Eliminating the paper trail

The mobile handset may become the mainstream ticket of choice within the next three years, according to Juniper Resesarch. In a report released this week, the analyst firm found that transport-based mobile ticketing will grow from 37.4 million transactions in 2007 to more than 1.8 billion by 2011, with the Far East and China making up 73% of the total transactions worldwide. To date, the most activity has come from the mobile ticketing transport sector, especially in rail and air travel.

Operator trials and deployments in the travel industry in North America, Western Europe, the Far East and China regions have begun to move into real commercial deployments by the ticketing and coupon owners, including Ticketmaster and International Air Travel Association. The report found that key drivers for the market include a need to reduce operating costs of the transport providers by reducing staff and building space, as well as the consumers’ desire to cut the line. Mobile ticketing gives consumers the freedom to purchase and receive a ticket with little advance planning and often means skipping long check-in lines. According to the report, by migrating to mobile boarding passes, the airline industry can save $500 million each year.

The market for mobile ticketing is still fraught with hurtles in consumer acceptance, mobile handset’s limited real estate and technology issues. However, the technology challenges with respect to delivering and redeeming mobile barcodes are slowly being overcome with the emergence of near-field communications (NFC), a short-range high-frequency wireless communication technology that enables the exchange of data between devices over about four inches of distance.

The boon in mobile ticketing also comes as the wireless industry has been actively pursuing green strategies and looking for ways to reduce their environmental footprint. Eliminating the paper trial is a step in the right direction. Juniper also found that mobile tickets can actually fight fraud by electronically verifying users’ identity and purchasing history.
The mobile ticketing space involves a number of players, entering the market from different angles. While the early adopters have been the major organizations that control the issuance of tickets, including Ticketmaster, British Airways and Tickets.com, key operators and technology providers such as O2, NTT, DoCoMo, Vodafone, Nokia and Samsung are getting on board and forming partnerships with the ticket holders. More third-party vendors are starting to emerge as well, connecting consumers, operators and organizations for events, movies and promotional activites tied to ticketing.

In the United States, mobile ticketing company Stubhub is focused on enabling direct peer-to-peer transactions for people who have tickets to sale and people who want to sell them. The tickets can be purchased directly from the phone and delivered straight to the handset, independent of the venue. Based on sales volume, Stubhub is one of the largest ticket marketplaces in the world. Its global competitors include companies like Trinity Mobile, Mobiqua and Impact mobile, although most are focused outside of the U.S. where the market has seen more traction.

Michael Mak, founder and CEO of mobile marketing and ticketing company bCode, said that his company has a different focus in the U.S. market than it does internationally, based largely on the different market demands. In the U.S., the focus is on marketing – clients like Ikea and Harrahs use bCode to send out coupons that can be scanned and redeemed in-store. This is ideal for real-time, location sensitive offers that paper would be inadequate for. Whereas originally, he thought ticketing seemed the intuitive place to start, companies were placing their bets elsewhere.

“Initially, we thought ticketing was the killer app first and we’d do marketing later,” Mak said. “Turns out for U.S., the marketing is a lot more interesting. Every year, people are looking for new ways to relate to the customer. Mobile is the new thing. Ticketing, while it is cool, the ticketing companies don’t really have an urgency to bring new ticketing technology to the customers. We are competing with other operational budgets. For the marketing, we have become a higher priority.”

Mobile transaction and marketing company Mobile Box Office (MBO), which came onto the scene in January of 2006 with a focus on doing mobile ticketing for movie theatre chains, Emagine and Landmark Theatres, is hoping the opposite is true. The company has a patent on the intellectual property for an RF device that allows consumers to verify their ticket with a wave of the phone, but MBO executive Anthony Vaness said he doesn’t think consumers are ready for this yet. Concerns over identity theft are still too great. For now, the company is focused on barcodes – an area it has seen a lot of success in.

“We’ve pushed the barcodes because it is more tangible,” Vaness said. “If you go to concerts or sporting events, it is common to take your paper ticket and they scan the barcode, so it is an easy evolution to making the phone-top your ticket.”

While MBO is focused on the movie scene right now, Vaness said its platform allows them to do anything related to mobile marketing or transactions, such as coupons, transactions or gift cards that can be used for payment and recharged on the mobile handset.

“When you look at phones, they are just now evolving to the one-work device,” Vaness said. “Your mobile device now is really becoming your laptop. The iPhone has absolutely accelerated that emotional conception as your phone being the business tool. It is real easy to open up a spreadsheet or document to drag it across the screen. Now I think the rubber is going to start to meet the road for us because basically when you look at the iPhone and other cellular devices that are coming into the market, people are ready to leave the laptop behind and truly have a one-work device.”