Festivals face possibility of losing money held by ticketing firm for upcoming events after it files for administration.
Mike Wall
A ticketing firm that attempted to corner the festival market by pursuing an aggressive growth strategy is on the brink of collapse.
Festicket, which provides an end-to-end festival experience service, selling travel and accommodation packages alongside festival tickets, has filed for administration after officials attempting to save it conceded their efforts were likely to fail.
The situation has resulted in uncertainty for festivals awaiting ticket revenue from Festicket, as well as members of the public who have bought tickets through the platform.
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The firm's accounts reveal it lost around €35m (£30m) in the space of five years as it pursued "aggressive" growth - €9m in 2020, €12.9m in 2019, €7.5m in 2018, €3.3m in 2017 and €2.4m in 2016. As part of an aggressive growth strategy firms are typically prepared to lose money in order to become market leaders, before seeking to make the business profitable once they are established.
"Festicket has been through a planned investment phase with an aim to aggressively capture market share," the most recent accounts for the year ending December 2020 state.
"It is still loss making at this stage but has an agreed strategy with the board to deliver scale first and then profitability in the near term future."
Lost income
As part of efforts to save Festicket, a moratorium, preventing legal action being take against it for a 30-day period, was obtained by the firm last month to give it breathing space to pursue a rescue plan.
As a result all money from Festicket’s future events was frozen in its bank accounts, meaning it can neither issue refunds nor pass the money to customers, suppliers or ticketholders.
It is unclear whether or not festivals that sold out their 2022 editions through Festicket – including upcoming dance music festival Boundary Brighton – will recover their ticket revenue if Festicket goes on to become insolvent.
Co-founder of ticket agent Skiddle Richard Dyer wrote on LinkedIn that Festicket’s move into administration means “event promoters not getting paid and event customers left exposed to tickets potentially not being valid or refunds owed out of the window”.
“Another sorry day for the events industry,” he added.
People who have bought tickets through Festicket have taken to social media to complain about losing tickets, not being issued refunds and not being able to reach anyone at the company.
North Brewing Co, Leeds-based organisers of beer festival The Springwell Sessions who used Festicket as their ticket provider, said it has lost £25,000 as a result of the situation. It is attempting to crowdfund the lost income in order to go ahead with the event and protect ticketholders.
Another client of Festicket, New World Fest in Essex, has cancelled its planned event on 17 September in the wake of the death of Queen Elizabeth II.
It has offered ticketholders three options - to transfer their ticket to a nearby event the following week, attend a rearrenged New World Fest event at a date yet to be confirmed, or to seek a refund.
"You should be sent an email from your ticket provider for a refund," a statement on the website says.
"We cannot refund you as the ticket platforms hold the ticket money. You will be sent an email from them this week and you will need to check your junk folder."
Assets saved
Work is underway to save facets of ticket platform Event Genius, which was acquired by Festicket in 2019.
US-based platform Lyte has bought some of Event Genuis’ assets, including its technology platforms and employee contracts.
An update given to TheTicketBusiness said Lyte is “in the process of winding down” the existing Event Genius business, which “includes the appointment of an administrator to determine what monies will be on-hand to pay out unsecured creditors and promoter obligations”.
Lyte plans to continue providing its end-to-end event management technology while also offering Event Genuis’ platform to all its partners.
“In addition, Lyte is preparing a proposal for new agreements with [partners] which include plans to address what, if any, money you are owed by us,” the updated added.
What should ticketing companies do?
Festicket’s financial trouble comes as ticketing companies continue to report a post-Covid drop in turnover.
A spokesperson for Ticketsolve told ArtsProfessional that although the current climate feels precarious, ticketing companies must continue to invest in their people and product.
“The health pandemic presented challenges and uncertainties no organisation or ticketing partner could have imagined before,” they said.
“What we learnt is the importance of working with the times and not fighting against them.”
Ticketsolve says investment could take the shape of increasing support teams to help customers adapt to new circumstances or ramping up features and functionalities to create more flexibility for “if and when [you] might need to manoeuvre priorities and focus”.
They cited remaining customer-focused and building partnerships based on trust and loyalty as key to their own business development.
“We invest in our system and our team because of the meaningful assets they then offer our customers. Sometimes that means being brave and taking the first step and being bold in trialling new ways of working.”
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