Jun 23, 2009
Posted by: Hitsville

How to get screwed in business without really trying

Jon Landau, Bruce Springsteen’s manager, posted a missive yesterday responding to a contention that Springsteen’s organization had held back 95 percent of the good seats at a concert in New Jersey. The allegation was in this story in the NJ Star-Ledger.

You can read the story and Landau’s response and judge for yourself whether there’s a contradiction or not. After acknowledging that Springsteen, like every artist, holds back tickets for friends and family of an enormous touring operation, Landau seems to deny the story’s main contention:

The 2,000 to 3,500 tickets closest to the stage are on the floor and more than 95% of them go to the public, making the basic premise of the Star Ledger headline [“Springsteen withheld best tickets from the public at NJ concert, records show”] inaccurate. Secondly, with regard to seats held in the best sections on either side, we always blend guest seats with fan seats so that there are never any sections consisting entirely of guest seats.

I think there are some interesting things about the Star-Ledger story.

1) In my experience, Landau’s explanation rings true; comp tickets aren’t often or largely directly in front of the stage. There’s of course always a triple-A guest list, but the idea that some 90 percent of the best seats at a show at a Bruce Springsteen concert were turned over to VIPs doesn’t seem likely. In arenas, comp seats tend to be in the side areas closest to the stage; the Star-Ledger story seems to fudge this distinction.

2) The idea that 90 percent of the best seats at a show of a shittier, greedier artist might go to VIPs or to artist-scalped fans is, however, entirely plausible.

3) Note that the Star-Ledger didn’t do the story about a shittier, greedier artist. The one who gets targeted is the only top-tier figure who has dared to speak out against Ticketmaster and Live Nation.

4) Left unsaid is this very real distinction: It’s the artist’s show. Barring holding the tickets back for secret scalping, artists are welcome to keep all the seats back they want. It’s their show, and the money is coming out of their pocket. The issue is when parasitical organizations like Ticketmaster or Live Nation are doing the under-the-table shenanigans.

The story gets junkier from there, including this part:

And, ticket brokers say, [the Springsteen ticket holds] helped drive up prices on the secondary market. Although tickets sold for $95 and $65 in the initial sale, some tickets were selling for hundreds of dollars more on the secondary market.

“Simple economics 101 would tell you that any time you restrict supply the price will be much greater,” said Robb Kenison, a ticket broker from the Washington, D.C., area. “I would not be surprised if a seat in 109, 110, 120 or 121 was double if not triple what it would have been had they sold even 50 percent of the seats in the sections.”

Quoting a scalper complaining about high ticket prices is like quoting a car thief about high car-insurance prices.

Back in the 1990s, when Pearl Jam got drawn into its battle with Ticketmaster, the band, too, became the focus of similar criticism and second-guessing—much of it, as here, from news outlets that never bothered to write about the much-more-outrageous behavior of Ticketmaster before.

Jun 10, 2009
Posted by: Hitsville

Irving Azoff: “Bruce Springsteen is uninformed!”

Just caught up with the All Things Digital interview with Irving Azoff. Kara Swisher is not an unformidable person, but the eight minutes of excerpts we get do not indicate that she was informed or knowledgeable enough about the issues involved to take advantage of a prime opportunity to question a guy who is poised to be the most powerful single person in the history of the music business.

Instead, using a decrepit journalist trope, she merely quotes the opposition, Bruce Springsteen:

AZOFF: We think that everything we do evolves first around what’s good for the artist and good for the fan; that’s our new business plan.

SWISHER: The criticism from Bruce Springsteen, who is not a small act, is that, I don’t want to go through this. I don’t want to be sucked though this..

AZOFF: [flash of irritation] I would basically just say that Bruce Springsteen is uninformed about what the potential of this could be for him.

SWISHER: The idea that you have all these levels, that have to come through you, could be frightening to people …

AZOFF: Everything that’s gone on in the music business has always been frightening … They were frightened of Napster, frightened of iTunes. This is just normal evolution of where the business is going. It’s a myth that there’s not competition out there.

Azoff artully deflects her question into an answer about the industry being frightened, rather than fans and artists. Then he makes a statement that any head of a potential massive combine might make … and Swisher didn’t follow up.

Here’s what else she didn’t ask:

One: Isn’t there a conflict of interest between being a manager and booking a concert tour? What’s good for Live Nation might not be good for a particular artist. It’s like having a real estate agent selling you houses he already owns. Two: Auction pricing. The easiest way for Live Nation to get around scalping is to scalp the tickets themselves, by auctioning them off to the highest bidder. The company’s term for this is “dynamic pricing.” It’s coming.

Three: Both of these companies are in precarious financial shape; shouldn’t a Wall Street Journal reporter ask whether both shouldn’t be allowed to let their respective stockholders take it out on their misguided managements? Specifically, Live Nation used to be called Clear Chanel; that company bought up the U.S. concert industry, and now can’t make it work. (Case study here.)

Jun 09, 2009
Posted by: Hitsville

Visualizing a Ticketmaster/Live Nation future

From TicketNews.com:

Miley Cyrus will sell VIP ticket packages to her show on the site ILoveAllAccess.com, which is offering “[e]xclusive access for Miley Cyrus fan club members only, with special password, until June 9 17:00 BST,” according to their Web site. ILoveAllAccess.com is owned and operated by Ticketmaster’s Front Line Management, which is Cyrus’s management company.

