🎟️ Vivid Seats: Deep-Dive Analysis

Note: This is not financial advice; any investment commentary is strictly opinion only. This is analysis for educational purposes only. Consult with a licensed professional before investing.

What is Vivid Seats?

Vivid Seats is an online ticket marketplace operating through a technology platform that bridges the gap between ticket sellers and fans of live events.

To effectively serve the distinct needs of both ticket buyers and sellers, Vivid Seats developed an intuitive, user-friendly marketplace that aids discovery, simplifies ticket purchasing, and ensures a stress-free overall experience. Aided by an extensive network of partners spanning media, products and services, distribution, and content rights holders, Vivid Seats continues to fortify its brand recognition, driving web traffic and ticket sales.

Vivid generates 60% of revenue from live music and theatre events but also has a growing presence in sports. The company operates Skybox, an industry-leading ticket management system used by 55% of professional sellers and a key competitive advantage over peers. Vivid launched its marketplace platform in 2010 and went public through a SPAC transaction in 2021. As of 2022, Vivid’s ticketing marketplace processed $3.2bn in gross order value, and revenues for the company totaled $624mn (primarily generated from ticket buyer and seller transaction fees).

Vivid Seat’s Business Model

The company's business model is anchored by two principal segments, Marketplace and Resale.

Marketplace

The Marketplace segment facilitates the process of ticket buying and selling. It also includes the daily fantasy sports offering following the acquisition and rebranding of Betcha Sports as Vivid Picks. Here, Vivid Seats leverages the overlap between sports fans who engage in fantasy sports and those who purchase tickets, fostering higher engagement rates and learning more about customer preferences.

This segment's revenue is primarily generated through service and delivery fees charged to ticket buyers, alongside a revenue share from event ticket insurance offered through a third-party provider. Additionally, income is derived from the company's daily fantasy sports offering, where users participate in contests.

Resale

On the other hand, Vivid Seats' Resale segment involves acquiring tickets for resale on secondary ticket marketplaces, including its own. This segment also supports internal research and development initiatives for Skybox, the company's proprietary enterprise resource planning tool. This tool has garnered wide adoption amongst professional ticket sellers due to its effective management capabilities for ticket inventories, pricing adjustment, and order fulfillment across multiple resale marketplaces.

Regarding product diversification, Vivid Seats maintains a broad spectrum of offerings across sports, concerts, and theater categories. The company's strategy to limit exposure to any single category and reduce seasonal variations in order volume is manifested in the variety of entertainment options available within each category.

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