Biomedical Informatics

Sporting and entertainment events are annually frequented by millions and have become a part of our life. While Ticketmaster was a leading supplier of tickets in primary market, the secondary market was highly fragmented and left untapped. Jeff Fluhr and Eric Baker had found that there was no efficient way in sporting and entertainment event for consumer buyers and sellers of tickets to exchange them in the secondary market. The secondary market did not have any major national player and consisted of deals made in parking lots of stadium or highly fragmented ticket brokers. This very idea gave birth to StubHub. It would use internet to bring the buyers and sellers under one roof to make a transaction that is safe, secure and swift addressing the inefficiencies of the secondary market.

Sporting and entertainment events occur throughout the year and hence the year around sales from primary and fragmented secondary channels like nearby parking lot deals, local classifieds or word-of-mouth marketing of existing ticket. The product that Fluhr and Baker decided to focus on has an enormous market of over $10 Billion of sales in the United States annually. Moreover event tickets are worthless after an event occurs, buyers and sellers are motivated to locate one another within a limited time and internet could bridge the gap; both geographic and time. Likewise, tickets are self-descriptive with event name, date, venue, section, row and does not necessitate the "touch and feel" thus the internet would be the perfect medium for sales.

While eBay, TicketMaster and Yahoo could potentially threaten StubHub as there was no intellectual property protection in the process or software in use. They would mostly overlook this opportunity because of the customization required for events ticket sales, complications involving state and local law and conception of too much work for too little reward in their perspective. The "brick & mortar" brokers were the real threat to the success of StubHub in this secondary ticket-selling market.

Fluhr and Baker were aware of the regulatory environment governing the resell of ticket and how it could be the major obstacle in fundraising with their investor hired attorney to draft an opinion. The attorneys' finding stated the secondary market was in fact generally legal. Fluhr and Baker had also carefully studied that brokers with good client relations often had high-end clients in their profiles and StubHub could sway those customers to them by offering seamless transaction, more inventory and venue maps that brokers could not offer.

StubHub's growing competitor was eBay, with a gigantic user base of over 86 million

users; it is rather difficult for StubHub to compete for more quantities of tickets with eBay, nonetheless, they can compete

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