Market trends, strategies and M&A activities in the event ticketing landscape

| 1© Transaction Consulting Copyright 2017 Proprietary and Confidential
Fundamentaler Wandel durch New Mobility:
Geschäftsmodelle von Verkehrsträgern auf dem Prüfstand
Market trends, strategies and M&A activities in the event
ticketing landscape
Keynote at the Ticketing Technology Forum 2017 in Dublin
Dr. Marcus Garbe
April 6th of 2017

Forward-looking statements
• This report contains statements that are forward-looking.
• These statements are based upon current expectations and assumptions that are subject to risks and uncertainties.
• We may not achieve the results projected in these forward-looking statements, and our actual results could materially differ because of factors discussed in
this presentation.
• Transaction Consulting undertakes no obligation to update or revise any forward-looking statement to reflect subsequent events, new information or future
circumstances.

Transaction Consulting is a Boutique Advisory Firm
Our typical clients are
Our typical projects are
• Businesses operating in technology sector, particularly companies at growth
stage.
• Financial sponsors (typically private equity and venture funds).
• Corporates seeking to grow their business via investment or acquisitions.
• Fast growing companies planning IPO or trade-sale.
• Entrepreneurs and high-net-worth individuals wanting to expand or sell their
business and need advice for structuring and succession planning.
• Growth Strategies with our superior sector knowledge which include Strategy, Business plan and
first round execution.
• Small- and Mid-cap M&A transactions, both selling and buying, for
which our clients value the combination of deep sector / strategic
knowledge and pragmatic working methodology.
• We are frequently engaged as workbench supporting corporate strategy and M&A departments of
leading corporates with specific Due-Diligence modules.
• IPO- and trade-sale preparation incl. steering the entire process as
project manager together with internal staff and departments. Advantage: enables executive
management to focus on the daily business and investor relations.
• Advise and execution of structuring, succession planning and
Fiduciary Services for entrepreneurs and high-net-worth individuals.
About us
• Transaction Consulting is a Boutique Advisory Firm
with ample experience in consulting, buying and selling
businesses as well as IPO-and trade-sale preparation.
• The Company was founded in 2010 by Marcus Garbe
and is based in Zurich.
• We work primarily in the technology sector and speak
our clients’ language of business. The value for our
clients is our work as interface and „translator“ to the
benefit of our clients.
• Significant experience in working with entrepreneurs
and high-net-worth individuals.
• We provide superior service thanks to our experienced
senior team (each 20+ years experience),
entrepreneurial spirit and extensive network.
• Managing Partner & Founder of Transaction
Consulting
• 20 + years experience as Managing Director,
entrepreneur and consultant.
• Expert in Entertainment & Ticketing and Digitalization
• Worked for ifo-institute, Roland Berger & Partner,
argonauten / Grey Global, REPLY, Ticketcorner,
founded and sold diverse Start-ups.
Marcus Garbe

European ticketing landscape
Spain
Italy
Austria
Germany
United Kingdom
France
Netherlands
Denmark
Sweden
Switzerland
22'373
22'912
23'466
24'036
24'619
2014 2015 2016 2017 2018
Market size in
Mio. €
1'323 1'587 1'916 2'329 2'852
2014 2015 2016 2017 2018
Market size in
Mio. €
Primary Event Ticketing Market
Secondary Event Ticketing Market
Primary markets in the selected countries went through an intense phase of consolidation during 2008-2016 and are
dominated either by Ticketmaster (US) or Eventim (GER), the world leading players in the event ticketing industry.

