If you’ve flown on a major airline in the past few years, you’ve probably seen someone using a mobile boarding pass, or maybe even used one yourself. But mobile ticketing still isn’t universal, especially in the U.S., despite the ubiquity of smart mobile devices. Apple’s Passbook app, which launches on Wednesday with iOS 6, already has some big names on board, some of whom believe that Passbook will give a swift push forward to the mobile ticketing industry.
More than half of all U.S. adults own a smartphone. But using them as a replacement for paper tickets and wallets still hasn’t found a home in the mainstream — see the slow adoption of Google Wallet(s GOOG) as an example. While this shift will happen eventually, in some industries, it’s a little slower than many would like. Many airlines still don’t take mobile boarding passes. Amtrak, which sees tens of thousands of riders each day, didn’t start scanning mobile train tickets until this summer. And when it comes to showing tickets at sporting events, it’s very hit and miss.
Many companies are chomping at the bit for anything that will drive customers to their mobile apps or sites. The appeal for movies, travel and sports is clear: When you arrive at the venue attached to your ticket, the location-aware iPhone will pop the pass right up on your screen for easy access and scanning — no paper required. For businesses this means faster, more convenient transactions, better data about customer behavior, and more accurate management of empty seats or cancelled tickets.
Early Passbook adopters
Fandango(s CMCSA) worked with Apple(s AAPL) on Passbook before launch. Fandango is the biggest brand in online movie tickets, and it’s also been at this mobile ticketing thing for a year. While there are 2,600 theaters in the U.S. that can accept mobile Fandango ticket, the number of moviegoers redeeming tickets via a mobile device is still pretty low: only around one-third of those theaters see as much as half of tickets scanned via mobile device.
In other words, there’s much room to grow for mobile tickets at movie theaters, a place visited by two out of every three people in the U.S. and Canada, according to the MPAA. So Apple basically endorsing mobile tickets is encouraging to companies like Fandango. “Passbook is interesting because it brings this to the forefront,” Jessica Yi, chief product officer at Fandango, told me.
An industry that’s not nearly as far along as movie theaters is sports.The folks at StubHub(s EBAY), the online and mobile marketplace for event ticket resellers, sound even more hopeful about the impact Passbook will have on their transition to mobile. The market for reselling tickets is valued at about $10 billion a year, and half of that is being done online through services like StubHub. Still, only 20 percent of their business is on mobile, said Mehdi Ghazizadeh, StubHub’s senior director of software engineering, in a phone call.
“We’ve gone from zero to 20 percent of traffic being generated from mobile in two years,” he said. The big thing holding a fuller transition to redeemed tickets via scanned barcode is inconsistently deployed technology at venues. Attendees, meanwhile, have been pushing for the convenience of mobile ticketing.
“The fans are demanding it, and this is going to be the catalyst, the driver by which venues will finally accept they have to accept this technology at the gates,” Ghazizadeh said of Passbook.
As if to prove this point, when StubHub’s Passbook integration goes live in a few weeks, it’s starting with just two partners: the University of Texas and Purdue University. Tickets to events at those schools, which are outfitted with the appropriate barcode ticket scanners, will be the pilot program before StubHub’s Passbook option rolls out more broadly to other sports venues between now and early next year.
Outsourcing Passbook integration
Not every company has the in-house development teams that can build Passbook-ready tickets. Enter companies like Tello, which is planning to offer its services for airlines, venues, or any brand that want tickets or passes to work with Apple’s app. Tello’s product is called PassTools, is a WYSIYG-style tool that lets any company build a single pass or thousands of tickets in just a few minutes.
Tello is charging $99 per month for up to 1,000 passes issued each month, $999 per month for up to 20,000 passes. For businesses requiring more, they’ll negotiate. Tello isn’t the only company trying to build a business off of creating Passbook passes — there’s PassKit and PassSource too.
Like StubHub, Fandango and others, these companies see Passbook as an easy way to push the mobile industry forward.
“Eveyrone realizes if Apple does this well, this could be in the hands of millions of consumers very quickly. So they’re asking, ‘How do we particpate in this?’ I think you’ll see pretty rapid adoption later this year, early next year,” said Joe Beninato, founder and CEO of Tello. “Most large companies will be figuring out their Passbook strategy at that point. Some already are.”
Disclosure: Tello is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.