The marriage of Ticketmaster and Live Nation:

norm

Say hello to the $400 ticket?
May 11, 2010 | 2:30 pm

A POP & HISS COMMENTARY

Monday was a historic day in the music business. Concert promoter Live Nation Entertainment posted its first quarter results as a newly merged company with ticketing giant Ticketmaster. Much of the post-earnings-call press has focused on the stats. The highlights: Concert attendance for the first quarter was down 3%, and the company's revenue from resale site TicketsNow has fallen sharply.

But listen carefully to the conference call discussion with Live Nation Entertainment Chief Executive Michael Rapino and there are hints about the controversial company's future. And they are far removed from some of the pre-merger talk, especially when Rapino and Ticketmaster chief Irving Azoff went before Congress and noted that 40% of all concert tickets went unsold.

Rapino told The Times last year: "In my business, the cheaper the ticket price the better. I'd love for more consumers to walk into an amphitheater, park, have a beer and eat a hot dog. There's no advantage to me to have anything but sold-out shows."

All sounds reasonable, and could lead one to believe a merger would be good for the consumer. The combined entities could use their data and power to better price concerts, and the fan wouldn't have to worry about being gouged. Why, just look at Live Nation's U2 tour, in which about 10,000 tickets per show were priced at an economical $30 -- binoculars not included.

So where is the company sensing a growth opportunity? Concert prices!

"Our fundamental belief at Ticketmaster/Live Nation is the answer to grow our business is less about trying to make $5 or $6 million in service fees off secondaries and much more important to figure out how to capture that $1 billion in up-sell on the face value of tickets," Rapino said during the conference call.

The exec was answering a question about TicketsNow, which came under fire last year after fans trying to buy tickets to see Bruce Springsteen said they had been redirected from Ticketmaster to the resale site, where tickets had a steep markup. The New Jersey attorney general's office launched an investigation, and as part of the fallout TicketsNow further separated from Ticketmaster.

"The minute we had to unlink from our website, that business over the last year has deteriorated," Rapino said.

Indeed, he noted that TicketsNow is currently bringing in about $1 million to $2 million annually. That's down from the $15 million it used to rake in.

Thus, the strategy going forward: "So, whether it's seat maps, dynamic pricing or just convincing the band that the front row is worth $400, not $100, we're noticing a great reception by artists worldwide who would like to capture more of the upside, and our first goal is to figure out how to price the house right."

So let's back up. TicketsNow, the company's brokerage site, is suffering. To compensate, the face value price of the concert ticket will likely change, and notice it's not for the cheaper. To be fair, Rapino was speculating about possibilities and not stating any absolutes. But suddenly, the face value of a front row ticket at a concert jumped a whopping $300.

Proponents of such "dynamic pricing" strategies would argue that the front row is already being sold for $400 on sites such as StubHub, so it might as well be sold at that value from the start. That is, after all, what the market dictates, and dynamic pricing and "seat maps," which easily allow a user to see how much more Row B costs versus Row XX, will add more tiers to concert ticket pricing. Would you pay a little extra for an aisle seat? Someday (perhaps sooner rather than later) you might have that option.

Now, I don't expect massive corporations to buy into my concert-going ideals. I would, for instance, like to see Peter Gabriel before one of us retires, but his recent Hollywood Bowl show was priced out of my budget -- even the nose-bleed seats were pushing close to $100 when service fees were added in. I don't expect anyone at the concert biz to feel bad about that -- nor should they. After all, I should have paid closer attention in math class rather than studying journalism.

But take note -- the Justice Department only approved the merger between Ticketmaster and Live Nation in January. It took all of four months for the newly formed company to hint at higher-priced tickets. Four months.

And the beauty of it all? The company can conveniently trace the change in strategy to the public's complaints about its handling of Springsteen tickets on TicketsNow. Hey, you forced them to re-evaluate their business, and you can no doubt look forward to "no service fee Wednesdays" to score some cheap lawn tickets in Irvine.

"If we do that," Rapino said of dynamic pricing, "that would be the biggest way to grow our gross revenue versus any secondary strategy that was just capturing the fee side of the business." Generally, the company is thinking of ways to capture the difference between the face value of a ticket and the final price sold on broker sites.

So, who's ready to go in on a pair of $750 VIP Roger Waters tickets?

