Breaking Boundaries in Broadway: The TodayTix Story with Brian Fenty

0:00in the UK, home of Shakespeare, in the UK, theatre is a right. So as a result, pricing was always very affordable. It was always approachable. You could always get a ticket to a West End show for 15 quid. That's been true before TodayTix. It was true with TodayTix. It's true today. Even the hottest shows in the West End, you can get an affordable ticket. In New York, theater has always been more of a luxury product. It's not to say that there aren't amazing access initiatives, but it's always been a little more elusive. And so TodayTix has always tried to straddle that divide to offer. And remember, when we started, we were day of.

0:43A year later, we became week of. We now sell tickets a year out. We sell all price points. We sell the most expensive ticket in the front row to the least expensive ticket, which might also be in the front row if it's through one of our lotteries or our rush programs. So everything we do is about working with the producer and the audience to figure out that sweet spot for demand and viability for the show. Hello, I'm your host, Mike Gelb, and this is the Consumer VC Podcast, where we discuss the intersection of venture capital and consumer innovation. If you're enjoying this show, also subscribe to my newsletter at theconsumervc.com, where you'll receive new episodes straight to your inbox and a weekly recap of all the consumer deals that are happening, all the fundraisers, all the news.

1:30All content and episodes are for informational and entertainment purposes only and is not investment advice. Our guest today is Brian Fenty, who is the co-founder and CEO of TodayTix. TodayTix is a digital ticketing platform for theatrical and cultural events. We discuss the history of ticketing on Broadway, why Broadway wasn't doing a great job appealing to younger audiences, why during COVID they actually didn't pivot, even though live events stopped literally overnight, and what they did during COVID instead, as well as their acquisition strategy. This is a really fun one. without further ado, here's Brian.

2:10Brian, thank you so much for joining me here today. How are you? I am well in sunny London today. Oh, awesome. Sunny London. Love to hear that. Two words that never go together. Exactly. Exactly. Love that rarity. That's great. That's great. Um, let's want to start from the very beginning. What was your introduction to the theater? And also, also I'm really curious about ticketing as well. Yeah, I was introduced to both of them, sort of separately, as fate would have it. So as a kid in small town, Connecticut, wasn't very good at sports, wasn't playing video games, and happened to be in a school play when I was like four years old.

2:58and it was, it was the night before Christmas. And as a bit of a joke, they put me in a Santa Claus, a four-year-old, a Santa Claus. And it was sort of transformative for me though, because I never really left the theater in my young adult life after that moment. It was sort of like a sports team and that you're with all these great people who are supporting you of all ages. They're coaching you, they're shaping you. And I ended up doing about 55 shows over the next 12 years and really fell in love with theater. I stopped it at that point, never did it again. But it was a deep love of theater for much of my childhood.

3:44That's amazing. And I think that it seems like one of the beautiful things is that maybe is that you were in shows, you were an actor, but also then you also were involved on, I think, like theater productions, if I'm not mistaken, and you were a producer. And so you're kind of all around the theater throughout your entire professional life. Yeah, it's the truth is, and I say this to you and your listeners, but the truth is, I'm not a theater geek. I don't know everything about every show that's ever been written. You can't quiz me on the last great Broadway musical and how it compares to the 1950 revival of it.

4:27But what I do know is that it's an incredibly powerful tool at every stage of your life. And that being fortunate enough to be living in this world and in great cities and in And in America, for me growing up there and having culture at my doorstep, the arts just were transformative for me and blew me away. So when I sort of grew up through college and through business, and you asked where I learned about ticketing, I started working for the New York Yankees was my first job. And that's a big world stage for ticketing. And that journey really just always sat with me to come back and marry theater and art and culture with business.

5:11No, that makes a ton of sense. And how did you end up meeting your co-founder Merit? This is a very long time period, but a short story, which is we both met at theater camp in 1997 in upstate New York. He was from Florida. I was from Connecticut. We happened to take a three-week acting class. I'll never forget it. And we then spent the next 20 years in on and off communication, but re-kindled our friendship in New York City as young adults. I had just produced a Broadway show, Oleana, when I was 23, with Bill Pullman and Julia Stiles, two performers who I loved. and I sort of viewed it as my MBA.

