StubHub/TicketMaster

I don’t buy my tickets.

But neither do you.

I don’t pay convenience/facility fees, and if I’m lucky, I don’t even pay to park.

Actually, my problem is too many people want me to go to too many gigs.

But that’s not the way it is with the hoi polloi. The hoi polloi want tickets, and they’re willing to pay whatever it takes, if they want to go badly enough.

Yup, that’s today’s concert business. Heavy desire, or no desire. With very little territory in between.

So I was in Burbank, doing my podcast with Celine, and she very excitedly told me she’d gotten tickets to see Keith Urban and the Wreckers at Staples in the fifth row, FOR FACE VALUE!

But then she appended that this was the only time TicketMaster came through for her. That usually, she just goes to StubHub.

And then, like any American consumer, Celine went on to ticketmaster.com to revel in her good fortune, to see how bad the remaining tickets available for the gig were.

So she plugs "Keith Urban" into the search window.

And then clicks on "Keith Urban" on the page that comes up.

And then clicks on "Keith Urban" next to "STAPLES Center" on the next page.

Then dials in "2" seats and clicks "Look For Tickets".

And then she has to enter a code.

"WHAT’S THIS FOR?"

I try to explain to Celine that this is to combat the bots.

"The bots?"

The Net robots.

Then, after entering the code, she gets the Searching window, which seems to go on too long for something as simple as best available seats.

And the seats that come up…

Well, who knows where the fuck they are. I try not to go to Staples Center. It’s seemingly TWICE the size of the Forum. Who knows the section numbers?

But Celine clicks "seating chart", in small lettering under the available tickets. And a window pops up, and confirms that Celine has much better ducats than are presently available.

But then, moving the mouse, Celine rolls over "Convenience Charge", and says THIS really BUGS HER!

Okay, the convenience charge is $11.25. And it’s convenient for WHO?

I mean if you’re going to pick me up and take me to the show, that’s pretty convenient. Or, if I can print them myself…

But no, that’s an ADDITIONAL $2.50.

I feel like I’m being ripped off…

But then Celine fires up StubHub. Plugs "Keith Urban" into the search window. And almost INSTANTLY, a series of dates comes up.

And the dates are IN ORDER! And there’s only one place to click, on "Keith Urban Tickets". Whereas with TicketMaster you can click on the venue by mistake. Why would I want to click on the venue if I can click on "Keith Urban"? Why confuse me? And why is there ANOTHER clickable item "Find Tickets"? Which of the three should I click on, which is best, which takes me WHERE I WANT TO GO!

Now sometimes one has to wait for the ultimate results on StubHub. Like right now, replicating the process. But earlier, it was much faster. So, maybe TicketMaster’s "Searching" page isn’t that bad…

But the results! Right there on the StubHub results page are not only the tickets available, but a MAP OF THE VENUE!

Now rather than worry about the best seats available, rather than feel fucked in the ass like with TicketMaster, believing that I’ve got no chance against the fat cats and insiders, in the StubHub results window I can click on "Section", and some of the best seats in the house appear (meanwhile, when clicking to change the order of the results I get a searching message…mmm…why not one earlier? Then again, there’s no code entry necessary, to defeat the bots…)

Well, I can sit in Row 23 on the floor for $137. Now I’m excited about going! Suddenly I feel powerful!

So, I click through and buy the ticket. I’ve got to pay a FedEx fee, but shit, I’ve got to GET the tickets. As for StubHub’s 10%, god, they’re providing a service. If only the convenience fee for every TicketMaster transaction were labeled profit, and it was the same in each case.

In other words, STUBHUB IS A BETTER EXPERIENCE!

Oh, hands down.

TicketMaster is the enemy, StubHub is your FRIEND!

StubHub’s Website is easier to use. It looks better and is more user-friendly.

HOW DID TICKETMASTER FUCK THIS ONE UP?

Very easily. You see StubHub was created by youngsters with no constraints, trying to deliver what the public wanted. It’s got the tech imperative, we build it, you pay for it, we’re all happy. Whereas TicketMaster somehow seems SHADY!

Oh, but TicketMaster provides auctions!

