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
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