eBay's secondary ticketing operation once again bested the growth of its parent company, increasing year-on-year turnover by 20%
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With investment from LCD Soundsystem's James Murphy, Tracer – led by ex-Ticketbis VP Jorge Díaz Largo – aims to make ticket touting a thing of the past
By Jon Chapple on 16 Jul 2018
A group of senior former Ticketbis/StubHub staff have launched Tracer, a blockchain-powered ticketing solution with which they hope to “shake up the ticketing industry” to make it fairer for artists and fans – both of whom, they say, are “victims of a highly abusive resale market”.
From humble beginnings in Spain, Ticketbis grew to become a global ticket resale platform with a presence in 47 countries, culminating with its acquisition by eBay’s StubHub in May 2016 for a reported US$165m. Tracer CEO Jorge Díaz Largo, who joined Ticketbis as marketing director in 2011 and rose to become VP of product and marketing, says the platform quickly turned into “a marketplace for ticket touts”, which “wasn’t the original vision”.
“We were naïve,” Díaz tells IQ. “We wanted to help normal people who were no longer able to go to a concert and wanted to get rid of their ticket. However, in every market we [Ticketbis] were in – the UK, France, Germany, Latin America – it was a marketplace for ticket touts, where touts controlled the tickets and set the prices.”
Díaz is joined at Tracer by Ticketbis alumni David Di Bartolomeo – formerly head of global paid performance at Ticketbis, and now Tracer’s head of marketing – and head of business development Carmen Navarro Lado, who is StubHub’s ex-head of communications in Europe.
Other Tracer staff include COO Alberto Martínez, the former general manager of airline marketing start-up EveryMundo, and Eduard Korkhov and Andrei Lebedev, the founders of corporate reputation management company Polecat, who serve as CTO and head of operations, Moscow, respectively.
Unlike the traditional secondary ticketing platforms – where resellers call the shots – Tracer empowers artists and promoters, using blockchain technology to ensure they remain in control of the ticket at every stage of its digital lifecycle, says Díaz.
“What [the big resale sites] aren’t saying is that almost all their inventory is controlled by no more than 50 ticket touts, who have access to millions of tickets,” he explains.
“These major resellers account for 80–90% of the revenue of these companies, so their main mission is to take care of the brokers – they’re the real client, not the ticket buyer – with specific people, dedicated account managers, taking care of these sellers, incentivising them to sell more, helping them get more inventory…
“That business model is not going to go far. If there’s a way [for sellers] to control the tickets, that’s bad for buyers – who often end up paying many times over face value.”
“If there’s a way for resellers to control the tickets, that’s bad for buyers”
The solution, says Díaz, is the blockchain: the decentralised ‘distributed ledger’ technology, used by cryptocurrencies such as bitcoin, which serves as a permanent, public, immutable log of all data and transactions on a particular database, or (block)chain.
While there’s no shortage of ticketing companies already utilising the permanent, transparent nature of the blockchain to eliminate ticket fraud and unauthorised resale – Blockparty and Tari being among the most recent – Díaz says he “doesn’t like to focus” on the blockchain aspect of Tracer. “For some other companies, it’s a way of getting money – they do an ICO [initial coin offering, or token sale] and suddenly they’re a public company, with investors and a token whose price is going up and down…
“Don’t get me wrong – I like Aventus, Crypto.tickets and lots of these other start-ups, and it’s very exciting, all these people bringing this innovation into the industry is fantastic news. But we have no plans to do an ICO, and no plans to sell any tokens. We’re focusing more on the problem the industry has, and how that can be solved with blockchain.”
Díaz admits Tracer is, like all new solutions, faced with certain barriers to adoption, including its reliance on 100% mobile ticketing – which, while allowing promoters and artists to restrict resale, as well as enabling new functionality such as discounts and special promotions, makes tickets unavailable to those without a mobile phone.
He says, however, that it’s only “a matter of a time, and a very short time” before paper tickets are a thing of the past – as demonstrated at the recent Cambridge Club festival in the UK, whose ticket agency, Hey Tickets, used Tracer’s Smart Ticket infrastructure for ticket sales. Nine thousand Smart Tickets – which generate a dynamic QR code to be scanned at entry – were sold for the Cambridge Club, in the first time blockchain and dynamic QR had been used at a major music festival (and with a largely middle-aged audience).
On a grander scale, Díaz hopes Tracer will be the catalyst for “big paradigm shift” in the live music industry – one that will see the balance of power shift from major ticketing companies towards artists and their representatives.
“Who has the power now? Big primary ticketing companies,” he explains. “Artists and independent promoters take the money, but they don’t know the exact number of tickets sold. We want to move that power from ticketing companies to artists… once they have that power, they can sell tickets wherever they want.
“We want tickets to be sold via as many channels as possible. They won’t only be sold on one website – there’s nothing like that in any other industry. There are lots of channels – news websites, social media – where tickets can be sold but they’re not now.”
“It’s over. We have the control now”
“By opening up distribution – instead of having data siloed by the big ticketing companies – we’ll give the data back to the artist,” he continues. “And that’s where it should be: with the artist, not the ticketing company.”
A decentralised, open-distribution approach is the right one for artists and promoters, both of whom would sell more tickets while dictating the rules around their sale, says Díaz. “At the end of the day, it would be good for the big ticketing companies and promoters [which own ticketing platforms], too,” he adds, “as it would make them better realise the value of the artists.
With no ICO dollars to speak of, Tracer is funding its plans for adoption – initially targeting Europe and Latin America, “where the secondary industry is more scrutinised than in the US”, says Navarro – with a combination of private-equity and music-industry investment.
Tracer’s investors include several “well-known record label execs, managers and music-industry insiders,” including LCD Soundsystem’s James Murphy, she tells IQ, as well as Pillar, a Boston-based venture-capital firm. Díaz says the company has raised “a little over” US$1m.
“With Tracer, I want to power all tickets,” says Díaz, outlining his masterplan Tracer. “I want to be the operating system of tickets: If we say that tickets can be sold via the same channels as today – Ticketmaster or See Tickets, for example – but that artists, independent promoters and venues have access to this operating system, they can then define the rules of their tickets.
“I understand wanting to keep everything in house, but it’s time for transparency and openness. Whether it’s GDPR giving power to consumers, or Spotify and Netflix giving power to creators, there’s not a single industry that hasn’t moved in that direction in the past 20 years. Transparency is good for everyone.”
As for the secondary market, Díaz says he has one message for ticket touts and platforms like his former employer. “We’re inviting promoters and artists to join forces with and us and send a message,” he concludes. “‘Your business is obsolete. It’s over. We have the control now.’”
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