6:00It was my grad school. So instead of going to grad school, I was working private equity by day and at night I was producing Broadway shows. And Merritt was at the time working at Lazard and then at Viagogo, the ticketing company in London. And we sort of said, God, wouldn't it be great to join forces and figure out how we can marry this really wacky combination of theater, banking, investing, entrepreneurship, ticketing. And that was the start of the relationship. That's awesome. That's amazing. And what was the opportunity that you saw that eventually became Today Tix? And maybe just a brief overview in terms of how Broadway is organized and what and what ticketing was like maybe prior to Today Ticks, or obviously it's still going on, you know, but what were you kind of seeing when it came to the opportunity?

7:00So when I produced Oleana when I was 23, you'd sit in these things called ad meetings where the producers and the ad agencies and the theater owners would all sit around a big table and they'd talk about what the sales were and they'd talk about, you know, sort of like a business and in a normal business, what like a trading meeting would be. And you go through how the business is performing. And invariably there would be this awkward moment in every meeting where people would say, Oh, we're not getting younger audiences. We're not getting that younger audience. What do we do? And the answer was always drop the price and put it at the TKTS booth.

7:39And so I started thinking a lot about that TKTS booth and I would walk in between, the office that I was working at in private equity again by day and walking at night to these meetings. And I'd walk past the TKTS booth and I did a little homework and came upon the fact that the TKTS booth in like 800 or 900 square feet was selling well over a hundred, 150 million of tickets. And that number blew my mind that that little booth in Times Square where we made 3 ,000 customers an hour wait in snow and rain and hail and heat to not even know what show they were going to get. And so that was sort of the epiphany that we had, which was in 2012, there was no such thing as a mobile ticket.

8:32So Airbnb existed, Uber existed, but there was no mobile ticket. There was no ability to explore and discover theater and art and culture on your phone. And so that was really the genesis of TodayTix was if we could create a great experience for consumers using technology, imagine the audiences that we can reach. So it seemed like in terms of when all these theater owners and the ad agencies were sitting around and thinking, okay, how can we get a younger audience in there? I guess the insight that you had just from how these TKTS booths were selling was, hey, actually younger people like the theater.

9:18um it's just that we're not actually able to um we're not and we're actually probably going to be able to make more money from them um because you know kind of like what what you do is you're kind of like deep discounting them um for them but there actually is demand there we're just not kind of capturing that demand in the right way and we're not actually seeing um getting um getting to them in that kind of transact moment where they actually should be which is you know maybe on their phone or don't want to deal with maybe paper tickets, want to do paperless tickets. And so was that kind of part of the opportunity and kind of the aha moment there as well?

10:00Do you want to come work for me? That was a great pitch. That was exactly how we thought about it. It was really this revelation that demand isn't always inextricably linked with price. Price is an important part of it, but price is only part of the equation, right? It's about this. This was a generation that was adoring and obsessing over beautiful mobile products. It was the start of the acceleration of the iPhone and the app phase. And so what we tried to do, one of our first values out of the gate was design first and design for the audience. So most ticketing companies always approached their business focusing on what the producers wanted, what the content creators wanted.

10:45Why? Because they hold all the cards. What we sort of said from day one was, let's tell the content creators that with TodayTix, if the audience wins, the producer will win. Because if the audience wins, they will buy the ticket, they will come back to the theater. And remember, for younger audiences, you might only see one show a year, two shows a year. So you have to have the data and the sophistication to be able to hold on to those consumers over a very long period of time. And that's really at the heart of it. The other piece was theater is a$9 billion industry in the US alone. But if you combine it with opera, dance, performing arts, it's about$16,$17 billion, which is twice the film box office.

11:35It's a little bit smaller than the sports and concert arena. And so you create this really interesting dynamic where theater is viewed as a small mom and pop business, but it's actually a commercial workhorse across the country. No, that's really interesting just in terms of how you're thinking about the market as well. And what was kind of the old way in terms of ticket selling? Was it you had it on your website, on the theater site, and you had to kind of, I guess, pay through the desktop or obviously, go to the venue and actually purchase the ticket. Was that typically how these theaters operated or was there already like a Ticketmaster lurking or somebody from those ends that would be kind of more competitive to you?

