Of the Modern Lovers. Of the Talking Heads. We cover it all!

https://podcasts.apple.com/us/podcast/jerry-harrison/id1316200737?i=1000596717368

https://music.amazon.com/podcasts/9ff4fb19-54d4-41ae-ae7a-8a6f8d3dafa8/episodes/20202d29-8fa4-4729-ab68-2be128af3666/the-bob-lefsetz-podcast-jerry-harrison

https://www.stitcher.com/show/the-bob-lefsetz-podcast/episode/jerry-harrison-211221950

This is so spot on. Most ppl know nothing abt ticketing but they tried to get tickets one time for Taylor and now they are all experts….For all those that rail against TM what is the better alternative? The answer is one doesn’t exist. While I think verified fan is generally a waste they have implemented some very good programs over the last several years for both customers and artists (seat map, platinum tickets, aisle seats etc). Consumers generally want more choices so if you are willing to pay more to sit in aisle seat or sit up close you now have those choices….seat geek for instance is a good secondary site but for a high traffic concert onsale It’s not the platform I would want to use from artist POV. Aside from most ticketing companies not having the ability to handle high volume onsales you will never have a significant amount of players in primary ticketing business bc most can’t afford the advances the venues require for exclusivity anyway. I also don’t see why when companies like LN and AEG build or buy venues they shouldn’t be able to implement their own ticketing system In those venues. Just my perspective as everyone piles on TM.

Best,
Jarred Arfa

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This is word for word (almost) what I have been telling my friends who are not in the biz for weeks. No one gets it.

Alan Stewart

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Former SVP Marketing for Ticketmaster when Jared was President.  A few bullets:

1. For every Taylor Swift tour there are hundreds if not thousands of events with “distressed inventory” meaning sales are soft with plenty of seats available.  It’s the entitlement for the hot shows that gets fans nuts.  2M people trying to get 200K tickets.  That’s a lot of disappointed people.  You don’t see Nike under the microscope for limited edition Jordans and StockX and GOAT are billion dollar resale businesses where Nike gets nil.  Supply and demand.  Basic economics.

2. Every market research study I ever sat in said the same thing… why didn’t you get tickets for the show you would have gone to see by the artist or team or whatever you love?  I DIDN’T KNOW ABOUT IT.  As you note, discovery is key and Ticketmaster’s marketing is a differentiator.  Taylor awareness is high.  Most everything else not so much.  There are hundreds of events going on tonight in whatever city you live in.  Huge artists are touring without this hulabaloo right now and you can still get tickets.

3. Does Ticketmaster have issues?  Most definitely.  But the coat of armor they wear to protect the industry has long been explained by you and others yet falls on deaf ears.  I often suggested the one “most transparent” thing we could do was show how many seats in the venue were actually available for purchase at the on-sale.  You can imagine how (not) excited others were to do that.

Stagger the on-sales for big events, one venue at a time.  I seem to remember Garth doing this.  But then you don’t get the PR about how you broke the internet.

Mitch Rotter

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I too was listening to the news today.  It was ridicules. I had a similar argument that you make with my old partner, who was managing Pearl Jam at the time.  The fight was not with TM, it was with the band, agent, and promoter.  TM is just getting paid to take the fall.  Every manager wants 55-70 percent of the gross to the artist.  The higher the income, the higher the commission.  That has never been an equation that has never worked for any promoter, so Amphitheaters were born.  The business for the promoter became to be an “All about the popcorn” model.  Every agent, manager, and artist believes, that because the promoter has their fingers in so many pies, they deserve all of the ticket revenue.  At one point there was an artist asking for 105% of the door.  So when I model financials for any concert, festival, tour, I look at all factors for the client or artist.  It could be argued that with major promoters that there is somewhere in the range of $22+/ticket off settlement.

They also did not talk about the ticket company cost of acquisition.  The up front fees from ticketing companies to venues/promoters can range from hundreds of thousands to millions.  For the last decade I have guest lectured at several universities, mainly in festival and venue management.  When I talk about what is the most important factor in shows today my first 4 slides say, Beer, Beer, Beer & more Beer!  As a promoter it is inconceivable to promote without having a piece of all the ancillary profit centers, just ask any of the few public run buildings left for a settlement.  They share everything. Food & Beverage, Ticket Fees, Merch, Parking, VIP, Suites are all open for discussion, depending on what artist you can bring them.

I wish these lawmakers would spend more time on deciphering defense spending, rather than showboating for parents of children crying because of a botched on sale.  I agree, the need to brag about how big you are is sad.  I have not heard of any problems with Garth/Stones/Maca on sales. And yes, it is expensive to buy a ticket.  It’s expensive to tour.  Where is the outrage for Basketball or Football tickets?  Nowhere. Because there is a market out there for it.

