The Californication of the Daily Deals Market: Cheap Tickets

Crowd Seats is bringing a bit of Hollywood to the daily deals business.

The Los Angeles-based company is focused on selling tickets at a discount. The site does not sell bikini waxes, Segway tours or fancy dinners. It’s all about targeting hardcore sports fans.

“It’s the perfect combination,” said Crowd Seats co-founder and CEO Justin Cener. “If you don’t sell it, you lose it. If any tickets are left over, they are worthless.”

Plus, Cener says, once the team gets people in the door, there are additional ways to make money on everything from parking fees to concessions.

The daily deals business really got its start in Chicago with Groupon; then LivingSocial came about in Washington, D.C.

Now it seems there’s a little niche forming in California around tickets. Just down the street from Crowd Seats, there’s a company called ScoreBig that is allowing customers to name their price — sort of like hotel rooms on Priceline.com — for a wide range of tickets, ranging from the theater to sporting events.

Both companies are promising huge discounts on tickets that would normally go unsold. As an additional benefit to consumers, neither company charges any processing fees, unlike Ticketmaster.

The concept is far from new.

Justin Cener

A year ago, Groupon announced a joint venture with Live Nation Entertainment’s Ticketmaster.com to sell a number of limited-time deals on a variety of concerts, sports, theater productions and other live events across North America; more recently, LivingSocial inked a deal with AEG, which owns and operates many concert venues.

Cener said that by focusing exclusively on sports tickets, Crowd Seats is able to sign up fewer members and still get the same results as the bigger guys, because of better targeting. He also said that members don’t get “deal fatigue,” because they aren’t getting inundated with offers they don’t care about.

But Cener faces an uphill battle because of his timing.

He started Crowd Seats in August last year, which was far too late to get the attention of investors, who had become wary of the daily deals market as Groupon and LivingSocial took the lead. As a result, the 2009 Rutgers graduate has been bootstrapping the company, and has very little money left for advertising.

Still, he has managed to launch Crowd Seats in nine markets, adding three new cities — Philadelphia, Denver and Baltimore/Washington, D.C. — at the beginning of this month.

Chris Chaney

Cener has also been able to offer a number of high-profile game tickets, including for a few NBA playoff games. For example, for game four of the Clippers-versus-Spurs series, Crowd Seats sold 33 tickets at $41 apiece, 51 percent off the box office price of $83.

“Basically, the Clippers were down 3-0, and the interest in going to game four fell off the cliff,” Cener said. “They were scrambling.”

With all the cards stacked against him, he has been able to achieve cash-flow positive, and is optimistic that investors will become interested once they see his progress.

Recently, Cener recruited additional help from Chris Chaney, whom he named as co-founder. Chaney was previously president and CEO of Chaney Sportainment Group, where he consulted for sports and media start-ups. Chaney was named to the Forbes “30 Under 30” list in the entertainment category.


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