Europe is still a growing market but the gold rush is over
Increasing spending for
robust back-end platforms
and excellent UI
• Ticketing infrastructure needs 100% performance during “Hypes”. In 90% of operations they will need only 5-10% of server- and database
infrastructure
• Google, Apple and Facebook setting the standards for state of the art User Interfaces
Robust ticket prices and
volumes
• Steady incremental increase of ticket prices
• High growth rates 2008-2012 will not be duplicated
Importance of live
performance acts but with
limited growth
• Increased demand by end-consumers for live performance acts
• Increasing live performance offering by artists due to decreasing revenues from recorded music. Strong growth rates of 2008-2012 will not be
matched
• “Old dinosaurs” like Rolling Stones or Madonna still touring but sidestep to smaller venues
Internet distribution as
dominant channel
• Increased online purchasing and higher revenues for Ticketing companies
• Print@home and RFID technology allowing fast delivery and short time bookings
• Mobile has advanced in mature markets (UK) > 30% and will cross the mark 50% by 2018
Data / BI-driven business
models
• Direct consumer interaction, personalized campaign management and activation of former clients will be standard in the near future
• Most ticketing companies just started to set-up the basics
Access controlled events
• Transformation from bearer to registered tickets
• New access technology due to new stadium infrastructure
• Increasing security needs due to latest terror attacks (e.g. for sport events)
Mobile payment during
events
• Mobile payment during festivals including Food & Beverage
Content and direct-to-fan
platforms
• “Long tail” platforms with very specific artist information offer ticketing
• First successful start-ups (Songkick) combine content with live-experience
Secondary ticketing
• Significant growth potential in secondary market with high growth rates and considerable take rates for service provider
Source: Transaction Consulting, various Reports

Key Trend #1: Development of the ticketing industry was always closely
tied to technological developments with significant disruption in market
structure and impact on players
1969
1982
• Printed paper
tickets with
simple design
• Seen as
souvenirs of
memories to
cherish
2002
20122006
• Tickets with
barcodes
• Brand-specific
design and
holograms make
tickets unique
and more secure
• Online tickets sold on
platforms via several
devices (print@home)
• Mobile tickets available
on smartphones
• Printed tickets
with designs
and graphics
matching the
colors of the
event
• Tools and technology
use have made
advanced progress
into the industry
• Different types of
material other than
paper were used
2013 2016
1 Old Style Ticketing 2 Traditional Reseller
“Lean” /
Direct to Fan
3
• Eventbrite
offers direct-to-
attendees
ticketing and
DYI platform for
wide range of
events.
• Crowdsurge and Songkick
merge, raising additional $ 15m
in funding.
• They combine a white-label
direct-to-fans solution with
concert discovery platform.
• Ticketscript acquired by
Eventbrite.
1. Disrupting former
intermediaries and building
a fast track between fans
and artist
2. Redistribution of value
to Artist, Fans and „new“
platform operators
Next big thing:
Reseller
≈ 10% Margin
• Regional non-scale business with old style POS
and paper tickets
Reseller & Sales Push Intermediary
≈ 20% Margin
• National and developing international scale
business with high investments in Infrastructure
represent barriers to entry
• Over time, large ticketing companies became
e-commerce and „sales-push“ experts in
cooperation with media houses
• They grew to classic intermediaries they just
eliminated
• Unfavorable revenue split, disagreements over
„customer ownership Data” and technological
advances (esp. print@home Tickets) led to a
disruption of the established service model
Lean and direct-to-fans solutions
>20% Margin
• Lean SaaS systems with low investment and
significant lower barriers to entry
• New entrants like Eventbrite, Songkick etc. have
brought a new direct-to-fan model
• Promoter with strong content, traditionally selling
via in-house solutions, will benefit most from this
innovation
Digitization
Index

Ticketing operator
Distribution: POS, web marketing & sales
Technology: Building up a
platform and operations
Content: People management,
guarantee-/ signing fees
Key Trend #2: New innovative entrants put pressure on established
industry structure
Digital driven model
• Standardized and aggressive
pricing
• Mobile and internet-only sales
• BI- and data driven sales
approach
• Beta-testing & constant
optimization
• Build-up eco-system: Control
core process, but encourage
“Best-in-Class” partners to use
API
Traditional model
Integration into content and venues
with long-term-contracts or equity-
share
• POS-partner and cooperation
with media houses
• > 20 year old systems with
content master- system and
different semi- or bi-directional
interfaces
• Separate primary and secondary
platforms
• Labour intensive promotion
services to set up events
• Project- and IT driven for key-
accounts
• Control of data & eco-system
Disruptive model: Best of two worlds
( / / )
• Long-tail: Content “rich” websites
with specific artist information
(e.g. Songkick And CrowdSurge)
• Meta-Search platform (e.g.
Seatgeek)
• Direct ticketing from artist-to-
Fans (e.g. Adele in UK, “Die
toten Hosen” in Germany)
• Established Internet companies
such as Amazon and Pandora
use their assets to tackle the
ticketing market and have
launched appropriate initiatives.
ü Lean DIY systems
(e.g. CTS light)
ü Integration of
secondary into
primary platform
(“Special tickets”
on eventim.de)
ü 20 Mio. €
Investment in BI to
leverage 30 Mio.
consumer profiles
(CTS-Eventim)
ü Introduction of
seating plan
(Eventbrite in 2014)
ü Mega-events with
guarantee payment
for organiser (Black
Eyed Peas in 2011)
ü Acquired
Ticketscript to
speed up European
roll-out
ü IPO planned in 2017
Direct chanel „artist-to-fan“
Fans/ consumer
Artist / organizer