I agree with all you have said.  Thanks.

All the best,

Ken Deans

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Five points on ticketing:

1) There are tons of tech companies that are developing the “most innovative” new ticketing platforms. When I speak with their founders, the first question I ask is, “Who on your team has actual music business experience?” The answer is almost always, “No one.” While from the outside, concert ticketing looks ridiculously simple, what these techies fail to realize is that 90% of major venues in the US are under contract with Live Nation or AEG for years, sealed with (often hefty) up-front advances. If your startup is patting itself on the back for that $3 million Seed round raise, good luck on competing with the hundreds of millions these giant corporations are dishing out to secure these exclusive contracts.

2) You are 100% right that the artist (and their representatives) is where the buck stops with every deal. They approve the contracts – each of which delineates where every penny of income comes from and goes to for each show. They can accept or counter offers, and can negotiate individual terms, if they so choose. I’ve personally negotiated ticketing and service fees with Fred Rosen, when he ran Ticketmaster, so I know it can be done. I’ve also worked with artists that wanted to squeeze every possible bit of profit from a tour/show – which I don’t think is any different from how many deal with their taxes and the IRS (to keep as much as is legally possible).

3) Concert promoting is typically a risky business with tight margins. Promoters routinely take on millions of dollars in risk – no one ever knows for sure how a show will sell before it goes on sale. There are a number of factors that can shut-down a show or tour in a matter of minutes (pandemic, artist illness or injury, criminal arrest, civil unrest, etc., etc.). Promoters deserve to make a profit, and the fact that they’re forced to look to ticket and service fees for it, should be addressed in a more transparent manner. Artists need to acknowledge this, even though they are often across the negotiating table from them when these deals are structured.

4) Fans are just human. No one wants to overpay, and many seem to think that ticket inventory is unlimited. When artists and their reps are planning a tour, the astute are shooting for filling as many seats as possible, at the highest price, without leaving any empty. It’s an impossible task, that sometimes results in fans getting the short end of the stick. I’m not sure why we don’t see the same backlash with professional sporting events, as those prices are through the roof, with many of the same fees on each ticket, but nowhere near the same level of pushback from the public as we see with music.

5) There has always been a low-cost, low-tech means to end scalping – simply require a person show an ID and have a wristband secured on their wrist right there. This has worked at Will Call for decades, and with the proliferation of mobile devices and QR codes, attendees could be checked in and wrist-banded during the time it takes for them to wait in the metal detector line. Scalping is allowed/tolerated because the profits are huge and with cash, it’s impossible to follow the money. I’ve personally experienced major promoters selling tickets to “sold-out” shows (GA and lawn seating make this possible) – remember, even 100 tickets at $100 each is a $10,000 cash profit for a few minutes work in the parking lot.

In the end, market demand is what drives ticket prices. Artists that offer tickets at a face value lower than what the market will pay create the opportunity for scalpers to actually make more than they do for a show – I know that sounds incredible, but it’s not – imagine a band with 4 members that gets a $250K guarantee and sells out a 10K seat venue. If they can keep costs to 60% (which can be difficult) they’ll take $100K out to split. Each member (assuming they split evenly) will net $25,000 before taxes, and (assuming a 37% tax bracket – we’ll leave out the state) $15,750 after taxes. If a scalper can make $200 per ticket, they’d net more than the drummer if they sold just 79 tickets – without writing, practicing or playing a single note – or paying any tax.

The problem is not Ticketmaster – or any other ticketing platform. It’s the public’s recognition that the concert business is driven by market forces and is more “corporate” and “professional” than they can imagine, and that access to performances will come at a price, with profits for all involved – just as it is when you buy an iPhone.

Music has always been the least expensive/most accessible form of entertainment. Digital streaming has provided access to millions of songs for free, furthering the idea that music is floating out there for anyone to have.

Seeing your favorite artist in person has always carried a very unique value proposition – it’s time to recognize what that experience is really worth.

-Steve Stewart

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You are spot on.   Think of it like this. Ticketmaster just apologized to Taylor Swift for making her more than $300M for putting her concerts on sale in a way that any rational person/company would not have done and the world blames the company for a fiasco of a ticket sale in a manner her representatives insisted take place.

In no other industry could this happen. Insane

Fred Rosen

This makes me crazy. I was just on a radio show about ticketing. Of course they gave most of the time to the college professor economist, who understood the facts but missed the point.