But where are they on the homepage?

And when you try to buy tickets for Jimmy Buffett at MinuteMaid Park and find out you CAN’T, because it’s a PRE-SALE, and you don’t have the proper PASSWORD, how are you gonna FEEL?

Angry at TicketMaster, the SYSTEM! And probably mad at Jimmy Buffett too.

Boy has the music industry fucked THIS ONE up.

Fuck the fan clubs, the pre-sales, all you’re doing is sending buyers to the secondary market, where they can figure out what they want, easily, AND GET IT! The money is almost secondary to the SATISFACTION! How many gigs does the average person go to ANYWAY?

Yes, ticketmaster.com is only one step away from lining up outside the record store with a number, waiting to buy Springsteen tickets decades back. You’ve got to be early, you’re a victim of the vagaries of the system. Where with StubHub, you’ve got a FIGHTING CHANCE!

If the public determines ticket prices, then they won’t be considered to be TOO HIGH!

But then you’ve got to auction ALL the seats. So people don’t have to make an assignation with TicketMaster, to TRY and get good seats. God, you can TiVo a television program, but you’ve got to buy concert tickets at a SPECIFIC TIME?

But acts spew some bullshit about fans, about treating them right. Shit, it’s JUST these fans who’ll pay almost ANYTHING to get inside the building! They don’t want to pay a fan club fee and not know where they’re gonna sit, they want to pay what it takes for a GOOD SEAT!

TicketMaster and the managers and agents are up in arms over the secondary market. All that money going to third parties.

Well, they could COLLECT that money if only they threw out the rule book and gave the people what they wanted.

But that would be like getting the labels to monetize P2P. No, they’d rather leave all that money on the table. Since they can’t figure out a way to fix their own byzantine systems that were created years back in an era completely different from the one now.

By: bob | 2007/02/28 | Live Shows - Music Business - Online | Trackback | Comments [RSS 2.0]

8 Responses to StubHub/TicketMaster »»

Comments

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A promoter

Comment by A promoter | 2007/02/28 at 14:03:43

Bob, I’m going to ask that you please keep this one anonymous:

A few thoughts:

1. StubHub is not constrained like TM. They don’t have to answer the demands of the middle of the promoter, artist manager, or venue. They only have to concentrate on delivering a good service to the customer, and they do it well.

2. Have you ever used a primary ticketing service other than TM? TM’s fees seem a lot more reasonable after you experience their competition’s service. TM can move tickets and the can move them fast. No other primary system handles volume it takes to sell out a stadium date in less than an hour.

3. StubHub charges the Buyer 10% and the Seller 10%. A 20% service charge? Makes TM looks cheap.

4. In the not too distant future acts who want their fans to pay face value will not issue hard tickets. Their fans will have to swipe the credit card used to purchase the tickets at the door and enter the
venue. Scalpers will have a much harder time when they can’t physically move the inventory. Acts that want to push the gross revenues will continue to grow auctions. Auctions and market demand pricing is still in its infancy. The promoters and managers who survive will learn how to keep those dollars in the primary market. The right technology and acts keeping the money in the primary market will greatly reduce the growth of the secondary market. StubHub saw it, that’s why they sold to eBay.

5. TM.com’s current anti-scalper measures are a joke. Shopping bots own that site. You can’t even type in B-0-B L-E-F before the shopping bots have purchased the first 20 rows in the venue.

6. The concert industry empower scalpers. A person I know who works for a secondary market retailer told me that they would have 70% less inventory if there weren’t presales. Fan Club presales, radio presale, etc. all feed scalpers. Some scalpers do it for the profit, and some are kids who buy four tickets and sell two of them to pay for the two they are using to go to the show. Then they don’t have to give a shit about convenience fees.

comment_type != "trackback" && $comment->comment_type != "pingback" && !ereg("", $comment->comment_content) && !ereg("", $comment->comment_content)) { ?>

Will Page

Comment by Will Page | 2007/02/28 at 14:04:09

Bob,

You’re right, at first glance; music creators everywhere might envy the economics of ticket touting. Here is a secondary market that achieves huge revenues for the black economy at the expense of the primary market.