Key Trend #3: Established internet companies such as Amazon, FB and
Pandora use their assets to tackle the ticketing market
Radio ($45 bn.)
• Primarily monetized via advertising
• Way to get fans to discover a new act, then monetize that
investment (->Artist Promotion)
On-demand Audio Streaming (2-3 bn.)
• Monetization is a mix of subscription and advertising
• Many streaming services have already begun to integrate
radio and vice versa (e.g. Pandora, Amazon, Apple Music
and Spotify.)
Event ticketing ($30 bn.)
• Grown from 10 billion in 1999 to 30 billion in 2015
- Now typically accounts for 70-80% of artists income
- 2014 only 20% of Americans attended a concert with
main reason being that they didn’t know
Artist Management ($4-6 bn.)
• Companies might diversify into live event management
and artist management further taking advantage of its
data and industry expertise
Synergies:
• Combined access to strong digital user base
• One payment system across ticketing and streaming
services can reduce outflowing transaction costs
• Data analytics enable targeted promotion
- Artists will know which fan listened to them, where
they were based, which concert tickets they
purchased in the past (direct channel artist / fan)
- Tracking of listening trends and targeted promotion
to these listeners when their artist is in town
- More efficient tour routing
Radio (≈$45 bn.)
Ticketing
(≈$30 bn. / year)
Sponsored Live
events (≈$60 bn.)
Artist
Management
(≈4-6 bn. Year) üOnepayment
system
üdirectchannel
artist-to-fan
ü User base
Subscription
revenue
Artist Promotion
Promotion =
more streaming
Ad-revenues
Ticketing
revenues
• 10/2015 Pandora acquired Ticketfly for
$450mn.
• Ticketfly’s gross revenue grew 25
percent year-over-year to $86.6 mn.
• Pandora became the 5th-best traffic
source to Ticketfly by the end of the
year
• CEO Tim Westergren: targeted
messaging is “a remarkably effective
driver” of ticket sales
• 2015 Pandora also acquired Next Big
Sound (a music analytics company),
Ticketfly to partner with Lyte, a
secondary market ticketing company
Streaming
$2-3 bn / year
ütargeted
promotions
üEfficient
tourrouting
Sponsoring
revenues
Overlapping markets & synergies Reference case

Key Trend #4: Consolidation is on its way, CTS Eventim group as the dominant
player cementing D-A-CH markets
Germany
Switzerland
Austria
• 2010: German operation of Ticketcorner Switzerland now part of CTS-Eventim Group
• 2010: CTS EVENTIM acquires See Tickets Germany GmbH/Ticket Online Group and
concludes exclusive ticketing agreement with Stage Entertainment Germany. 100% takeover of
See Tickets Germany GmbH and EUR 40.2 million in revenue and more than 20 million tickets
sold. New 12-year contract provides exclusive access to attractive content of musical
productions group Stage Entertainment Germany
• 1999 Austrian Ticket-Express acquired by CTS-Eventim
• 2016: CTS Eventim acquires JetTicket Software GmbH, which is the leading White Label
Plattform provider in Austria with over 15m tickets sold.
• 2010: CTS / Ringier (Mediahouse) to takeover Swiss Ticketcorner Holding AG market leader
in Switzerland / CHF 35 million sales and 9.3 million tickets.
• 2013: Tamedia (Mediahouse) acquired Starticket AG (# 2 in Switzerland).
• 2016: Ticketcorner and Starticket will enter into an alliance and build a joint Swiss ticketing
group. Ticketcorner Holding AG, which is half owned by CTS Eventim Group and Ringier, will
hold 75% and Tamedia 25%.*
Consolidation
Index
low highConsolidation Index
Consolidation
Index
Consolidation
Index*
*=Depends on decision of
Swiss Competition
Authority (WEKO) in 6/17
Population:
81 mn.
GDP/ Capita:
$39.500
Population:
8.2 mn.
GDP/ Capita:
$42.600
Population:
8.1 mn.
GDP/ Capita:
$55.200

