The Case of the Stubbed Hub

In January 2014, StubHub attempted something radical. Addressing the frustration of its customers, the online ticket reseller began including its bevy of fees in the first price a customer sees, rather than tacking them on just before purchase. Now when you click “buy,” a pair of tickets listed at $100 will cost $100, not $125. According to StubHub, customers said they wanted—and say they love—the transparency. But the change hasn’t improved sales.

Because StubHub, which generated $500 million in revenue last year, baked its fees into the list price, its tickets looked more expensive than those of rivals. Sales for the company fell more than 10 percent in the months that followed the pricing change, according to Wedbush Securities, as competitor Ticketmaster gained market share. StubHub further trimmed its profit margins by cutting its take from each sale. By November, Chris Tsakalakis, who championed the new pricing, was out as president. (He declined to comment.) Still, the ticket reseller has stuck with the policy, which spokesman Glenn Lehrman says is among the most popular moves the 15-year-old company has ever made.