LOS ANGELES (AP) - ScoreBig, an Internet startup that sells cut-rate tickets to sporting events and concerts, is trying to get bigger.
The name-your-price discounter is lifting the invitation-only restriction on its website on Monday and is launching an app for iPhones that highlights deals of the day in local markets. The app will work in San Francisco and Los Angeles at first, to be followed by New York.
The Los Angeles-based company launched its website in October 2010 with the goal of helping teams and concert promoters sell some of the 40 percent of tickets that go unsold for most events. It's like Priceline for live events.
Because it requires fans to bid on tickets, the site helps event managers avoid the embarrassment of slashing prices publicly to fill stadiums. But it knows well in advance when a venue is not going to sell out and, using a secret-sauce formula, it sets a minimum price known as a reserve so it can turn down bids that aren't high enough.
"We have a very robust algorithm and lots of data," including how similar events are selling and the price of tickets that are resold on the secondary market, says ScoreBig's vice president of marketing, Peter Sinclair.
ScoreBig was founded by SeasonTicket.com founder Joel Milne and a former NBA business development vice president, Adam Kanner. It makes money by splitting the revenue on ticket sales with the ticket providers, which include venues, sports teams and concert promoters. It doesn't work with the biggest concert promoter in the business, Live Nation Entertainment Inc., or its ticketing subsidiary, Ticketmaster.
The service promises savings of 10 percent to 60 percent off the combined cost of the ticket's face value and fees. It charges no fees on top of the bid price and sometimes covers the cost of delivery if time is an issue. On average, site users save 44 percent, Sinclair says.
What separates ScoreBig from live human scalpers is that it never holds ticket inventory itself, so it doesn't have to absorb the cost of unsold tickets.
It also puts a limit on haggling. Website users get only one chance per day to bid on tickets at a given seat rating, although it lets you know if your bid is likely to be successful. It counters back immediately with a take-it-or-leave-it offer if your bid is just a little bit too low. On the app, users are blocked from trying to revise a failed bid on the same event for three hours.
The system helps keep offers respectable while giving people a discount. But ScoreBig and the ticket provider benefit when a person bids $53 for a ticket that the provider would have been happy to sell for $41.
The company has high-profile backers including former Facebook Chief Financial Officer Gideon Yu and Shari Redstone, the daughter of billionaire media mogul Sumner Redstone. ScoreBig has raised more than $20 million in startup capital, mainly from Bain Capital and U.S. Venture Partners.