-- Todd Martens

http://latimesblogs.latimes.com/music_b ... icket.html

Little Italy

Legal monopoly endorsed by our own justice department. Nice

iamloco724

prices are out of hand already for most shows..i dont mind spending like say 75-80 a ticket but leave out those service charges..cause in reality we cant expect to buy tickets for most big bands these days at anything less then 60 each..but those fees add up quickly

and as far as 400 for front row..well if its not a GA show those seats barely every show up on ticketmaster anyway

dimitrispearljam

viewtopic.php?f=14&t=126886&hilit=why+now&start=105

JimmyV

First they turn your stomach, then they ask you to bend over.

ski4

god
what a bummer

maybe all bands that care will start playing small venue general admission shows :P

CJMST3K

If the base ticket price for whatever seat becomes $400, then scalper sites will sell them for more...

And raising the close seats but lowering the nosebleeds instead of uniform pricing will yield more money, which is their motive.

...however, they have a right to sell the "product" at whatever price they want. We have the right to pay or not to pay. But our government is helping to raise prices by eliminating promoter competition, and increasing the size of monopolies.

Stypo420

CJMST3K wrote:

If the base ticket price for whatever seat becomes $400, then scalper sites will sell them for more...

And raising the close seats but lowering the nosebleeds instead of uniform pricing will yield more money, which is their motive.

...however, they have a right to sell the "product" at whatever price they want. We have the right to pay or not to pay. But our government is helping to raise prices by eliminating promoter competition, and increasing the size of monopolies.

:shh: Don't tell.

Get_Right

At the end of the day we are all getting scalped-we have been for awhile.
The fact of the matter is that TM/LN is looking to capture the secondary market profits made by the scalpers/brokers/whatevers. No surprise that tickets now sales are down-they just camouflaged the tickets as VIP or platinum packages.
They will raise prices until people stop buying to determine exactly how much the market will bear. Its nauseating.

And it will deter scalpers-as the higher prices mean more cost and greater risk.
The Waters tour is just the beginning.

the wolf

thanks norm. here i was having a good morning, and you posted this and made me sick to my stomach.


man i fucking HATE these fuckers ! :evil: and our govt. just keeps right on helping them along.

Little Italy

CJMST3K wrote:

If the base ticket price for whatever seat becomes $400, then scalper sites will sell them for more...

And raising the close seats but lowering the nosebleeds instead of uniform pricing will yield more money, which is their motive.

...however, they have a right to sell the "product" at whatever price they want. We have the right to pay or not to pay. But our government is helping to raise prices by eliminating promoter competition, and increasing the size of monopolies.

Actually, I don't know if the scalper's would even have a spot in the marketplace; in addition to increasing revenue, the idea is for tm to eliminate the scalper all together and keep the difference for themselves. This is already evident with those flash tickets. Instead of issuing a hard ticket that could be resold for more than the face value, you scan your credit card and your ticket is issued at the gate. This is being done to eliminate the re-sale. But since some people are willing to pay scalper prices, these fuckers figure "why should that guy on the corner make that extra $100 or so? We can cut them out and charge what they would charge anyways".

Scalping is already being endorsed (stubhub) by venues and teams, and the fact that people continue to do business with these brokerage sites helps sustain these inflated prices in the marketplace. The only way to stop this shit is to not buy tickets and let games and shows take place with empty seats.

Gotta love America. A nation of consumers who are gouged while doing so. Its all about greed, which is really unfortunate.

Poncier

The $tones were $450 for seats several years ago, and not just the front row, and as the blogger mentioned Roger GilmourLite has $750 "VIP" seats on sale now and Bon Jovi of all bands is selling VIP packages currently for as much as $1,875.00 a person for the first 3 rows (lesser amounts like $625 a seat and $989 a seat for seats beyond row 3) but you get to take your chair home and it includes open bar.

Its not a new concept or practice. Its up to the artist as to whether or not to gouge their most loyal fans (at least the ones who can afford it) for the privelege of sitting close.

Some folks here need to think about that next time they complain about a $75.00 PJ ticket from 10club that has the possibility of landing them in the front row.

CJMST3K

I believe bands DO have control over this, but they would need to get less money from the promoter to do so.

Get_Right

CJMST3K wrote:

I believe bands DO have control over this, but they would need to get less money from the promoter to do so.

exactly
the band and its management sets the fee-paid by the promoter-the promoter then does what it can to make a profit off the show
and only some bands have the power to impose additional conditions such as limits on ticket prices