Case Study: JetTicket sold to CTS Eventim Group (10/2016)
Strategic rationale of the transaction
• Geographic match: Transaction object has been highly visible in the Austrian market due to high profile clients and high market-
share.
• State-of-the Art software and highly-experienced development team.
Project assignment Results
Seller / Target Buyer
• JetTicket Software GmbH: Austrian Software company
with a focus on white label ticketing solutions
• Market leader in Austria, major clients in Germany and
Switzerland
• Family owned
1. Analysis of peer group and strategic consulting focusing
on positioning of the company with potential investors and
buyers.
2. Designed multi-stage auction process: Identified and
contacted potential investors, prepared diverse process
letters and information packages.
3. Project Management: Coordination and preparation of
due diligence process with one-face communication to
investors ensuring that investors receive answers to
questions raised in the due diligence process.
4. Structuring of the transaction with lawyers and tax
consultants.
5. Lead in negotiation with potential investors and
coordination of deal-team.
1. Base-case with a high share of recurring revenues and
two upside cases ensured maximum valuation.
2. Few credible bidders led to transaction security and
strong negotiation position.
3. Identified potential “Red-Flag” issues at an early stage
of the process and solved several issues before critical
last round and prevented potential hold-ups (maximize
speed!).
4. Project management ensured “one” communication
channel to the deal team of buyers side and enabled
management to focus on daily business with minimum
business disruption.
5. Reduced costs of lawyers and tax consultants due to clear
cut process (lean deal team).
6. Closed transaction with a perfect partner to leverage
JetTicket platform into other markets of CTS
• CTS EVENTIM AG & Co. KGaA: Listed in the MDAX index
(ISIN DE 0005470306), is Europe’s market leader in the
ticketing field with activities in 26 countries.
• REV: € 829 m (2016); Market cap: > € 3.5 bn (29.3.2017)

Case study: Key process objectives
Key Observations
• Few credible bidders
• Careful preparation and
pre-selection of potential
buyers will be critical to
maintaining control over
the process and
maximising bidder
tension while minimising
time to completion
Maximise
confidentiality
• Best achieved through a disciplined process targeted to a narrow audience of credible bidders
• Prepare internal communication for employees
Minimise
Business
Disruption
• Achieved through a highly focused, disciplined process
• Keep demands on management narrowed to a prescribed window; manage external advisors of bidders
• Rely on external advisors and a small internal team with access to necessary information
Maximise
speed
• Ability to maximise speed and value directly a function of buyer pre-selection (thoughtful list of potential buyers
with credible rationale) and maximum preparation
• Thorough up-front preparation to avoid minor housekeeping topics to become major issues because “detected”
late in the process
Maximise
valuation
• Often achieved through a wide auction process ensuring maximum bidder tension and reducing the likelihood
that the lead bidder is inadvertently omitted
• Targeted process may achieve better result provided careful pre-selection and tailor-made sales messages
• Exhaustive preparation essential to ensure no surprises and to optimise attention of each potential buyer
Objective Comments
Maximise
certainty
• Set messages early regarding acceptable levels of conditionality and non-negotiable contract points, if any
• Engage with broad enough bidder universe to protect against likely fallout, carefully monitor bidder appetite
throughout process and avoid going bilateral too early

