Thursday, October 04, 2012

Can Redbox Disrupt The Ticket Business?

For years, Live Nation Entertainment's Ticketmaster business has held a dominant position in the ticket retailing business.  In fact, many artists and consumers have explained about Ticketmaster's power in this market.  Now, a new rival appears to be emerging.  Redbox has announced plans to sell tickets through its ubiquitous kiosks.  At first, Redbox plans to focus on selling surplus tickets.  In other words, the company will be trying to help unload tickets that otherwise aren't selling for key events (bad seats, leftover tickets, etc.).  

The question, of course, is whether the move to sell surplus tickets will eventually translate into a broader ticket retailing business.  We know that many disruptive innovators start out at the low end of the market, selling what appears to the dominant incumbent players to be "inferior" products or services. Gradually, however, the disruptor begins to improve its product, and it gains traction outside of a fringe consumer segment.  At that point, the disruptor becomes a major threat to the incumbent players.  We saw this happen as Redbox and Netflix disrupted Blockbuster.  Could Ticketmaster be facing a major threat in the coming years? 

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