Traditional vs Modern Ticket Distribution

Traditional (analog) vs modern (digital) concept in ticket distribution

A comparison of the traditional (analog) and modern (digital) concepts in the ticket distribution industry

The traditional (analog) distribution concept

One significant - though by no means the only - characteristic of traditional ticket distribution is that it builds and develops its sales strategy primarily around physical (traditional) points of sale, which we might also call stationary given the permanence of their locations. Digital sales channels such as online portals or Facebook are used by traditional distributors merely as a supplement to their physical outlets, which include petrol stations, kiosks and newspaper stands, travel agencies, retail chains and the like. Looking at this from the ticket buyer's perspective reveals an interesting fact: traditional distributors expect the physical presence of potential customers at one of their outlets whenever they want to buy tickets. Traditional distribution does not eliminate queuing - something today's buyers would certainly welcome - it merely relocates the queue from one location, say the box office of a concert hall, theatre, sports arena or stadium, to another location where the distributor's physical outlet happens to be. Thanks to the greater number of outlets the queues are generally shorter (though not always), but all the other limitations of traditional distribution remain firmly in place. To get to the heart of the matter and understand things properly, let us look at the most obvious limitations.

(Geo)location constraints, which mean buyers often have no point of sale nearby - a particularly common situation outside urban centres.

Architectural barriers on the routes to points of sale, posing a major problem especially for customers with disabilities.

Logistical constraints, which mean that buying tickets in most cases involves some kind of journey that the buyer can rarely make on foot and must otherwise rely on some form of transport. These logistical limitations are especially pronounced outside urban centres.

Time constraints, meaning that the operating hours of traditional box offices, however long they may be, are still limited. Considered against the full 24-hour daily cycle, traditional box offices are open for only a fraction of the total available time.

Communication constraints, which in milder form mean limited and in more severe form mean impossible verbal communication for the customer at the point of sale. Such situations arise from language barriers, speech impairments, hearing impairments and others.

Traditional distribution is unable to remove these and certain other limitations, which does not mean it cannot be done. As will become apparent later in this article, most of these constraints can be effectively and permanently eliminated, much to the satisfaction of ticket buyers.

The ticket distribution concept born in the previous millennium remains essentially unchanged, and traditional distributors show no interest whatsoever in addressing its problems. Quite the opposite - they remain faithful to the so-called walk-in sales model. It is clear that traditional distribution and traditional distributors do not see modern telecommunications and information technologies as a unique opportunity for change and innovation in the industry. If anything, they appear to use these technologies merely to relieve the acute symptoms of the decay and decline of the traditional distribution model - an irreversible process that nothing can stop any longer.

Despite the fact that the traditional distribution model has clearly outlived its time and is in decline, there is no sign of any ambition on the part of traditional distributors to adapt their outdated concept to the completely changed habits and needs of buyers. One could argue the very opposite is happening. Through aggressive advertising they direct ticket buyers to their traditional outlets. This is perfectly understandable since the strategic goal of traditional distributors is to sell as many tickets as possible at physical locations. If those happen to be petrol stations, the traditional distributor will use aggressive promotion of those outlets to steer as many buyers as possible to make their purchase right there, and the motives vary widely. Strategic partnerships are often involved. In other cases the driver is additional revenue shared between the distributor and the outlet. In yet other cases promotional or targeted marketing campaigns are at play. It should also be said, however, that most traditional distributors have no serious alternative to their physical outlets. Quality, advanced solutions for selling tickets through modern digital channels are simply not their strong suit, let alone their competitive advantage.

These facts reveal another insight. It is not hard to see and understand that the traditional ticket distribution model - viewed from the energy, cost, time, logistical and even environmental perspective, among others - is extremely inefficient (in other words, expensive and therefore unsustainable), and it is only a matter of time before buyers abandon it entirely. If not sooner, this will certainly happen once a future generation that is fully digitally literate and environmentally aware enters its active years. For buyers of dematerialised digital tickets in the not-too-distant future, standing in line at a box office will be just as incomprehensible, unnecessary and even bizarre as many things from our grandparents' era are to our generation.

In response to the passivity, indifference and, to a certain extent, inability of traditional distributors to adapt to the needs, expectations, desires and changed lifestyle of today's audience, a new wave of modern distributors has been emerging in recent years. These build, develop and base their sales strategy primarily on modern digital channels. The traditional distribution model, with physical and stationary outlets as its defining feature, is losing the battle against this new wave at an accelerating pace. While many modern distributors have not (yet) entirely abandoned physical outlets and treat them as a necessary evil of the transition, an increasing number are betting exclusively on online sales. Low-cost airlines charted this direction in a visionary manner over a decade ago, and it is perfectly clear that others are now following the model that proved successful. In terms of the strategic goals of the new digital concept and modern distributors, it is only a matter of time before physical outlets are recognised as insufficiently efficient, expensive, and therefore unnecessary.

In the remainder of this discussion we will see that the modern, fully digital distribution concept and the traditional, still largely analog distribution concept are two entirely different and fundamentally opposed paradigms. On one side stands the traditional approach, which has never managed to remove the many limitations of the analog world. On the other side stands the modern digital concept, which removes and bypasses those limitations while offering ticket buyers an entirely new user experience, numerous savings and high added value. The year-on-year growth in the number of users choosing the modern way of buying tickets clearly indicates the direction in which the ticket distribution industry will develop in the coming years.

