Eventbrite's Plan to Weather the Pandemic

Hey Trapitalists! Happy Friday. This week, my wife and I started watching the Miss America series on Hulu. I also watched a ridiculous amount of Quarantine Radio to prepare for yesterday's article. At this point I have Tory Lanez' ad libs down. I could be a stand-in if he needs one.

Today's update is a breakdown on how Eventbrite plans to weather the pandemic, and the much-hyped ESPN documentary The Last Dance. I attempted to write a brief recap on Kanye West's GQ interview but I chose not too (I briefly explained why at the end of the update).

Why Eventbrite may shift to do-it-yourself model

Last week, the event ticketing company laid off 45% of its employees, including 90% of its music team. In a recent interview, CEO Julia Hartz and Chairman Kevin Hartz discussed how this will impact the business.

From Billboard:

“We are not planning to exit music and we’re committed to serving independent creators,” says Julia Hartz.

 As difficult as the quarantine has been on both Eventbrite and its clients, it did grant the company more time to figure out its next move, with Julia hinting that Eventbrite could be pivoting back to a self-service ticketing product... 

The company doesn’t have the personnel for a full service ticketing model with hundreds of sales reps, customers service pros and event specialists. And after cutting $100 million in costs, it’s likely that company execs are losing their appetite for the large upfront fees and advances promoters expect to be paid. Moving to a low cost do-it-yourself model, with promoters using the same tools as event organizers and party planners, seems increasingly likely. 

“Eventbrite has always had a self-service ethos,” says Julia Hartz. “We're taking this time of dislocation to double down on making our platform better. 

Kevin Hartz adds that DIY merchant technologies like Shopify and Etsy have dramatically dropped costs for vendors and improved ease of use. 

“But it does require some change in behavior, which can be difficult,” he says.

That "change in behavior" is a disruption to the three tiers of service that Eventbrite currently offers:

A pivot to full DIY would eliminate that Premium tier. The key difference between tiers is the customer support offered. Customer support ain't cheap. In my Trapital podcast interview with Stem CEO Milana Lewis, we discussed how customer support costs led to its change in business model.

Similarly, Eventbrite justified the expense by charging more for it and only offering it to higher-end clients. This focus likely helped acquire and retain customers they wouldn't have otherwise. But with 'Premium' type events not happening until 2021, those customers will be treated like Essentials or Professionals.

It's an understandable transition, especially given Shopify's business model. But the ecommerce company isn't much different. Shopify larger retailers use Shopify Plus. Less than 2% of Shopify users are Plus, but they accounted for 27% of monthly recurring revenue in Q4'19.

The challenge is that Eventbrite and Shopify's top customers don't want to become DIY experts, even if it's easy. They pay for the luxury of not needing to master the platform. I've used both Eventbrite and Shopify for business purposes. They're relatively easy to use, but there is a learning curve for both. There's a market for those who want these services without wanting to roll up their sleeves, myself included!

But DIY or not, those live in-person events aren't happening right now. There's an opportunity for Eventbrite in ticketed virtual events, but the marketplace is still developing. I still feel confident that when society returns to the "new normal," Eventbrite and Shopify will still be best positioned to offer high-touch services to its top clients, who then subsidize the rest of their operations.

Why society loves the 1990s Chicago Bulls

This is a different topic than I normally cover, but I know that many of you plan to watch this. I also think there's an interesting insight here for some projects you may be working on.

ESPN's The Last Dance is the most-hyped documentary I can remember. Not even O.J. Made in America, had this much anticipation. Sure, the coverage is heightened in the absence of live sports. But the hype would be strong regardless. This is one of the most beloved teams in the history of American professional sports.

Society has been fascinated with the 1990s Chicago Bulls for decades. If you ask people why, the answers are basic: "Michael Jordan was so good." But this is deeper than greatness. Fox's Colin Cowherd talked about this recently. He had a few more reasons on why.

To summarize, his reasons were:

1. The Bulls are based in Chicago, in the heartland of the U.S. They faced less stigma than the teams on the coasts or the South.
2. Played to cultural norms. The northeast is "tough" and the Bulls physical style of play resonated with those viewers (even if they rooted for the Boston Celtics or Philadelphia 76ers). The west coast is about building what's sexy. It values big names and starsr. The Bulls had the most popular players and headline-worthy celebs like Dennis Rodman. The team catered to both.
3. They could win in so many ways. Great offense, defense, and coaching.

Those factors are legit, but those three aspects can still be achieved by one of today's teams. But that hypothetical team would never be as beloved as Michael Jordan's Bulls.

The key difference is timing. The Bulls are a lasting relic of monoculture. The late 90s were twilight years for mainstream media's uniformity in coverage. There was one dominant team without a consistent threat. One dominant superstar without a true rival. The space for Clyde Drexler or New York Knicks arguments had little room to breathe.

In today's era, those arguments would get plenty of air time. This started with the Foxification of news. That dynamic expanded in the internet era. There's now a voice for every corner. There would be talking heads who made living tearing down Jordan and elevating Karl Malone.

Think about the "media economy" created by LeBron James. His biggest stans got rich from their praise-worthy commentary (Nick Wright, Brian Windhorst), but so did his biggest haters (Skip Bayless). Today's fragmented landscape would diminish the Bulls' pristine images.

One of the most telling quotes came from Michael Jordan himself. Here's what he told The Athletic a few days ago:

When people see this footage I'm not sure they're going to be able to understand why I was so intense, why I did the things I did, why I acted the way I acted, and why I said the things I said. When you see the footage of [me riding with Scott Burrell], you're going to think that I'm a horrible guy."

This is a perfect reflection of 90s media. Academy Award-winning producer Matthew A. Cherry tweeted that "MJ being perceived as a nice guy by mainstream media for a majority of his career is one of the top 5 PR spins of all time." That's facts.

The documentary is a strong nostalgia play. But more importantly, it's the last of a dying breed. The success of this Bulls team will likely lead to expensive content created on other topics. Some of those may hit, but most of them won't.

This team was a true cultural phenomenon. Another team may come and surpass their wins and championship, but their legacy will be hard to top. It was a lightning in a bottle moment.

Kanye West's GQ interview

I intended to write a recap of insights from Kanye's GQ interview. This was now his second feature with a major publication in the past few weeks. His Wall Street Journal interview captured headlines too.

I sat down. I read it. But honestly, I got nothing remarkable to share about it! It was fine. I respect the level of reporting that went in it, but there was nothing out of the ordinary to report back on. Instead of trying to force a narrative for the sake of an update, I'll just share the link here:

‍Inside Kanye West’s Vision for the Future - Will Welch / GQ, April 16, 2020

I'll also share the Wall Street Journal interview in case you didn't read it. I found this one to be much more interesting:

‍The Creation and the Myth of Kanye West - Christina Binkley / Wall Street Journal, March 25, 2020

Hope you enjoy your weekend! Like many of you, I'll be watching The Last Dance on Sunday night.