To show how this works, let’s take a look at a 2005 study by economists Connolly and Krueger who analyzed the pricing levels of tickets sold on the primary and secondary markets during Bruce Springsteen’s Rising tour in 2002. The list price for Springsteen tickets on that tour was $75, which most fans paid.

But in the secondary market, i.e. the amount the touts charged to those who bought later (accounting for about 20-25% of tickets sold), the ticket price averaged $280. Actual revenues collected by Springsteen and his entourage on the 19,738 legitimate ticket sales were $1.5million. At the secondary market rate, Springsteen and his band could have netted an extra $4million (= [$280- $75] x 19,738).

That aside, the actual revenues collected by the secondary market were between $1.1 and $1.4million according to the study estimates, leaving Springsteen light by at least that amount. So, why didn’t Springsteen charge more for his music and what can we learn from ticket touts about pricing music?

Various theories have been proposed for why a company might price its services below a level that the market might otherwise bear. None are entirely satisfactory in the long run, but if one accepts that concert-going is a social event, made more enjoyable by the presence of a bigger audience, then the fairness of the pricing is likely to become the more important consideration, rather than the economics of the transaction (Kahneman, et al. 1986).

Courty (2003) suggests there are two types of consumers for live entertainment events: the early adopters (or die-hard fans) who will secure a ticket in advance come-what-may (and for this group, fairness will be an important purchasing consideration). For the rest, they’ll wait to see if their diaries will enable them to attend the event. As time elapses, the uncertainty is resolved for the latter group and these late-demanders are prepared to pay a higher ticket price for the convenience (i.e. they are effectively paying the price of flexibility – and are happy to once demand has outstripped supply).

One difficulty in using the ticket tout analogy to help us find a new model for the music industry is that in the ticket tout model we are also dealing with the economics of scarcity. There are a finite number of tickets available and if demand outstrips supply, the market will bear whatever price anyone is willing to pay. Nevertheless, putting scarcity to the side, there is a lot we can learn about the power of the economics of convenience.

That word, ‘convenience’, brings us full circle to the Lefsetz view of the world – what are the costs (in terms of revenues forgone) of not having a convenient model for monetizing the consumption of recorded music when set against the dwindling benefits – in terms of the real terms decline in our top line – of our current system. The ‘net effect’, I think, justifies your rants and raves with added interest.

Will Page, Economist
Edinburgh, Scotland

References

Connolly, Marie and Alan Krueger (2005), "Rockonomics: The economics of popular music", in: Victor Ginsburgh and David Throsby, eds., (2005), "Handbook on the Economics of Arts and Culture", Elsevier.

Courty, Pascal (2003), "Some Economics of Ticket Resale", Journal of Economic Perspectives 17(2): 85-97.

Kahneman, Daniel, Jack Knetsch and Richard Thaler (1986), "Fairness as a Constraint on Profit Seeking: Entitlements in the Market", American Economic Review 76(4): 728-41.

comment_type != "trackback" && $comment->comment_type != "pingback" && !ereg("", $comment->comment_content) && !ereg("", $comment->comment_content)) { ?>

Matt Wardlaw

Comment by Matt Wardlaw | 2007/02/28 at 14:04:31

StubHub got me a pair of tickets for one of the last Buddy Guy shows at Legends in January that had been sold out for weeks – paid less for the tickets compared to anyone that was selling them on Craigslist, Ebay, etc.

And you’re right, I was floored at how user-friendly the experience was – I’m not paranoid about buying stuff online, but their guarantee to buyers that you will get legit tickets in the mail in time for the show or your money back certainly is an extra added bit of security. I was surprised by the 10% StubHub commission, but it didn’t matter because the experience had been great, and I had gotten tickets to a show that were otherwise unattainable at the price.

I have a buddy that has sworn by StubHub for a while now, and I am certainly recommending it to everybody and anybody who is looking for concert tix!

