FlipTix aims to time-splice events by re-selling the tickets of fans leaving early. (Photo by Gonzalo Arroyo Moreno/Getty Images)
During the busy summer season at campgrounds, when park plots tend to sell out, Seth Siegel noticed how often campers and RVs might reserve a week but vacate halfway through, leaving unused terrain that the park couldn’t return to their inventory to meet the unmet demand. Along with his older brother, Jaime, he began brainstorming ways to time splice the sites, turning the dead asset into a producing one.
“While we were developing and thinking more about the business model,” Jaime said, “we decided that, ‘Hey, this would work way better in the entertainment space.’”
Jaime Siegel is now CEO of FlipTix, a startup entering the sports and entertainment space to create a tertiary ticket market with the slogan,“We sell unused time.” Venues almost universally prohibit fans from reentry, so when someone leaves early, the seat remains empty.
Under FlipTix’s business model, fans who exit before the end of a game, tournament, concert or festival would be incentivized to press an “I’m gone” button in an app. That allows the event promoter to resell the ticket while the original ticket buyer receives some renumeration, which could be anything from cash to gift cards to t-shirts to a discount on another ticketing package.
The rise of more and more sports venues in cities’ downtowns has created a concentration of fans within a short walk or Uber ride away. And there are often thousands of fans tailgating in the parking lot who never had a ticket in the first place, particularly for NFL or college football games.
And inevitably there are fans inside the event who have reason to leave early. One has to catch a train, the other to wake up early the next day. Young children force others out midway, while disinterested corporate clients give up on their team making a comeback. All of them leave with significant time left in the game.
With its app and GPS technology, FlipTix can confirm that particular fans have left, invalidate the tickets’ barcodes, target nearby fans with push notifications, resell the tickets and issue new tickets to fill the seats and offer the venue new customers who might purchase concessions or merchandise. For its model to work, FlipTix needs to integrate with official ticketing platforms and partner with promoters, teams, leagues and venues. In his meetings with partners so far, Siegel says he has seen quizzical looks later replaced with affirmation about the idea’s potential.
“If our partners don’t make money, we don’t make money,” Siegel said. “Our whole vision is that we want to drive people in because that then drives all the ancillary sales that go along with someone being in a facility.”
FlipTix will price the flipped tickets based on an algorithm — with factors such as remaining time and current score — that will become increasingly sophisticated with more data. Not only will that data aid its own efforts, it will also open up new avenues for marketing and facility management.
“There’s going to be many opportunities for this kind of technology that we’re not even thinking of today,” Siegel said. “The data we’re going to be collecting — they rarely collect dynamic exit data of an event, right? As our community grows, we’re going to be able to have a statistically significant sampling of the exiting of people from a facility.”
Events will be broken down to short and long formats, with the latter potentially including multi-day college conference basketball tournaments or music festivals like Coachella where Siegel thinks the same wristband could be flipped upwards of a dozen times. “Different fans for different bands,” he said, “and people could really come and go and flip their ticket for a fraction of the price.” Shorter duration events like big-name concerts are inevitably sold out, with inherent demand, but single sporting events that are at maximum capacity may still run out of availability in certain sections, like the lower seating bowl. FlipTix could designate only those ticketing areas for resale so as not to cannibalize the rest of the inventory.
“The millennial mindset — now, I’m not a millennial but as I have it on pretty good advice — is experience over stuff,” Siegel said.
Siegel, an attorney who spent 16 years as Sony’s vice president of intellectual property, has advised other tech companies, consulted firms on the importance of IP and coached UC-Irvine business school competitions. FlipTix has seven patent applications on file, with more to come, Siegel said.
“Now I’ve got to put my actions where my words were,” he said. “As a tech startup in a brand new market where this doesn’t exist, we’ve taken great efforts to protect our intellectual property.”
Siegel analogizes ticket flipping to the music downloading app Napster, when folks rampantly used an illicit market because there was no other option. Once legal, reasonably-priced options arose, almost everyone readily adopted iTunes, Spotify and the like. While some will always try to game or defraud the system, he said, human nature skews toward legitimate methods.
“Our whole model is, not only are we going to provide the right way to do something, but we’re going to incentivize every participant in that ecosystem,” Siegel said.