Thanks to the new wave of modern distributors and their successful market moves, combined with generational change among promoters, organisers and venue managers, traditional outlets are losing the fight against digital channels at an ever-faster rate. At least in ticket sales this is already a fact today. Although not all modern distributors have fully abandoned the traditional approach - some try to extend its life with mobile outlets - the final outcome is plain to see.

Modern ticket distribution is characterised by building, developing and basing its business strategy primarily on digital (virtual) points of sale: websites, online portals, social networks and the like. Just as traditional distributors characteristically foreground and promote their physical outlets, the representatives of the new wave foreground digital promotional, marketing and sales channels. The traditionalists use radio and television, print ads, posters and other media to direct ticket buyers to physical outlets such as petrol stations, kiosks, travel agencies and so on. The new wave operates quite differently, using various and predominantly digital media to steer ticket buyers toward digital channels - online portals, specialised online stores, social networks and the like. As we can see, these are two fundamentally different business philosophies, and in the end it comes down to the difference between the traditional analog and modern digital approach.

The digital approach - we might even call it the digital principle - in modern ticket distribution does not apply only to the clear primacy of digital sales channels. It extends its roots into every business process of the modern distributor. Traditionally organised and managed, poorly computerised, in many cases even manually run and highly labour-intensive processes (all characteristics of companies that have not yet crossed the line between analog and digital) are transformed in modern distribution companies into advanced e-business characterised by full computerisation, business process re-engineering accompanied by automation, the use of sophisticated software robots, advanced digital tools and so on. The differences between traditional operations and modern e-business are enormous and span every aspect of the organisation.

The effectiveness of the digital principle is easiest to understand if we recall the key limitations of traditional distribution and draw a comparison.

(Geo)location constraints are almost entirely eliminated by modern digital distribution because tickets can only not be purchased in places with no mobile signal or one too weak for data transfer. Wherever there is a quality signal from a mobile operator, tickets can be bought. Urban and non-urban areas thus become far more equal than under traditional distribution.

Architectural barriers on routes to points of sale become irrelevant because tickets can always and almost anywhere be purchased via the internet or a mobile phone (which has virtually become the same thing).

Logistical constraints no longer exist because tickets can always and almost anywhere be purchased via the internet or a mobile phone.

Time constraints, characteristic of traditional outlets, are gone because all online or virtual points of sale operate 24 hours a day, 365 days a year.

Communication constraints are also becoming a thing of the past. Sophisticated software robots handle language barriers through user interfaces (typically supporting multiple languages) as well as speech and hearing impairments.

As we can see, the modern digital distribution model removes all the limitations of traditional distribution, and ticket buyers are responding with approval, enthusiasm and even a WOW effect. The best evidence for this claim is the steadily growing number of buyers using digital channels year after year. But things are not changing only on the audience side - organisers, promoters and venue managers are shifting their thinking as well. How else can we explain the growing interest in online sales and the increasing number of promoters and organisers who practise exclusively online sales? Not only in Croatia but across the wider region, more and more promoters and organisers are partnering with Mojekarte's modern distribution each year. All of them have recognised the efficiency and quality of our modern sales services and offer their tickets through our distribution exclusively online.

In October 2020, when this article is being written, both models of ticket distribution coexist in the wider region - the traditional (analog) and the modern (digital). But if we look back to 2010, the traditional (analog) concept dominated the market absolutely, and promoters and event organisers were united in the view that the number of physical points of sale was the single most important factor when deciding which distributor to partner with. Those who thought differently were a small minority, mostly connected with the cultural sector where things tend to be viewed a bit more broadly. This state of affairs lasted until 2015, when a period of significant change began in the ticket distribution industry.

During the era of complete dominance of the traditional (analog) distribution concept and the supremacy of physical, stationary outlets over all other sales channels between 2010 and 2016, Mojekarte built a series of online stores on its own digital technology for cultural institutions, sports clubs, managers of tourist attractions and natural landmarks, as well as online portals. Without a single exception, all these online stores shared one characteristic: their turnover grew month on month and each new season brought new sales records. The online stores launched in those years now possess substantial marketing databases, and their owners and managers are reaping the rewards of past investments in advanced technology. Marketing databases are a prerequisite for the shift from traditional promotion to e-promotion, from traditional marketing to modern e-marketing, and from traditional sales to e-sales.

For a new generation of young people who will start buying their first tickets in the coming years, the idea of standing in line at a box office simply does not compute. It does not even occur to these kids to walk to a box office even when there is no queue at all. It is just not cool. Tomorrow's audience was born with a smartphone in hand. Services they cannot access and use through their mobile phones do not exist for them. This is something we all have to accept. This is an audience that has already gone digital and communicates via Twitter, Facebook, Instagram and other social networks. These spectators and visitors of tomorrow's events and experiences carry the genome of the digital world, and that fundamentally changes the principles and models of promotion, marketing and sales as we knew them.

Zoran Bistrički, e-business consultant