End experience for me certainly matches your overall point – I got what I wanted, and didn’t have to wade through a bunch of bullshit to get there.

comment_type != "trackback" && $comment->comment_type != "pingback" && !ereg("", $comment->comment_content) && !ereg("", $comment->comment_content)) { ?>

Jim Filiault

Comment by Jim Filiault | 2007/02/28 at 14:04:53

Bob:

Here is another example of the crap people have to deal with.

My good friend Terri is a huge Arcade Fire fan. The band is coming to town (Portland), so she goes to the band’s website and gets the "pre-sale code."

The day before tickets officially go on sale, she goes to Ticketmaster’s website, enters her pre-sale code in the space provided by Ticketmaster, gives them her credit card number, buys two tickets. Ticketmaster gives her a confirmation number and everything.

The next day tickets go on sale to the general public and the show sells out.

The day after that, Ticketmaster calls her at home to tell her that the pre-sale has been "cancelled," her confirmation number is no good, and tickets will not be mailed to her.

Now she can’t go to the show. Good job Ticketmaster!

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Greg Van Bastelaar

Comment by Greg Van Bastelaar | 2007/02/28 at 14:05:10

Although I’m sure that by slagging Ticketmaster you’ll get a bevy of e-mails like this one…here’s a couple of my online TM nightmares:

I used the TM website to order Radiohead tickets for their last show through Toronto. After plugging in that STUPID security, anti-bot code (that contains words that either don’t exist in the English language or are words that I’ve never heard in my lifetime — which consequently slow down such an urgent process as ordering popular tickets) two dozen times I finnnnallly got tickets. I proceeded to the section whereby you select how you want to receive those tickets. I then got BOOTED OUT of the entire process; my ass kicked back to the main TM home page. I was irate. I phoned and phoned TM to no avail. I basically got told to effectively go fuck myself.

How about ordering "best available" tickets for the last Nine Inch Nails show that went through town? The moment I discovered that the nosebleed tix in my possession miiigggght not be the "best available" was when my friend bought *better* tickets a couple of days before the show. Best available? How about: "Most random."

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Marc Geiger

Comment by Marc Geiger | 2007/02/28 at 14:05:27

Horrible and perfect analogy.

Mispricing tickets and allowing the aftermarket to be so good and efficient IS exactly the same analogy as labels and peer to peers.

Why is it so hard to give things to consumers the way they want it?
Beats me.

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Hidden Track » Friday’s Leftovers

Pingback by Hidden Track » Friday’s Leftovers | 2007/03/02 at 06:41:30

[…] y Blue Sky (if the tracks are down check out Idolator or Shamelesscomplacency) Bob Lefsetz rants against ticket auction sites Ryan Adams wi […]

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Ticket brokers 2.0 – Sports Marketing 2.0 | Pat Coyle

Pingback by Ticket brokers 2.0 – Sports Marketing 2.0 | Pat Coyle | 2007/05/01 at 02:49:04

[…] rs share frustration with the whole business: eBay opinions TicketMaster, from the 2 Frogs StubHub fan (rated R for language)
1793
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A promoter

Comment by A promoter | 2007/02/28 at 14:03:43

Bob, I’m going to ask that you please keep this one anonymous:

A few thoughts:

1. StubHub is not constrained like TM. They don’t have to answer the demands of the middle of the promoter, artist manager, or venue. They only have to concentrate on delivering a good service to the customer, and they do it well.

2. Have you ever used a primary ticketing service other than TM? TM’s fees seem a lot more reasonable after you experience their competition’s service. TM can move tickets and the can move them fast. No other primary system handles volume it takes to sell out a stadium date in less than an hour.

3. StubHub charges the Buyer 10% and the Seller 10%. A 20% service charge? Makes TM looks cheap.

4. In the not too distant future acts who want their fans to pay face value will not issue hard tickets. Their fans will have to swipe the credit card used to purchase the tickets at the door and enter the
venue. Scalpers will have a much harder time when they can’t physically move the inventory. Acts that want to push the gross revenues will continue to grow auctions. Auctions and market demand pricing is still in its infancy. The promoters and managers who survive will learn how to keep those dollars in the primary market. The right technology and acts keeping the money in the primary market will greatly reduce the growth of the secondary market. StubHub saw it, that’s why they sold to eBay.