Case study: Scope of sales process
Observations
Based on previous
experience and our initial
discussions, we believe a
focused and fast moving
sales process based on
thorough up-front
preparation, is the most
appropriate approach
given desire to (i) keeping
control over the process,
(ii) minimise business
disruption and (iii)
generating optimal level
of deal tension
Recommendation: A narrow process
Description Benefits Issues
Narrow
process
• Two-stage auction
process with small
group of potential
buyers
• Well suited to
situations where there
is a small group of
credible bidders
• Competition ensures
value maximisation
• Shorter timetable
• Less disruptive to
business
• Higher degree of
confidentiality
• Delay/price erosion if
interest from potential
buyers over-estimated
• Risk that optimal buyer
not included (thus pre-
selection crucial)
“Rifle-
Shot”
• One-to-one negotiation
with preferred buyer
• Well suited to
situations where the
“perfect” buyer
extremely interested
and willing to pay the
desired valuation
• May extract a premium
price for exclusivity
• Potential for shorter
timetable (but not
always)
• Maximum
confidentiality
• May not achieve full
value given lack of
competitive pressure
• Difficult to control
timetable, as no “stick”
to put time pressure on
the process
Broad
process
• Two-stage process
with broad universe of
potential buyers
• Usual process
adopted by most
companies
• Low risk of missing
potential buyer
• Relatively well defined
timetable
• Longer timetable
• Unlikely to hold
interest of all bidders
throughout the
process
• More disruptive to the
business
• Unlikely to maintain
confidentiality

• Established internet companies such as Amazon, FB and Pandora use their assets to tackle the ticketing market (Alibaba
acquired Chinese Ticketing Service Damai in 3/2017).
• M&A process in preparation: They are willing to pay strategic prices for technology- and team-assets.
à Watch out carefully and do not underestimate the potential impact
Summary: Lessons learnt & “To-Do” list for the Ticketing CEO
• Innovation, UX and up-to-date features is a must: Google, Facebook, Apple & Co. set the pace and standards
• Budgets for IT/ Features / UX will increase to keep the standards
• Scale-nature of the ticketing business will set profitable minimum volume to an increasing and higher “plateau”
à Capex holiday is not the solution (otherwise you will have a lot time for holidays…)
Key Trend #1
Technological
developments challenge
established ticketing firms
• New entrants manage to gain volume
• Digital players with growing number of ticketing features tackling the market from the long-tail
• PE-Firms with deep pockets for innovative work on concepts to disrupt the established market structure
à Digital “lean” products are your direct competition – think about standardized lean products to address the long-tail
market and small volume clients
Key Trend #2
New innovative entrants
pressure on established
industry structure
Key Trend #3
Established internet
companies to tackle the
ticketing market
• Increasing M&A activities of industry leaders (Ticketmaster & CTS-Eventim) show that they are urged to fight for maintenance of
their positions and invest in premium valuations
• LiveNation made 13 acquisitions (1 ticketing, 1 video, 11 content) in the past 13 months, CTS-Eventim made 8 transactions
during the same time period (3 in ticketing and 5 in Content / Venues)
• Premium valuation and strategic prices define a SELLER market. BUT: Avoid 1:1 talks! Structured process is a MUST
à Regional / SME ticketing firms: If you can’t beat them – join them!
Key Trend #4
Consolidation

Thank you very much for your time and attention!
Office Zurich
Transaction Consulting GmbH | Lavaterstrasse 103 | CH-8002 Zürich
T : +41-43-817 69 63 | F : +41-43-817 69 65
info@transaction-consulting.com | www.transaction-consulting.com
Any questions, comments?
Please contact:
mg@transaction-consulting.com
+41-79-306 7595

Fundamentaler Wandel durch New Mobility:
Geschäftsmodelle von Verkehrsträgern auf dem Prüfstand
Boutique Advisory Firm with ample experience in consulting, buying and selling businesses as well
as IPO-and trade-sale preparation based in Zurich
January 2017

Our Services
Strategy
• We advise corporates and entrepreneurs operating in the technology
sector particularly at growth stage.
• Growth Strategy projects based on our superior sector knowledge
including strategy advisory, development of business plans and first round
execution.
• We are pragmatic about methodology but passionate about business. We
understand our clients’ business and get deeply involved in their specific
business issues.
• Based on our quantitative working methods we develop sustainable
strategies, which secure a long run business orientation, even in dynamic
competitive environments.
Transaction Advisory
• We assist companies and entrepreneurs with growth funding, M&A as well as
IPO- and trade-sale preparation.
• We are frequently engaged as a workbench, supporting corporate strategy
and M&A departments of leading corporates with specific Due-Diligence
modules.
• IPO- and trade-sale preparation incl steering the entire process as project
manager together with internal staff and departments. Advantage: enables
executive management to focus on the daily business and investor relations.
• Advise and execution of structuring, succession planning and Fiduciary
Services for entrepreneurs and high-net-worth individuals.