How come every business is seen as professional except for ticketing? People don’t understand medicine, nor do they understand Wall Street finance, those are seen as professional businesses, but ticketing? Oh, those are inexperienced idiots, we could do it better.

We can delineate the splits of the fees, which most people still don’t understand, but they don’t get to the heart of the business, the history, and the fact that THE ACTS TAKE ALL THE MONEY!

But in order to make the business work, there must be promoters to pay them. So how do those promoters get paid?

You see the acts commission the monies. Never mind that they get steep advances. The fees are outside the commission base. That’s where promoter profit is. Get rid of the fees, and you’ve got no concert business.

As for including the fees in the overall price… Stubhub did this and sales went down. Because fans are cheap and delusional. They buy Spirit Airlines tickets and then are surprised when they have to pay for overhead baggage space. Try to protect these people and they complain, they think they’re being ripped-off.

But there are no miracles. A new Mercedes-Benz doesn’t cost $10,000, why should every concert ticket be $50? Why is someone, why is EVERYONE, entitled to such a deal? THEY’RE NOT! So you’ve got uninformed people who are convinced they are right bloviating loudly. Just like politics!

I’ll make it simple, don’t go! No one is forcing you to.

So the act only has one career, they don’t want to look bad. But they’re pissed because scalpers are getting all the uplift. So either they charge more or they give up all that profit. But charging what the tickets are worth? A no-no! People spend $100 bucks for dinner, but for a concert, too much! And they’ve got to tip, otherwise the waiters wouldn’t make a living, but even worse, they wouldn’t show up to work!

And how come Taylor Swift is skating here? How come there’s no press that no one had attempted a sale of this scale previously? First time always takes risks. And the reason no one took on a sale of this magnitude is because they were worried about exactly what happened, the system being overwhelmed. As for Ticketmaster saying they could do this… Try saying no to a superstar act, good luck.

And why did all the tickets have to be sold at the same time? So Swift could spew it all over the press, the number of tickets sold, the cash generated, that’s the only reason. And is that worth the risk? OF COURSE NOT!

And everybody in the business knows Verified Fan is flimsy. Sure, it weeds out some bad actors, but tons are left. But the public thinks it’s gonna get a good ticket and at a good price which is just b.s.

So everybody has dirty hands. But, once again, the focus is only on Ticketmaster. Because the acts can’t be guilty, even if you tell the fans they don’t believe it. And the government is looking after duplicitous fans? Come on.

The fans are never happy. And a very small minority is making most of the noise, the delusional ones.

So let’s go back to the on-sale. The goal is to create mania to make the dates go clean, i.e. sell out. Yes, you hear tickets are going for a grand and you think you’d better buy yours now. And sometimes this mania works, and sometimes it does not. There’s hoopla for a day or two, and then…tickets go unsold and they never sell. Maybe they were priced too high to begin with. But everybody thinks good tickets are gone and they don’t even go back to the ticketing site. And the tickets are not sold and the promoter, who works on less than a 5% margin, may end up losing money. Apple works on 30% margins, but concert promoters, who guarantee the acts the money, huge sums, far, far in excess of record company advances, are the bad actors here? Just like the bozos believe Spotify is the devil. No, the label is taking most of the money. But it’s preferable to hate on Spotify, because Daniel Ek is young and rich and the musicians are not. Musicians whose music isn’t listened to much to begin with.

As for starting musicians…

They’ve got someone wet behind the ears testifying in Congress. Because he wrote an opinion piece in the “New York Times.” Yes, all you people who think the “Times” doesn’t count, the joke is on you. This guy went from nowhere to D.C. almost immediately.

But where is the club owner testifying? Who takes all the risk, just in opening the doors. Yes, there’s a ladder. At the bottom, the deals are worse, when you become a household name, the deals are better. They call this leverage. And club business is so good…that most of them went out of business. Been to the Bottom Line recently? Those clubs existed because the labels supported them, bought tickets and drinks, which they no longer do. As for what the industry calls “clubs’ today…many are what were previously labeled “theatres,” they hold thousands of people. But this guy testifying in Congress can’t sell that number of tickets. Where are the people who can? Who are getting good deals? Why should leverage work everywhere but the concert business?

And how about the people who love scalpers? Because they can buy good tickets at the last minute. And it’s not only the rich, the superfans do this too.

And the fans want to scalp the tickets they purchased so they can go free, or at a profit. You can make tickets cheap and get rid of resales by going paperless, but the fans HATE THIS, because they can’t scalp.

But even worse, the fans don’t understand that scalping is a professional business. You can’t compete against the pros the same way you can’t play in the NBA.