VIP tickets, which will cost $295 each, are not yet available for sale. Instead, they state that tickets are “coming soon.” Myley Cyrus tickets officially go on sale on Monday at Ticketmaster. ILoveAccess.com states that the ticket package includes a seat in the first 25 rows, access to the pre-show party, a gift bag, a souvenir, and parking.

It’s a glimpse into the future. Front Line Management is Irving Azoff’s management company. Ticketmaster is the the company he now runs. And Live Nation will be putting on as many of the shows that Azoff can manage.

TicketNews quotes a Ticketmaster competitor:

Don Vaccaro, president and CEO of TicketNetwork, told TicketNews that “this appears to be nothing more than a bait and switch by Miley Cyrus.” Vaccaro added that “her camp doesn’t disclose to her teenage fans that she is withholding her best tickets to scalp them at almost $300 each, leaving her true fans without access to some of the best tickets.”

Apr 13, 2009
Posted by: Hitsville

A white paper analyzing the antitrust aspects of the Ticketmaster/Live Nation merger

The American Antitrust Institute has just published an anaysis of the merger. It’s not positive:

The discussion considers two other attributes of the proposed transaction that make it even more problematic.  First, one of the chief concerns raised by the merger is that Live Nation Entertainment would be a vertically integrated enterprise with dominance or substantial power on six market levels.  The new entity would therefore be able to use its strengths in some markets as leverage to gain customers or compliance in others.  Moreover, this vertical integration would effectively frustrate new entry, because as a practical matter it would require firms seeking to compete seriously against Live Nation Entertainment to enter the industry on several levels at once.  The second factor is that the merged entity would likely enjoy market power not just as a seller but also as a buyer.  In essence, the company’s market dominance would benefit it in both ways.

The paper also considers whether the merger, suspect on its surface, might yield efficiencies that warrant not challenging the transaction.  In this regard, the Department of Justice may consider only efficiencies that (a) arise specifically from the merger and would not be attainable in other reasonable way, (b) are not speculative and whose benefits are
verifiable, and (c) outweigh the harm caused in every adversely affected market.  The efficiencies claimed by the parties satisfy none of these requirements.

Emphases added. The whole paper is available here.


Previously in Hitsville:

A new Ticketmaster Phish screwup
An economist on scalping

Live Nation’s NYC parking fee three-card monte
Ticketmaster’s definition of the word ‘scalping’
Bono, noted Live Nation employee, ducks merger questions from DeRo!

The Corgan meltdown—It gets worse

Ticketmaster, Live Nation, and the ‘secondary market’

The best article yet on the Ticketmaster/Live Nation debate

Hillary Rosen—She’s baaaack!
Ticketmaster service fees: Where the money goes

Live-blogging the House hearings on the Ticketmaster/Live Nation Merger
“Re”-selling tickets that don’t yet exist

Liveblogging the Senate’s Ticketmaster/Live Nation Merger hearings

Seal & Van Halen in Azoff’s corner!
Updated! 26 questions that should be asked at the Ticketmaster/Live Nation merger hearings tomorrow
Ticketmaster shareholders sue to stop merger
How Live Nation does business
Will the Live Nation/Ticketmaster merger mean higher concert prices?
Another suit against Ticketmaster
Constantly updated: The Ticketmaster-Live-Nation unholy-matrimony news round-up!
Five arguments against the Live Nation/Ticketmaster merger
Irving Azoff kicks it old school
The music industry’s Putin
Bad merger coverage
WWBD (What would Bono do?)

Billboard’s analysis of the Ticketmaster/Live Nation merger

Springsteen and Landau bash Ticketmaster and Live Nation!

P.S. on Ticketmaster: A case study, starring Bruce Springsteen
Why the potential Live Nation-Ticketmaster merger is a very bad idea

Is Ticketmaster trying to muddle the fees issue?

The Azoff-Ticketmaster deal: Bad news for concert-goers—and the music industry
Why you so seldom read about obscene Ticketmaster-style ticketing charges

Apr 06, 2009
Posted by: Hitsville

Schumer goes after the scalpers

TicketNews reports that the NY senator is planning to introduce a bill that would … well, I’m not sure exactly what it would do:

New York Sen. Charles Schumer, a vocal opponent to the proposed merger of Ticketmaster and Live Nation, said he is planning to introduce a bill this week that would prohibit all sales of tickets on the secondary market until two days after the tickets initially went on sale to the public.

That seems to mean what it says—that scalpers couldn’t sell tickets for two days after they go on sale. Later in the story, though, we get this:

Supposedly, brokers would not be allowed to purchase tickets until two days after they went on sale, but how that would be monitored was not yet explained. However, his proposal would require brokers to register nationally with the Federal Trade Commission to help eliminate fraud.

The story says the bill would also outlaw presales, where scalped tickets are offered before the real ones even go on sale. It also says that Ticketmaster and Live Nation said they would support the bill.

Anything that messes with scalpers is a good thing,  but it’s hard to see how this would affect scalping at all, which is probably why the companies are OK with it.

The issue isn’t when the tickets are resold.  The issue is the corruption of the process of putting tickets into the hands of the public. If you allow scalping, it sets in motion a variety of efforts by the scalpers to amass the best seats.

This involves everything from paying off insiders for tickets or setting up computer programs to buy the tix automatically many times faster than humans can.

Hard to see what Shumer’s bill would do to stop that.