As one of the most established names in event ticketing and event planner software, Eventbrite has built a loyal community of users since its founding in 2006. Many users have turned to Eventbrite for convenience, name recognition, and the ability to easily host events of all sizes. Specifically, smaller events have often been included under Eventbrite’s free plans, making the service more appealing to casual event hosts. Recently, Eventbrite surprised many users with some significant changes to their payment tiers. Eventbrite fees have now been extended to many smaller event hosts, and this has led to a number of former customers taking to social media to search for Eventbrite alternatives.
The saddest thing about @eventbrite changing their pricing plan will be seeing all the amazing small charities and community events grind to a halt because they want to eek out a few extra bucks...— Matt (@mattlosvert) August 3, 2023
Is there any benefit to using Eventbrite over all the other ticket sites that do the same thing but charge the customers less in fees? Pricing it out, their fees are something like 30-40% higher than some other options.— Adam Lash (@newfoundmass) February 25, 2023
Perhaps the biggest impact of these changes was to longtime Eventbrite hosts who have been relying on the platform’s free option to support their business model, fundraising, or social lives for years. While changes in fee structuring or subscription options are nothing new for any digital business, the far-reaching impact of new Eventbrite fee and subscription tiers may be causing a backlash purely because of how many of Eventbrite users fall into this formerly free camp.
Since Eventbrite long operated on a freemium model (one that allowed users to use a basic level of the platform’s features, with an eye toward encouraging loyal users to upgrade eventually), the switch to an exclusively paid model was always going to be responsible for shockwaves. But it’s worth exploring some of the company’s previous challenges and key strategic decisions to understand why such a seismic shift in operations and customer relations may have been made.
For current and long-time Eventbrite users who were caught flat-footed by this fundamental change in the company’s business model, it’s important to remember how companies evolve from startup stages into the current publicly traded version of Eventbrite.
As an event software startup, Eventbrite spent the first decade of its lifespan focused on growth. Startups are measured critically by their growth trajectories (revenue projections, new users, brand reach, and more), which meant that for years, Eventbrite designed its model to attract as many new users as possible – regardless of their lifetime customer value.
For Eventbrite before the company’s IPO in 2018, a majority of the focus in terms of features and new product development focused on event creators. The reasons are fairly clear – without tons of events being hosted on the platform, other potential new customers wouldn’t see it as an appealing place to potentially host their own events, which was essential for Eventbrite to draw new users (and thus growth) to their platform.
This focus on event creators was also evident in offering such a robust free option for new users. Without a paywall driving potential users away for even the smallest events, more and more event hosts gravitated to Eventbrite’s convenient event ticketing tools and the platform grew exponentially up until the COVID-19 pandemic, when it experienced the same seismic challenges to its business model as any event company.
This isn’t just hypothetical. Eventbrite investor letters revealed that up to 70% of tickets being sold on the platform were “free” at times, meaning that Eventbrite was not reaping revenue – just attracting new and frequent users. Even in their most recent investor letter, over half of users fell into this free camp.
In addition to the challenges of increasing profits from a large free user base, Eventbrite also faced another issue in terms of their long-term plans. With the primary use case of the business being enabling ticket sales for event creators, Eventbrite also was challenged in terms of the margins it could reasonably command from any individual user. Ticketing fees require thousands of individual tickets to be sold to generate significant revenue, and with higher tier plans only appealing to frequent or large event hosts, subscription fees were also limited by the existing model of the company.
This confluence of factors (a huge free user base, marginal revenue streams, and limited subscription interest) at a time when Eventbrite needed to start demonstrating profitability to investors created the ingredients for this recent major shift in their business model.
After becoming a publicly traded company in 2018 with the associated investor expectations of profitability and revenue growth, Eventbrite was faced with some critical decisions. With aspirations of becoming a “Rule of 40” company (often benchmarked with 20% year-over-year profit growth), finding new and more lucrative revenue streams or reshaping existing ones to be more profitable was essential.
The most noticeable example of this philosophical shift in the company is the increasing focus on offering marketing tools to event creators to attract potential attendees for events. These included:
What do these various initiatives have in common? A focus on transforming the main use case of Eventbrite from enabling ticket sales (and thus, being reliant on ticketing fees as in the past) to more lucrative subscription models. Not only do subscription models offer more reliable monthly recurring revenue, but the margins in terms of investment on Eventbrite’s behalf are significantly higher as well.
Put in simple terms, the same amount of effort for a Flex or Pro subscriber in terms of marketing or development/software is worth much more to the company than simply enabling 200 tickets to be sold at an event. This led to the central question that Eventbrite was willing to take a bet on in terms of profitability – enough current and new users would be willing to become subscribers to continue using the platform’s well-known ticketing features, as well as new marketing tools, to offset the loss of users who had relied on free events in the past.
It’s a bet that we’ll see play out over the coming months for the company, and one that is critical in terms of the company’s long-term performance on the public market.
Starting in July, new event hosts in the US, Canada, Australia, New Zealand, and more were transitioned to a new Eventbrite fee structure. Under the new fee structure, only events with less than 25 tickets are still free. For events of any type expecting more than 25 attendees, you have two options. Here’s a quick snapshot of what those options look like – learn more about the new Eventbrite fees in our deep dive.