done strictly for money as evidenced by the sale of SH to Ebay a few years after it began. SH is managed almost exclusively by ex E-bayers (maybe we will see Meg Whitman rehired to sell tickets at SH). SH is led by Chris Tsakalakis, a brilliant gentlean as well as a tremendously nice guy. Nevertheless, nothing about his love for tickets or going to Live events got him involved with SH. He ran Ebay Stores and spent 19 years in the internet world. His passion seems to be in growing internet companies. He is GREAT at this, but that often does not translate into great customer experiences. If you look up and down there roster of executives, they are ALL internet experts. This is terrific for growing internet business’ but often does not translate into passion for tickets. Try calling Stub Hub and see for yourself! 1-866-788-2482. Try calling Musical Chairs 800-659-1702.

Very little of the above is subjective, so we offer you to take us up on our guarantees to you.


We are so sure we can give you a better deal than you get from STUB HUB that we will GUARANTEE a minimum $5 per ticket less on ANY ticket costing $100 or more you see on STUB HUB. If we believe, IN OUR DISCRETION, that we can get you better tickets (which means a seat equal to or closer to center and in a row no higher than you originally wanted for a football, basketball or hockey game OR closer to the stage in a row no higher than offered by Stub Hub) shipped within three business days or within the period mentioned in conjunction with the Stub Hub tickets, we will take your order at that time for the Stub Hub price. If we believe, in our discretion, that we can not do better than the Stub Hub offering, we will order the tickets for you from STUB HUB AT THAT MOMENT, send you the tickets directly from Stub Hub (or the email from them stating the tickets are not available), and include a $20 bill for your trouble or a $50 gift card (your choice) assuming Stub Hub confirms the order. If Stub Hub fails to confirm your order, no obligations on your part. We will try to get you a similar ticket and you will likely never use Stub Hub again (confirming the point I made above). IN SUM, you either get a better set of tickets for the same amount of money or less which Stub Hub offers OR you get the Stub Hub tickets and $20 or a $50 gift from us.

Stub Hub - Client or Competitor?

One of the most common questions Michelle and I are asked when we are socializing is: Does Stub Hub “hurt” our business. It is a difficult question to answer since Stub Hub has become our number ONE client! In the last 365 days they have purchased almost ¾ of a million dollars from us. They are for the most part very easy to deal with. We pay no credit card fee, get paid effortlessly and accurately, and it takes very little effort on our part to deal with them.

Conversely , we have, on occasion, shipped tickets to people we know to be on our database. We don’t look super closely, but we have to assume that many any other people, especially non regular buyers who buy 1-2 times a year or less may have purchased tickets from Stub Hub. Not knowing the exact count, we are still under the assumption that it is a positive to Musical Chairs to have Stub Hub as our client/competitor.

Two things a consumer focus’ on is obviously price and service. With regards to price, Stub Hub is cheaper in some instances but more expensive in most instances. Stub Hub does many things brilliantly and one is there primary marketing slogan: FAN TO FAN. When they began using FAN TO FAN they got approximately 85 percent of their tickets from ticket brokers and they now get approximately 40-60% from brokers . Of course, I am a huge fan in many regards. However, I don’t think that is what you the consumer had in mind when buying “fan to fan.”

The question this raises is when is Stub Hub more expensive and when are they cheaper? First, we will let the information out of the bag and let you know that when a broker exports their tickets to Stub Hub (the Stub Hub term is Large Seller) Stub Hub marks the ticket up 15% (although at brokers option they can lower that rate as long as they are willing to pay the difference to Stub Hub out of their proceeds). Thus, if I list a ticket for $100 it lists as $115 on Stub Hub. Famously, Stub Hub adds their 10% “Service Charge” thus making the price $126.15 per ticket. Since our mark up above “wholesale” is normally 10% for tickets we inventory, Musical Chairs would charge $110 for that ticket. Since we charge approximately 15-25% above wholesale from other brokers, we would sell that ticket for $120 (20% mark up on a $100 ticket). Moreover, if it were emailable we would email for free saving the consumer another $5 (stubhub tacks on $4.95 for emailing tickets).

Slightly off topic, but relevant to sellers and the “service charge” is another marketing (deceptive) tactic. If a seller lists a ticket for $100, SH states they keep 15%. Thus, SH keeps $15 and the seller keeps $85. Calling said spade a spade, if Stub Hub adds a 10% service charge, is Stub Hub actually charging $100 or $110 per ticket. The way I see it they are keeping 23%, not 15%.

Since 40-60% come from fans (many of these are actually home brokers-brokers who work from home and don’t keep regular office hours etc), the question is will these be cheaper than the brokered tickets. Stub Hub works differently with “fans” (Non Large Sellers). They take a 15% charge from the amount a person asks. Thus, if a “fan” asks $100 they give me back $85. The cost to the consumer is $110. Undoubtedly, some of these fan tickets will be cheaper. Truth be told, on occasion, on some big events we actually arbitrage tickets off of Stub Hub. Since Musical Chairs is run like a commodities brokerage (which in essence, it is), a few of us can look through a list of tickets very fast and pick out an excellent deal. Nevertheless, since most people tend to believe their own assets are worth above market value (read: Predictably Irrational-The hidden forces which shape our decisions) the number of excellent deals and especially arbitrage opportunities are rare and time consuming to find. If you have the time get a quote from us and compare it to the prices on Stub Hub (please don’t forget to add the 10% “service charge”). It is RARE you will get a better deal.

Let’s say you get a better deal. Here is where it becomes real PROBLEMATIC using Stub Hub (unless it is an instant download ticket). They have, per their TERMS AND CONDITIONS, 48 hours to confirm your order. Until they confirm the order (get a confirmation from their seller), they have NO OBLIGATION to you. Thus, if it is some real “fan” who realized he may have underpriced his seat or had given the seat to his Mother’s sister’s Uncle, you are out of luck (especially if the market on the event is increasing). Additionally, you have lost Forty-Eight hours of time in getting your tickets and if it is a rare irreplaceable ticket gained some resounding disappointment (just so it is clear, once Stub Hub confirms the order they are very good in getting a comparable seat if the actual seller does not send out the ticket as promised). The aforementioned has happened to me a couple of times scoping out “excellent deals.” Using Musical Chairs you will NEVER have this problem as seats are confirmed immediately (unless it is a future order where it is backed up with our full faith and credit of twenty years).

Part II Will come next