12:19Ticketmaster was certainly lurking. And it was something we were always wary of when we started the business. You don't normally want to go into a market where you know you're competing with an 800-pound gorilla who's ambitious and well-capitalized and all of those things. But our belief was, so first of all, the theater industry, you're exactly right. It was concierges at hotels. It was the box office. It was the TKTS booth. It was travel agents. It was groups. It was schools. And all of those things still exist today. But obviously over the last decade that we've been around, it becomes more and more technologically sophisticated.

13:00But the real innovation for us back then from just in its simplest sense is you could go to a show's website, but that meant you only got the customers who wanted to see that show. And the truth is only about 50 % of people know what show they want to see. They're going to New York. They live in New York. They want to go uptown. They might see a musical. They might see a play. They might not even know that they like something. And so we basically enabled what we call the ABCs, but we allowed a comprehensive list of all the shows to be on our app, whether it was Broadway, off-Broadway, uptown, downtown, one week out, one day out.

13:40And so we really appealed, which no other ticketing company did at the time, and is still quite rare, where we created a marketplace where the shelves had everything stocked on it. You weren't going to a store with only one product. You were going to a store with all products. Yeah, that makes sense. I mean, I'm even thinking about it when I was growing up in DC, when we were going to New York. It's just, we wanted to go to a Broadway play. It's okay. we don't, we didn't know which play we wanted to go to, but, or, or musical we wanted to go to, but we wanted to go to a Broadway musical. Right.

14:09Um, and if it was one we knew even better. Right. But like, that's what we wanted to do. So, um, so having like that kind of sense of discovery that I'd imagine like a ticket master really isn't like focused on that. That's really up to like, you know, if they're dealing mostly in music and concerts, um, like that's, or the sporting events, that's, that's for them to kind of do the, do that promotion and to, and they don't have to actually make that make kind of the content around it. And so you all are saying, okay, this is more of like a sense of discovery and we're actually going to be kind of co-promoting it as well.

14:39Um, uh, to kind of, and it kind of aggregate that demand as, as kind of a one-stop shop. Yeah, that's exactly right. There's ticketing companies that, well, first of all, let's be honest, ticketing companies, especially before today ticks, but probably still to this day for a lot of people. Ticketing companies are viewed as utilities at best, necessary evils at worst, right? Nobody's like, oh, I can't wait to go into my ticketing app or I can't wait to go buy my ticket. And so we really wanted to spin that on its head from day one. And so I'm a big champion of what I call internally the six-star experience.

15:16So in theater, you can have a five-star review, but you can't have more than five stars. And what I sort of was thinking through with our team. And we've always hired from outside of the theater world. I mean, we love the theater world, but we always wanted fresh perspective from the best of consumer tech, the best of B2B, the best of SaaS, the best of product development, the best of digital marketing. And so what we would do and work with our teams was how do we earn that six star? How do we go above and beyond? So when we started, most people thought it was a bit of a hacky stunt, but we actually had concierge agents who would meet you outside of your theater in Times Square and hand deliver your ticket to you before you went in.

15:59Now, of course, nowadays that's been replaced with a fully mobile ticket. But when I read our Apple reviews and our Trustpilot reviews and everything in between, people still longingly miss that human connection. And so everything we do is always trying to find what are the things that really remove friction and elevate the experience so that you have an emotional connection with your ticketing company. And in our case, that's the TodayTix group and its brands. No, totally. And that's really, really interesting how you thought about experience and making it a very, very easy experience for customers.

16:38How also, back in the early days when you and Merit had this idea and maybe uh created like a beta and um and and it had this mobile app idea how did you convince these um because of course you you need the shows you need the tickets how did you convince these theater owners um um to actually um embrace um mobile ticketing and also have today ticks be the mobile provider and as well as what was the structure was it that every ticket needed to be on TodayTix or only a certain few needed to be on TodayTix? How did you all, what was kind of part of the negotiation or how were you able to kind of onboard them?

