Ticketmaster to Face Challenge From Former CEO

Ticketmaster's former CEO Fredric Rosen is poised to challenge his old company as he prepares to take on the role as CEO of Outbox Technology's new U.S. subsidiary, according to a report in The Wall Street Journal..

Outbox, founded five years ago in Canada, allows event and performance organizers to sell tickets through their own websites using its ticket-processing technology. The company, whose clients include Cirque du Soleil, puts a reverse twist on Ticketmaster's centralized ticket-ordering system, which Rosen played a key role in developing for more than 15 years, according to the report.

With Rosen's expected appointment, Outbox plans to launch Outbox Enterprises as a U.S. subsidiary and a partnership between Rosen, Cirque du Soleil and Outbox. The new entity will offer a service that gives clients the ability to sell tickets through their own websites -- cutting out the middleman.

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While Outbox Enterprises' hosted ticket sale approach is the opposite of Ticketmaster's model, its source for revenues will be similar: While Ticketmaster charged its own service fees for selling tickets and funneled a share of those fees back to the venues, under Outbox's model, the venues will decide how much of a service fee to charge, and Outbox will receive a percentage of the fees.

Rosen's launch of Outbox Enterprises will not be without challenges. Ticket sales for the 100 top-grossing events and performances in North America were down 17% in the first half of 2010, and luring away Ticketmaster's client venues may be difficult, as well, the report noted. Ticketmaster generally locks its customers into three- to five-year contracts.

As Outbox expands its geographic footprint, its rival Ticketmaster is expanding its breadth of offerings now that it has merged with Live Nation Entertainment, which manages artists and live music. Whether or not Live Nation (LYV) will be able to dictate which ticketing service a venue must use in order to book a hot act it represents will become evident over time.
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