And the dirty little secret is…

Everybody can get a ticket. Taylor Swift is playing stadiums! Just show up before the show, there will be tons of tickets available, people who got caught up in the mania and bought four when they only needed two, not realizing no one is going to overpay to sit in the upper deck.

Any arena show it’s the same thing. You can almost always get a ticket.

But no, Ticketmaster is the enemy.

Furthermore, the consent degree extension has nothing to do with all this, it’s got to do with Ticketmaster strong-arming venues to sign up with Ticketmaster in order to get shows.

Wow, never have so many known so little.

Meanwhile, Taylor Swift and the acts end up smelling like a rose, when they’re the ones generating all the problems.

You want to improve the situation? Have multiple sellers of tickets like in Europe. But then what happens to the payments to the venues, all that money from Ticketmaster that goes straight to their bottom line as payment to be exclusive? The government is just going to take that away?

But I’ll go even further. If you’re not on the Ticketmaster site, good luck people knowing about your show. That real estate is the most valuable in concertdom. Getting the word out is impossible. You can’t reach everybody. Ticketmaster is actually providing a service here. Never mind their e-mail list. You want to use Ticketmaster!

Oh, there could be change in the sphere, but someone would have to suffer.

Acts could charge what the tickets are worth, but fans would pay more.

Acts could keep tickets cheap, but fans wouldn’t be able to resell them.

The fees could be rolled into the deal… But then the promoter would get screwed or the act would have to take less.

This system didn’t happen by accident, there was evolution. And it’s not only about Ticketmaster. In fact, most of the innovation came from Ticketmaster. Picking your own seat…you couldn’t do that with Ticketron.

So Amy Klobuchar grandstands and the fans rail against Ticketmaster and what happens?

NOTHING!

Unless Lina Khan gets involved and then…

Someone’s going to suffer.

“Zach Bryan/The Burn, Burn, Burn Tour Announcement”: https://bit.ly/3Ho8HjB

And we thought it was all about the fees…

But it turns out it’s about process and transparency.

The public can’t figure out ticketing, and neither can the government. And that’s exactly the way the music business wants it.

There are pre-sales, holdbacks, platinum… And on the general on-sale there can be fewer than a thousand tickets available in an arena. And you wonder why the public is frustrated?

There are going to be fees on the Zach Bryan tickets. Ten to twenty dollars. And honestly, that’s not cheap, that’s not bupkes. But you know what they are, you’re not going to be surprised with a crazy number when you go to check out on the ticketing site.

Zach can’t get rid of the fees, because that’s promoter profit, and the buildings get a piece, and of course the ticketing company gets a piece… Because the acts take all the rest. The fees were created to establish a pile of money that the acts couldn’t commission.

And the ticketing company, which does not get all of the fees, as per the above, is paid to take the heat, so the act looks good. Without the fees, the whole business does not work. Or would have to be restructured, and good luck negotiating with agents to do this.

So that’s the fees.

But what are the odds of getting tickets?

Come on, you’ve got to know somebody. Otherwise you’re sitting in the rafters if you’re in the building at all.

Except for platinum, what USED to be called platinum anyway. Platinum was right up front on the floor or in the adjacent loge. And you paid extra to be close. But now platinum also includes good seats elsewhere in the building. That cost more. Muddying the water, so people have no idea what is going on. And these platinum tickets are flex-priced, as in they might be listed at $150 but then either a computer or a person sees demand is hot and makes them $250. It’s like a land rush in the old west. Gentlemen, start your engines, be ready in front of your computer at 10 AM and good luck! Hell, Wall Street traders pay millions to establish the most direct wires so they can trade a millisecond earlier, and it works. Good luck competing with the scalpers who buy tickets every day. Whatever you do with your fingers a programmed machine can do faster.

So everybody crowds in at once and the system jams up which is why with Zach Bryan tickets…

You register in advance, you get more than a week to do this.

And, here’s the new wrinkle, you’ve got to provide a credit card attached to your name and AXS charges it a dollar to see if you’re real.

Oh, of course you get the dollar back. It’s taken off the ultimate ticket price, or if you don’t get tickets at all, it’s refunded.

So, you just can’t use an e-mail address, clogging up the works. You’ve got to prove that you’re real with said credit card. And then the list is combed again for obvious shenanigans. Such that AXS ends up with legitimate customers who are ready to buy tickets. Are some of them scalpers? Yes, nothing is perfect, but they’ve been hindered here.

And then the potential ticket buyers are randomized, and then a number are picked and sent e-mails saying they can buy at a certain time.