17:21So we have a value at TodayTix that is find a way or make one. And it used to be something like disrupt, but what we've learned is it's got a little more finesse than that now, but it's find a way or make one. And what I'd say to you, Mike, is we didn't win them over out of the gate. You know, luckily it's a free market and we could create the opportunity and we could disrupt ourselves by building really amazing technology and marketing and brand. But we had to go one theater at a time. Today we have more than 15 ,000 theaters and cultural institutions and we sell everything. If you're in a major city in the US, if you're in London, you're going to have an incredible time using TodayTix.

18:05But 10 years ago, it was theater by theater, partner by partner. Sometimes it was all inventory. Sometimes it wasn't. The one thing that we asked our partners for was a guarantee that it would be best in market pricing. It didn't need to be cheaper, but it had to be no more expensive than anything else in the market. Because we had seen with some of the secondary ticketing companies that you'd buy your ticket online. I remember my parents, right? They bought a ticket online. They thought it was a real ticket. It was, but they thought they paid a fair price. And when they got to the theater and they got the ticket, they looked on it and they said, oh my God, we just paid 180 % markup on that ticket to a show that's not even the hottest show in town.

18:50And my view and Merritt's view early on was if you do that enough to a customer, they'll go do something else. You know, I jokingly say to my team, our competitor is not another ticketing company. Our competitors are Netflix and a pitcher of margaritas, right? It's the ability to do anything else with your time. It's not the theater goer. It's about what's a young person, what's an old person, what's a person of the world, what are they going to do with their night? And our job is to take away every excuse possible to say no to what we sell. No, that makes sense. I mean, how also do you deal with scalpers or people that are buying in bulk in order to resell?

19:34I mean, obviously, we've seen this on a few tours this year, at least in music that have really gotten the headlines with people kind of buying in bulk and then reselling it and making outrageous amounts of money. But how do you think about this question? So the good news is by always being pro-customer first, pro-audience, we just don't stand for that. We've never sold a ticket at a markup. We've built our technology to be anti-bot, to be anti-broker, to not be a commercial engine for those to capitalize on, but to be for the audience, to be for the person who's going to actually put their butt in the seat and love the show, hate the show.

20:20It doesn't really matter what they think of the show, but that they're going to have an experience. And the good news is, and you asked earlier about the industry, while it's a very small industry, it's a great industry of people who have done this for their whole careers, who love it, who want to disrupt themselves and innovate and do what's right for the next hundred years. This is one of the oldest art forms in the world. And so, you know, culture and art and experiences, you know, we're all rooting for the same conclusion. So I'm very happy to say that we're one of a few players in the industry that can work elbow and elbow, arm and arm with the people who run the industry and help us protect it.

21:02How also, I know that now you're in thousands upon thousands of theaters, and I'm sure you have theaters coming to you instead of you going to them saying, um, Hey, we want to, you know, um, use your platform and everything, which is, you know, fantastic. And you're kind of being able to kind of aggregate that supply, uh, since you have a demand, which is great. Um, but how in the early days, how did you also think about expansion, um, and making sure was, was it, let's expand as quick as possible. Let's, um, first really, um, um, at what point, for example, in New York, did you say, okay, now we can go to like a new market or a new region?

21:41How did you think overall about growth? We were very precious about it for the first few years, and then we let it rip. But let me come to that in a minute. So we were very precious about it in that you've heard the phrase MVP. Everybody loves to talk about a minimum viable product, and they celebrate it and it's sort of, you know, they put it on their plaque above their desk and it's like the ethos of the teams. And I have a phrase that crosses that out, which is if it's too minimal to be viable, it's not a product. And so what we really spent the first few years doing was not letting perfect be the enemy of the good, but really building an amazing product, making sure that you can buy a ticket in 30 seconds or less, making sure that customer care could respond to you instantaneously, having that concierge experience, having the inventory that was priced in a clear way and being transparent with fees and with, you know, look, I've never been a believer that we could have no fees, right?

22:49That's not a viable business. So I've always said to my team, we're going to have fees, but we have to earn them. The customer always has to feel like that fee was worth so much more than not being able to buy through us. And so that took a few years to get that done. The next opportunity in 2015, late 2015, was going to London. It made a ton of sense to go to London, right? It was the, depending on how you want to look at it, the second or the first great theater city in the world. And I'm not going to get in the middle of that. I'm not going to get in the middle of that debate. But they're both exceptional markets, right?