5. TM.com’s current anti-scalper measures are a joke. Shopping bots own that site. You can’t even type in B-0-B L-E-F before the shopping bots have purchased the first 20 rows in the venue.

6. The concert industry empower scalpers. A person I know who works for a secondary market retailer told me that they would have 70% less inventory if there weren’t presales. Fan Club presales, radio presale, etc. all feed scalpers. Some scalpers do it for the profit, and some are kids who buy four tickets and sell two of them to pay for the two they are using to go to the show. Then they don’t have to give a shit about convenience fees.

", $comment->comment_content) || ereg("", $comment->comment_content)) { ?>

Trackbacks & Pingbacks »»

Will Page

Comment by Will Page | 2007/02/28 at 14:04:09

Bob,

You’re right, at first glance; music creators everywhere might envy the economics of ticket touting. Here is a secondary market that achieves huge revenues for the black economy at the expense of the primary market.

To show how this works, let’s take a look at a 2005 study by economists Connolly and Krueger who analyzed the pricing levels of tickets sold on the primary and secondary markets during Bruce Springsteen’s Rising tour in 2002. The list price for Springsteen tickets on that tour was $75, which most fans paid.

But in the secondary market, i.e. the amount the touts charged to those who bought later (accounting for about 20-25% of tickets sold), the ticket price averaged $280. Actual revenues collected by Springsteen and his entourage on the 19,738 legitimate ticket sales were $1.5million. At the secondary market rate, Springsteen and his band could have netted an extra $4million (= [$280- $75] x 19,738).

That aside, the actual revenues collected by the secondary market were between $1.1 and $1.4million according to the study estimates, leaving Springsteen light by at least that amount. So, why didn’t Springsteen charge more for his music and what can we learn from ticket touts about pricing music?

Various theories have been proposed for why a company might price its services below a level that the market might otherwise bear. None are entirely satisfactory in the long run, but if one accepts that concert-going is a social event, made more enjoyable by the presence of a bigger audience, then the fairness of the pricing is likely to become the more important consideration, rather than the economics of the transaction (Kahneman, et al. 1986).

Courty (2003) suggests there are two types of consumers for live entertainment events: the early adopters (or die-hard fans) who will secure a ticket in advance come-what-may (and for this group, fairness will be an important purchasing consideration). For the rest, they’ll wait to see if their diaries will enable them to attend the event. As time elapses, the uncertainty is resolved for the latter group and these late-demanders are prepared to pay a higher ticket price for the convenience (i.e. they are effectively paying the price of flexibility – and are happy to once demand has outstripped supply).

One difficulty in using the ticket tout analogy to help us find a new model for the music industry is that in the ticket tout model we are also dealing with the economics of scarcity. There are a finite number of tickets available and if demand outstrips supply, the market will bear whatever price anyone is willing to pay. Nevertheless, putting scarcity to the side, there is a lot we can learn about the power of the economics of convenience.

That word, ‘convenience’, brings us full circle to the Lefsetz view of the world – what are the costs (in terms of revenues forgone) of not having a convenient model for monetizing the consumption of recorded music when set against the dwindling benefits – in terms of the real terms decline in our top line – of our current system. The ‘net effect’, I think, justifies your rants and raves with added interest.

Will Page, Economist
Edinburgh, Scotland

References

Connolly, Marie and Alan Krueger (2005), "Rockonomics: The economics of popular music", in: Victor Ginsburgh and David Throsby, eds., (2005), "Handbook on the Economics of Arts and Culture", Elsevier.

Courty, Pascal (2003), "Some Economics of Ticket Resale", Journal of Economic Perspectives 17(2): 85-97.

Kahneman, Daniel, Jack Knetsch and Richard Thaler (1986), "Fairness as a Constraint on Profit Seeking: Entitlements in the Market", American Economic Review 76(4): 728-41.

", $comment->comment_content) || ereg("", $comment->comment_content)) { ?>

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Matt Wardlaw

Comment by Matt Wardlaw | 2007/02/28 at 14:04:31

StubHub got me a pair of tickets for one of the last Buddy Guy shows at Legends in January that had been sold out for weeks – paid less for the tickets compared to anyone that was selling them on Craigslist, Ebay, etc.