You get a window, you know it in advance. And then either you show up and buy the tickets or not. Promoters who have used this process in the past usually establish two hour tranches. The first group can start buying at ten. The next starting at noon, etc., until all tickets are sold.

Not everybody who registers for a ticket ultimately decides to buy one, for whatever reason. So even though you may have a later window, you still might get a ticket.

And then… You can’t resell the ticket for a profit.

You can list it for resale on the AXS site for the same price, but you can’t get a lift.

For those not in the business, I must tell you there’s a rolling bar code. So what the number is today not only isn’t the number tomorrow, but may not be the same in an hour or less.

So the ticket is tied to the purchaser’s name. Let’s say one person bought four tickets. Bottom line, all four people have to show up and go into the building together. Inconvenient? Yes. But what we’re talking about here is a plethora of demand and little supply. You always have to go through hurdles in this situation. Whether it be waiting in front of your computer or lining up physically, it’s never easy.

And, a scalper who bought four tickets… Can show up with three people who he has charged a thousand bucks apiece and walk them in and then walk out himself, burning one ticket but making a big profit.

So what Zach is achieving here is allowing genuine fans a better chance of getting a ticket at a fair price. Does this mean they will get a ticket? ABSOLUTELY NOT!

The public is the weak link in ticketing, even more than the scalpers. The public wants to scalp its own tickets. The public believes it should be able to sit in the front row for a cheap price. A fan believes they’re entitled to get into the building, that’s their right! And Zach’s ticketing procedure means a fan may ultimately be SOL, outside the building on the night of the concert. Which they don’t like. You see the public wants fairness but also doesn’t want fairness. Everybody wants an edge, many believe they’re entitled to an edge, and Zach’s process clamps down on this.

Also, computer failure is obviated. Because not every ticket is available at the same time and people who are not really planning to buy tickets can’t play.

Come on, technology has limits. Facebook, Spotify, Verizon even, they all go down once in a while. Not only are there errors… Hell, try using the Apple site right after they announce a new product. Talk about slooooowwwwwwww….

Even though technology works so well, not everything can be rendered perfectly in an instant. But by slowing the process down, AXS insures that the odds of the tech getting overwhelmed is nearly impossible.

Once again, beating up on the public, you can watch the above video and get almost all of this. But people are complaining online because they didn’t watch the video. You know, like people who don’t bother to read the instructions. Is that Zach Bryan’s fault? You can never make every single person happy, that’s a fallacious goal. In addition, ten percent of the public is literally crazy, you can’t make them happy unless Zach comes to their house and performs for free!

But unless you’re in the concert business or a Zach Bryan fan, all of the above is probably news to you.

Welcome to the modern age. Where not only is it nearly impossible to spread information, you can be less than a household name and be doing boffo at the b.o.

Yes the goal is not to reach everybody, just those who care. That old shotgun model of network TV, advertising cars to kids without driver’s licenses, just hoping their parents are watching with them? That’s done. Just worry about those who have an interest. Furthermore, if you dun those who don’t care you build anger and resentment, and that’s very hard to overcome. In other words, you might alienate a potential fan who doesn’t even know they’re going to be a fan!

As for Ticketmaster…

Well, Ticketmaster could replicate what AXS has done for Zach Bryan, but the ticketing company only does what the act wants. Not all acts are guaranteed sellouts. Not all acts want to keep prices low. Some acts are so concerned with publicity they want to generate a high number instantly to wow…I’m not exactly sure who, everybody on the inside knows the truth. You discounted your music at the iTunes Store and told your fans to buy it and the track went up the chart. Do you think people don’t know this? As for impressing fans, they’re already impressed, and usually no one else cares.

So I walked into the condo office in Vail to get something and they saw my Eric Clapton jacket and were wowed. Merch, tickets, perks of the business. Every business has perks, believe me. And then the fiftysomething majordomo spontaneously started waxing rhapsodic about Zach Bryan, how he wants to see him at Red Rocks, how his whole family loves Zach, not only him and his wife but his three kids and…

I was stunned.

I’ve done my radio show from Vail, this guy knows what I do for a living, and he has never ever expressed any interest in today’s music. None. And isn’t even that interested in the old music either.

I was floored. How did Zach reach these people? It’s not like he was on the Super Bowl, it’s not like he was on the front page of the paper, he’s got a mild hit, but where do people even hear these tracks anymore? Nobody I know listens to terrestrial radio, they can’t handle the commercials and the repetition. How did he and his family get the word?

That’s the power of great music speaking truth about life written and performed by a credible artist. We were told it was about setup, about clothing, about social media, when really it just comes down to the music, if it’s good enough, That’s how hungry people are.

Treat them right.