The desire to experience live events, from cheering for a favorite sports team to singing along at a concert, is a fundamental part of the human experience. For decades, the process of buying and selling tickets was fragmented, opaque, and fraught with risk. It was in this environment that StubHub $STUB ( ▼ 0.89% ) was born, with a mission to bring liquidity, transparency, and trust to the market. By transforming this inefficient industry, StubHub has not only built a highly scalable and profitable business but has also positioned itself as a crucial and beneficial force within the live events ecosystem, making it a compelling long-term investment.

A Business Model That Makes the World Better

At its core, StubHub is a technology-enabled marketplace that seamlessly connects buyers and sellers of tickets. Its genius lies in its dual value proposition. For buyers, the platform offers a "never sold-out" experience, providing access to a massive catalog of events across over 90 countries. Features like the FanProtect Guarantee ensure every ticket is authentic, eliminating the risk of fraud that once plagued the industry. This trust and transparency empower fans to confidently purchase tickets for everything from a local theater show to a global music tour.

For sellers, whether they are an individual fan, a professional reseller, or even a content rights holder, StubHub provides a global audience and powerful tools. The platform’s proprietary pricing intelligence helps sellers determine the optimal price for their tickets, while its marketing expertise ensures their listings reach the right buyers. By managing end-to-end fulfillment, payments, and customer support, StubHub makes selling a ticket as easy as listing it.

This model benefits the entire live events world. By ensuring that fewer tickets go unused, it boosts attendance for venues and provides more revenue from concessions and merchandise. Ultimately, StubHub's success makes the world better by fostering the human connection that comes from shared live experiences and democratizing access to the events that shape our culture.

A Symbiotic Relationship with Live Nation

While StubHub operates in a competitive environment, it is not a zero-sum game with major primary ticketing players like Live Nation $LYV ( ▲ 0.14% ) . In fact, StubHub’s business is complementary to and thrives as Live Nation succeeds. Live Nation’s business model is built on creating, promoting, and ticketing events, which generates the initial supply of tickets. When a Live Nation concert sells out, it creates the very demand and inventory that feeds the secondary market. A healthy primary market, driven by successful tours and events, is the fuel for StubHub’s marketplace.

Furthermore, StubHub is strategically positioned to serve as a valuable partner to content rights holders, including those that work with Live Nation. Its "direct issuance" solution offers artists, teams, and venues a non-exclusive distribution channel to reach StubHub's massive and highly engaged global audience. This provides a new way for content rights holders to sell original issuance tickets and, more importantly, to sell the estimated $22 billion in unsold tickets each year.

This capability allows the live events ecosystem to operate more efficiently, maximizing attendance and revenue for all stakeholders. StubHub's ability to act as a crucial distribution partner demonstrates that its growth is not at the expense of the primary market but rather an expansion of the total market opportunity.

The Massive Flywheel of Growth

StubHub's long-term investment thesis is powered by a series of mutually reinforcing growth flywheels. The first is its core business of growing its global base of buyers and sellers. The more sellers StubHub attracts, the more inventory it has, which in turn attracts more buyers, creating a powerful network effect. The company is actively penetrating international markets where secondary ticketing is still fragmented and often offline, representing a $23 billion opportunity for long-term growth.

StubHub's ambition for growth extends far beyond its core business of reselling tickets. The company is poised to tap into a much larger market, with a total value of $726 billion, by expanding into new business areas. For instance, StubHub plans to make more money through advertising, since its users are already actively searching and ready to buy tickets. It also sees big opportunities to enter adjacent markets like sports betting and sports and music merchandising by forming key partnerships.

But the most significant opportunity is its direct issuance offering. This new service allows teams, artists, and venues to sell their original tickets directly on StubHub's marketplace, rather than just through traditional primary sellers. Having already surpassed $100 million in annual sales through this new channel in 2024, this move represents the beginning of a major shift that could change how event tickets are sold everywhere.

Concluding Thoughts

To sum it up, StubHub's business model is straightforward and highly scalable. It generates revenue by taking a commission from both the buyer and the seller on each transaction. This fee-based model on a massive volume of transactions has led to significant revenue, profit, and cash flow, which it can reinvest to fuel future growth. With a vast and expanding market opportunity, a successful and proven business model, and a mission that adds immense value to the live events ecosystem, StubHub is well-positioned for sustained success.

Source: https://www.sec.gov/Archives/edgar/data/1337634/000119312525060140/d225849ds1.htm#toc225849_12

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I am an independent personal finance writer and blogger. I do not have any formal training or certifications in finance, but I have a deep passion for the subject and have been researching and writing about personal finance topics for several years.

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I/We are looking to invest in STUB through Robinhood IPO Access.