Qcue’s Derek Palmer: Live events “were the first to close and we’re likely the last that’s going to come back in full. We need help.” (Courtesy Qcue)

Company’s specialty can help organizations in comeback, Palmer says

Austin, Texas-based Qcue is a pioneer in dynamic pricing and has significant market penetration in Major League Baseball. Derek Palmer, the company’s chief operating officer and an INTIX board member, explains that Qcue was launched 13 years ago and was the first to bring dynamic pricing to sports and entertainment. The initial product was successfully launched by Qcue, Tickets.com and the San Francisco Giants and has expanded to more MLB teams, all of the other major sports in North America and the performing arts sector. Qcue also has international clients, including a leaguewide deal with Australian Football League. Palmer recently gave an update on how the operation has expanded and offered some insights into the state of affairs in ticketing and beyond.

How has the company evolved since 2007?
In addition to expanding into other verticals with dynamic pricing, ultimately, we’re a software company. We’ve developed other products as well. Our goal is to try and identify inefficiencies in live entertainment and develop new software to solve them. So, in addition to dynamic pricing we’ve created some products that help people manage their inventory just in general, kind of utilizing data science, algorithms and distribution.

This last year we announced a partnership with AnalytixLive, which is entirely focused on performing arts, which is not a place where we’ve had significant penetration. The idea was to grow that market with our application and their existing market share. Then, near the end of last year, we acquired EverFest, which is very focused in the festival space. Pure dynamic pricing may not be that applicable to festivals, but we think there’s a real opportunity, especially with the platform we acquired, to grow the overall ecosystem. Not necessarily the very top end of festivals but maybe the smaller, more regional, home-grown festivals, and we’re seeing a lot of traction in that group. Now with major events being shut down, more hyper-local events are starting to come back a little sooner. 

Is dynamic pricing something that will continue to be useful in the COVID-19 era? What lies beyond this pandemic for live entertainment?
If you look at sports teams, they can kind of look at a schedule and try and figure out what the pricing should be, then they can use dynamic pricing to react and to influence and try to maximize yield as much as possible, but with the unknown around what capacities are going to be and the kind of start and stop potential of the various sports, all those data points are kind of thrown out the window. We are particularly well-positioned to help organizations learn and be able to react as quickly as possible rather than doing things manually or relying on what may have been the quote-unquote knowns previously.

It’s a brand-new day and so I think you are going to find — not just for pricing, but obviously that’s our focus —  that organizations have to be really creative in how they look at how they engage with their consumer. Make sure that they’re safe, first and foremost, and within the constraints of safety guidelines. People have to make money, and the way that you can do that isn’t necessarily  about really high ticket prices, because as we all know the economy is struggling and people have to make very strong decisions about where they spend their money, So it’s really about being smart, and that’s what dynamic pricing is about. It’s not always about maximizing the highest price. It’s about maximizing the right price and trying to find the right price within each section of the arena or the ballpark or whatever it is so people can come and feel like they got a good deal and the organization is able to maximize the yield they were able to get out of every seat.

It seems venues are whipsawed between needing to upgrade capabilities in terms of ticketing, security and other aspects of operations in this new world but at the same they lack revenue streams to pay for them, so what’s a venue to do at a time like this?
I’ve been in this business for coming up on 30 years. A lot of us are on calls every week trying to help each other because this industry is a family, as I’m sure others are, but in live entertainment you’re seeing this organizational effort, led by INTIX or NIVA, all the people trying to get out there and raise awareness that the live event is not just the person on the stage or the team on the field. There’s a statistic (that) it takes up to 500 people to put on a live event, anywhere from the promoter, the insurance, the accounting, the people who work the gates, the people who clean up, ushers, all of those different things. 

We’ve all lived through a small version of this, whether it’s a work stoppage in sports or maybe there’s an actors strike on Broadway, and that impacts a portion of the industry, but there’s never been anything like this where basically the entire spigot of live has been turned off now going on six months, and really, worldwide. Those organizations I mentioned are really trying to highlight that because we are not an industry that has reached recovery yet. People have talked about the PGA Tour being able to play and NASCAR is able to (race), or the NFL, but if there aren’t fans, we can’t generate revenue and survive. It’s a clear distinction of talking about where we need governmental assistance.