23:24And they're both of a similar size and they both set the tone for the industry and for the commercial viability of the industry. And so we went to London and we launched there. And I'll tell you, Mike, happily, and this is the power of scale and the power of a flywheel and a network effect. By the time we launched in London, we were no longer viewed as a ticketing company in the industry. We were viewed as a marketplace for demand. So we were known as a data company. We were known as a company and a partner that could go out and get the audiences and build lifetime value that would help the industry.

24:02So we launched in London in 2015, not theater by theater, but with the entire industry already signed up. And it was a really powerful opportunity. And we were sort of off into the races from there. When you expanded to London, what were some of the differences in terms of maybe how the industry is constructed between Broadway and the West End? And was it, is it quite similar? Is it quite different? I don't know if like, if it's more maybe fragmented in London versus on Broadway, or what were, I guess, maybe also like some of the challenges when you did expand to London? Early on, and there's less discounting nowadays in the industry at large because there's dynamic pricing and we're all smarter about how to navigate yield management and how you can create value for a show.

24:59But in the early days... And dynamic pricing didn't really exist prior to TodayTick since you weren't using algorithms in order to base your ticket prices. Is that right? Yeah, it was fairly crude. There were some shows that were very good at it, but it was crude. It was sort of, oh, it's a Friday night, let's charge more. It wasn't algorithmically driven. It's come a long way, but I think that the main differences, the industries are very similar from our lens, which is that audiences, 50 % of audiences know what they want to see and 50 % of their audiences don't and figuring out how to communicate and both through algorithms and through discovery, educate consumers to find a show that they might like.

25:50That's always been sort of the challenge in all markets. But the main difference was in the UK, home of Shakespeare, in the UK, theater is a right. So as a result, pricing was always very affordable. It was always approachable. You could always get a ticket to a West End show for 15 quid. That's been true before TodayTix. It was true with TodayTix. It's true today. Even the hottest shows in the West End, you can get an affordable ticket. In New York, theater has always been more of a luxury product. It's not to say that there aren't amazing access initiatives, but it's always been a little more elusive.

26:32And so today, Tix has always tried to straddle that divide to offer. And remember, when we started, we were day of. A year later, we became week of. We now sell tickets a year out. We sell all price points. We sell the most expensive ticket in the front row to the least expensive ticket, which might also be in the front row if it's through one of our lotteries or our rush programs. So everything we do is about working with the producer and the audience to figure out that sweet spot for demand and viability for the show. At what point did you need to raise capital? And what was the, how did you think about who were the right partners to part with?

27:13I know that both you and Merit both kind of came from the finance world, PE and what, investment banking with Merit, I'd imagine. Yeah. So what was your strategy for raising money? So my mentor, and I'm happy to say a friend, is Danny Meyer, the great restaurateur in New York. And it's also my favorite business book. Again, business school crash course is Danny's setting the table, which I reread every year or two. And there's something Danny said to me, which I've often quoted. And it's not rocket science, but that's sort of the magic of Danny is he says everything in such an accessible way that's like, oh, why didn't I not think of that?

28:04And it was, you get to choose who's at your dinner table. and I thought that was really powerful because so often as a young entrepreneur and remember that we were a theater ticket company that's well we thought we were a data and demand tech company in a marketplace investors and VCs thought we were a theater ticketing company so they weren't racing to invest in us early on and so you'd think that we would have basically had to do whatever we had to do to raise money. But instead I thought about Danny's words and I went to a group of investors who had known me and supported me in my traditional career, if you want to call it that, my pre-entrepreneurial career.

28:46And I went to them and I said, look, it's 10 guys, it's$50 ,000, 10 people,$50 ,000 each. And we're going to try to disrupt a really archaic industry. And I can't promise you it's going to work, but we have a very clear vision of what the impact of this product will be if we do it. And we think that it will help communities. We think it will help cities. We think it will drive great revenue. We think it'll be a transformational data business. And I'll tell you, we made 10 phone calls and we got 10 yeses. And that was$500 ,000. And it got us basically through what most people would call the bootstrap phase, but it basically got us through building a product, having enough capital to drip it into the market.