And you’re right, I was floored at how user-friendly the experience was – I’m not paranoid about buying stuff online, but their guarantee to buyers that you will get legit tickets in the mail in time for the show or your money back certainly is an extra added bit of security. I was surprised by the 10% StubHub commission, but it didn’t matter because the experience had been great, and I had gotten tickets to a show that were otherwise unattainable at the price.

I have a buddy that has sworn by StubHub for a while now, and I am certainly recommending it to everybody and anybody who is looking for concert tix!

End experience for me certainly matches your overall point – I got what I wanted, and didn’t have to wade through a bunch of bullshit to get there.

", $comment->comment_content) || ereg("", $comment->comment_content)) { ?>

Trackbacks & Pingbacks »»

Jim Filiault

Comment by Jim Filiault | 2007/02/28 at 14:04:53

Bob:

Here is another example of the crap people have to deal with.

My good friend Terri is a huge Arcade Fire fan. The band is coming to town (Portland), so she goes to the band’s website and gets the "pre-sale code."

The day before tickets officially go on sale, she goes to Ticketmaster’s website, enters her pre-sale code in the space provided by Ticketmaster, gives them her credit card number, buys two tickets. Ticketmaster gives her a confirmation number and everything.

The next day tickets go on sale to the general public and the show sells out.

The day after that, Ticketmaster calls her at home to tell her that the pre-sale has been "cancelled," her confirmation number is no good, and tickets will not be mailed to her.

Now she can’t go to the show. Good job Ticketmaster!

", $comment->comment_content) || ereg("", $comment->comment_content)) { ?>

Trackbacks & Pingbacks »»

Greg Van Bastelaar

Comment by Greg Van Bastelaar | 2007/02/28 at 14:05:10

Although I’m sure that by slagging Ticketmaster you’ll get a bevy of e-mails like this one…here’s a couple of my online TM nightmares:

I used the TM website to order Radiohead tickets for their last show through Toronto. After plugging in that STUPID security, anti-bot code (that contains words that either don’t exist in the English language or are words that I’ve never heard in my lifetime — which consequently slow down such an urgent process as ordering popular tickets) two dozen times I finnnnallly got tickets. I proceeded to the section whereby you select how you want to receive those tickets. I then got BOOTED OUT of the entire process; my ass kicked back to the main TM home page. I was irate. I phoned and phoned TM to no avail. I basically got told to effectively go fuck myself.

How about ordering "best available" tickets for the last Nine Inch Nails show that went through town? The moment I discovered that the nosebleed tix in my possession miiigggght not be the "best available" was when my friend bought *better* tickets a couple of days before the show. Best available? How about: "Most random."

", $comment->comment_content) || ereg("", $comment->comment_content)) { ?>

Trackbacks & Pingbacks »»

Marc Geiger

Comment by Marc Geiger | 2007/02/28 at 14:05:27

Horrible and perfect analogy.

Mispricing tickets and allowing the aftermarket to be so good and efficient IS exactly the same analogy as labels and peer to peers.

Why is it so hard to give things to consumers the way they want it?
Beats me.

", $comment->comment_content) || ereg("", $comment->comment_content)) { ?>

Trackbacks & Pingbacks »»

Hidden Track » Friday’s Leftovers

Pingback by Hidden Track » Friday’s Leftovers | 2007/03/02 at 06:41:30

[…] y Blue Sky (if the tracks are down check out Idolator or Shamelesscomplacency) Bob Lefsetz rants against ticket auction sites Ryan Adams wi […]

", $comment->comment_content) || ereg("", $comment->comment_content)) { ?>

Trackbacks & Pingbacks »»

Ticket brokers 2.0 – Sports Marketing 2.0 | Pat Coyle

Pingback by Ticket brokers 2.0 – Sports Marketing 2.0 | Pat Coyle | 2007/05/01 at 02:49:04

[…] rs share frustration with the whole business: eBay opinions TicketMaster, from the 2 Frogs StubHub fan (rated R for language)
1793
Related […]