Core activities, sectors and selected clients*
• Organizational and process audit (IT / E-Commerce) for a leading Swiss
retailer.
• Trade sale WTV CH AG Swisscom Event & Media Solutions AG.
• Positioning and Options for market entry, in a growth initiative for a subsidiary
of a Swiss Blue-Chip company.
• Detailed Business plan and partner portfolio (Growth initiative to boost
revenues x3 until 2020) of a Swiss Blue-Chip company.
Entertainment &
Ticketing
• Strategy, portfolio optimization and growth initiative for a subsidiary
of a Swiss Blue-Chip company (growth initiative to boost revenues
x4 until 2020).
• Trade sale Starticket Tamedia AG
• Joint Venture Reservix AdTicket
• Asset deal Ticketportal (B2C) Starticket
1
Digital Transformation
IPO- and trade-sale preparation and
execution
2
• Symetis (medtech): IPO-preparation.
• PharmaSwiss (specialty pharma) Valeant (EUR 350m) following IPO-
preparation.
• BRAHMS (diagnostics) Thermo Fisher (EUR 330m).
• Osmotex (electroosmotic membrane): Board member.
3
*= In general Transaction Consulting works under strict confidentiality. The above
transactions and projects have been closed and are already publicly known.

Experienced senior team with ample experience and specific sector
background
.
• 20 + years experience from leading venture capital and audit firms as well as venture capital financed
companies.
• Expert in IPO- and trade-sale preparation and execution.
• Worked for Deloitte, Ernst & Young, HBM Partners and Symetis.
• Studied at NHH Bergen, Norway.
Lars-Kristian Bråten
Associate Partner
MBA and State Authorised Public
Accountant (Norway)
lkb@transaction-consulting.com
.
• 20 + years experience as Managing Director, entrepreneur and consultant.
• Expert in Entertainment & Ticketing, Digitalisation & New Mobility.
• Worked for ifo-institute, Roland Berger & Partner, argonauten / Grey Global, REPLY, Ticketcorner, founded diverse
Start-ups.
• Studied Business Administration and Economics in Hamburg, Cologne, Barcelona and Cambridge (USA).
Dr. Marcus Garbe
Managing Partner & Founder
Graduate Business Administration
and PhD Economics
mg@transaction-consulting.com
.
• 20 + years experience as CFO, Tax Advisor and Auditor.
• Automotive Industry Expert and Expert in audits for SMEs to provide internal and external reporting, including IFRS
and US GAAP.
• Worked for Haarmann Hemmelrath, Arthur Andersen, PWC (CZ), Muhr und Bender (CZ).
• Studied Business Administration in Tubingen.
Christian Söder
Associate Partner
Graduate Business
Administration, Certified German
Tax Advisor and Auditor
cs@transaction-consulting.com
.Anna-Marie Garbe-Danuser
Partner & Finance / Admin.
Certified Fiduciary, Adv. Federal
Diploma of Higher Education
amgd@transaction-consulting.com
.
• 20 + years experience as Consultant and project manager.
• Expert in Strategy and Organisation in the media industry.
• Worked for Roland Berger & Partner, Eversmann & Partner, Dr. Michael Taeger & Partner, dpa Deutsche
Presse-Agentur
• Studied Industrial Engineering in Hamburg.
Michael Eisenberg
Senior Advisor
Graduate Industrial Engineering
me@transaction-consulting.com
• 25 + years experience in Swiss and international taxation and structuring.
• Active Member of IFA and Treuhand Suisse.
• Expert in Advising international high-net-worth individuals and corporates in the fields of structuring and succession
planning.
• Worked for Credit Suisse Trust, KPMG, LGT Trust, Credit Suisse (Deutschland) AG, Quadris AG

Market trends, strategies and M&A activities in the event ticketing landscape

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Market trends, strategies and M&A activities in the event ticketing landscape

Similar to Market trends, strategies and M&A activities in the event ticketing landscape (20)

Recently uploaded

Recently uploaded (20)

Market trends, strategies and M&A activities in the event ticketing landscape