What was done previously with the SBA relief and the PPP was great for organizations and industries that are now starting to come out of this and that was a bridge, but we’re in many ways no closer to coming back to being at full strength than we were on March 13. That’s why we continue to highlight things like the RESTART Act or the Save Our Stages Act, to make sure that Congress understands that in many ways we have been the hardest hit segment of the economy. We were the first to close and we’re likely the last that’s going to come back in full. We need help. There aren’t organizations that I think can just do the necessary changes while answering to the guidance of the (Centers for Disease Control and Prevention) to keep everyone safe, which is obviously paramount, and still survive.

If you look at some of the bailouts and money that we’ve given to other industries — airlines are a great example — there needs to be a focused effort on live entertainment. If there isn’t, then when people find they are able to come back … these places simply won’t be there or people that know how to put on these events won’t be in those jobs and it’s disheartening to see other countries invest and understand that. Unfortunately, in the U.S. we haven’t gotten that yet. I know that everyone’s doing the best that they can. Like I said, a large number of us speak weekly about the different things we can do to support each other, but at the end of the day, if you can’t get people through the doors, you can’t generate revenue.

With reduced capacity, will the cost to attend live entertainment end up so high that only people with a lot of money will be able to afford it while the rest of us watch on TV or through streaming?
There’s been a lot of focus on streaming consumption. Some companies were very smart and were able to pivot to that pretty quickly, so now you are seeing small bands who have productions or individual artists being able to play. I think there’s two ways of looking at this. There are organizations that are looking at that as a short-term bridge until we get back and then there are others that are saying there’s one thing that’s been the limiting factor in live entertainment and that’s capacity. Maybe (streaming) is a way to remove that. There are some interesting ideas there in addition to just streaming a show. What if you got access to backstage interviews or the soundcheck? There are things you can do and there is a market. Netflix, Hulu have proven there’s a market for on-demand, subscription-type services. MLB.com, all these different things. How does that work with live? Not certain, but I’m certain that it can.

If we are counting on going back to the old model — not just the pricing model to the consumer, you have to talk about the guarantee to the artist, the rental fees to the buildings and the sheds, all of that needs to be looked at. For ticketing and distribution of content to be part of the solution, there has to be (a look) at new ways for people to consume the content. These drive-in concerts? Fantastic idea. I have no idea if anyone makes any money off of them, but it’s a great idea and that’s the kind of creativity (that’s needed). There will be a period of time when people are throwing whatever they can at the wall and like everything else a couple of things will come out and that will be the future. Then it’s up to people to adjust to be able to provide that. Just like any other innovation, if you don’t provide it and somebody else can, then you’re in trouble, because consumers are smart, and they go where they get what they want.

What other trends do you see emerging or gaining steam in the current environment?
I think timed entry is a really interesting thing because obviously it’s been around forever, but that also has evolved because of the pandemic. Previously timed entry was really about resource scheduling and making sure you understood what it was going to look like when people were coming through. It was about convenience. Now it’s about safety. We have been working with some organizations, primarily museums, looking at dynamic pricing with timed entry, and to be fair, we found it wasn’t critical prior to the pandemic. But coming out of this and the fact that there will be actual constraints around the ability for people to come and go, (dynamic pricing) becomes as important as it is for live sports. Everyone has operating costs and people need to make money and it’s not about gouging, it’s about maximizing the revenue and the yield that you can get so that you can run your business and, quite frankly, in many ways provide a better pricing option to the consumer. 

The whole concept about growing back the grassroots, the hyper-local events that people who can’t necessarily travel to a big festival or a big concert can feel safe to go to, I think there’s a real opportunity there for growth. There will always be the mega-show, although the economics of that might be vastly different than before, but this is an opportunity for people to step back and figure out how to best engage in a way that people feel safe with the content. As I said, it runs the gamut: What’s the pricing look like, what’s the potential timing look like, what’s the consumable content look like? Is it streaming? Is it whatever someone hasn’t thought of yet? It’s a time for us — assuming that we make it through this and I can’t focus on that enough, how hard this industry has been hit, how much we need help to get through this — but assuming that we do, and in some form obviously we will, we need to be creative. And we need to provide this content because it brings joy to people. There’s nothing better than live entertainment, going to see your team or a concert or festival or ballet, whatever people are into, and consumers are eager to get back out there and engage with that content again.