WASHINGTON'S LEADING BUSINESS MAGAZINE

Brown Paper Tickets Takes On Ticketmaster

Fast Growing Brown Paper Tickets is feasting on Ticketmaster’s crumbs.
Myke Folger |   March 2011   |  FROM THE PRINT EDITION
Brown Paper Tickets president and CTO William Jordan, left, and CEO Steve Butcher are no strangers to David and Goliath battles.

Brown Paper TicketsPhotograph by Hayley Young

In many ways, what Brown Paper Tickets CEO Steve Butcher and CTO William Scott Jordon are attempting is a Sisyphean affair at best.

Dethrone Ticketmaster? Fat chance. It grossed $372 million in the fourth quarter of 2009 alone, providing tickets on a global scale for just about any major act coming to a town near you. Ticketmaster is so huge now, it focuses only on big game: the U2s, Rolling Stones and Kenny Chesneys of the world. This is the same company that practically doubled in size in 2009 when it announced a merger with its closest contender, Live Nation, making it the largest promoter/ticket-seller in the world.

Unseat the leviathan? Never happen.

But that’s not what Butcher wants. While Ticketmaster, in the wake of that megamerger, zeroes in on Mick Jagger’s lips, Brown Paper Tickets, a company of close to 70 employees, is gleaning the remnants and launching a creative online offense.

“When the Department of Justice was doing research for allowing the merger, they called us and we spoke to 35 lawyers at one time,” Butcher says from his office in Fremont. “They asked what we thought, what we anticipated. At first, we thought it would be a big, powerful company, but on the other hand, it was a strategic retreat for them.”

Ticketmaster’s decision to merge actually helped shape Brown Paper Ticket’s business plan. Butcher knew that if the merger went through, his company would have the selling advantage with club owners using Ticketmaster’s competition for ticketing. The angle? Charge a smaller service fee, which would leave “millions of dollars a year in the pockets of ticket buyers and event producers,” Butcher explains, embracing the notion that ticket buyers would use that leftover cash to pay for more shows.

While Ticketmaster locked up the regnant stadium events, Brown Paper began scooping up smaller shows. Lots of them, ranging from shows in midsize theaters to, quite literally, home events. One customer on Long Island went through Brown Paper to service regular dinners for eight. That range, Butcher says, has allowed Brown Paper to open up a market that didn’t exist before, where smaller venues are afforded a platform from which they can broadcast their events—without having to attach excessive service charges.

One of Brown Paper’s priorities was to reduce those sizable service charges most customers