We often get the question “Why does the TicketPeak e-ticketing software system cost much less than most other ticketing software systems?” The fact is, in our opinion, most ticketing systems are overpriced. Consider the question: How much a ticketing system should cost?
This question can be addressed from several different dimensions: What is the value to the organization using it? What do competing systems cost? How is other ticket software priced? What price is required for the ticketing software company to cover its costs and make a reasonable profit? Let’s take a look at each of these.
What is the value to the organization using it?
Of course, there is enormous value to high schools, colleges, community theaters and commercial theater companies using a ticketing system. Unless one wishes to rely on an army of volunteers and inconvenience to ticket buyers, a ticketing software system really is necessary. Doing ticketing manually nowadays would be high cost and would result in capturing only a portion of the sales which you can get. So if this were the only question ticketing systems would be priced extremely high.
What do competing systems cost?
Most ticketing software systems charge several dollars per ticket. A typical price is one dollar per ticket +2% of the ticket price. So, an organization selling 10,000 tickets in a year at $25 per ticket would spend approximately $15,000 on the ticketing system. Note that 10,000 tickets in a year would be for the medium sized theater organization, so $15,000 is a very significant amount of money for such an organization.
How is other software priced?
Most software these days is web based and is priced on a per user per month basis. For example, salesforce.com charges $50-$75 per user per month. Intuit charges a similar rate for their cloud-based accounting software. An organization producing events would likely have two or three users from the box office. A price of $50 per user per month would result in an annual cost of $1800.
What price is required for the software company to make a reasonable profit?
That depends of course on how the ticketing software company manages its costs. In my opinion, younger companies typically have a lower cost structure because they are able to leverage web based work models. For example, at TicketPeak, we have few “permanent” employees. Our programmers are contractors, even though many of them have been with us for many years. Administration and support is provided by virtual assistants working out of their homes.
When we were deciding what to charge for TicketPeak, we looked at all of these factors and concluded that the most important factor was to get the price as low as possible so that organizations that may not have considered automating ticketing can in fact enjoy the benefits of a leading but affordable ticketing system. Compared to other ticketing systems, we are low cost. However, compared to other types of software and given our low-cost operations, the pricing is appropriate.