BLURTING WITH… The Authors of Ticket Masters

“Who
are the people getting those seats?” Dean Budnick and Josh Baron are here to
sort that question, and others, out for us.

 

BY HAL BIENSTOCK

 

It seems like every day that’s a new, depressing story about
the concert industry – from Katy Perry scalping her own tickets to LCD
Soundsystem selling out their farewell show
in a matter of minutes, yet seemingly
no one winding up with tickets other than brokers. While it’s easy to wax
nostalgic about the good old days when buying concert tickets didn’t require
taking out a second mortgage, it’s harder to figure out why things got so out
of hand and who’s to blame.

 

According to Dean Budnick and Josh Baron, authors of the new
book Ticket Masters: The Rise of the
Concert Industry and How the Public Got Scalped
(ECW Press), there are very
few good guys and a lot of people out to separate fans from as much of their
money as possible. Their detailed book traces the history of the concert and
ticketing industries – from the invention of Ticketron to Bill Graham’s
legendary shows at the Fillmore to the astronomical sums now charged by artists
like the Rolling Stones.

 

The extremely thorough book is as much about business as
music, so readers should be prepared for a lot of talk about the economics of
owning an amphitheater and industry consolidation alongside the scoop about
their favorite bands. The sections on business are critical to understanding
the industry, but the book really shines when it gets to the artists.
Unfortunately, just about the only bands that come out looking good are the
Grateful Dead and a few of their jam band heirs, most notably String Cheese Incident,
who truly live their motto about taking care of their fans and keeping prices
reasonable. On the other hand, a fascinating chapter on Pearl Jam shows their
crusade against Ticketmaster to be not nearly as enlightened as it seemed at
the time. Yes, they wanted to keep prices low, but not if it meant reducing
their share of the profits. Then there are artists like Bon Jovi, Neil Diamond,
Celine Dion and the Eagles, who have been accused of making extra money by
selling many of their best seats directly to brokers before fans even have a
chance at them.

 

We talked with Budnick and Baron about the book and the
state of the concert business today.

 

***

 

BLURT: Why
is the price of concert tickets so high?

Dean: That’s a complex question. If you were to ask certain
people in the industry they’d tell you that ten years ago prices were too low
to accurately reflect all the costs that needed to go into a ticket. But I’m
not sure we’d agree.

        Some of it unquestionably
is service charges, which continue to escalate. Those fees are shared with the artist,
the promoter, the venue and the ticketing company, all of whom are increasingly
aspiring to get larger and larger pieces of the pie. And if the pie can’t be
cut finer, they’re trying to get a larger pie. They’d say that StubHub shows
that the real value of a ticket is significantly higher than it’s sold for. If
you look at shows associated with Live Nation, it has acquired all these amphitheaters
and is publicly traded and carrying a tremendous amount of debt. It has to do
whatever it deems fitting to make a profit for shareholders. Part of that is
raising prices.

 

It’s
been my experience that the cheap seats seem to sell out first these days. For
big acts, I often can’t get a reasonably priced ticket in the 300 or 400 level,
but can easily log on and get one for hundreds of dollars.

Josh: By and large, for those top level acts, those seats typically
do get sold, even if it takes time. If you’re looking at the front rows of most
big concerts, there are not a lot of empty seats. One thing they’re talking
about is dynamic pricing, where if they’ve misjudged, they can adjust prices on
the fly. People are telling us it may be implemented this summer.

 

Dean: The place you can see the stark contrast is at amphitheaters.
Think back to last summer when you had Live Nation employees with sandwich
boards trying to sell 2-for-1 tickets or 2-for-1 with a Coke and a hot dog.
They just want to get people in there. It’s worth it for ticketers who also own
venues so you can sell them a hot dog and a Coke and get them to pay to park. One
promoter told us that being a promoter today is like running a deli. You’re
trying to make money off chips and beer rather than from the show itself. Jimmy
Buffett makes 105% of the door, but audiences will come to his shows and
indulge so it’s worth it to Live Nation to have him at the venue.

 

Have
prices finally gotten so high that fans are fighting back? It seems that artists
like Bruce Springsteen and Bon Jovi, who once would routinely sell out shows don’t
anymore.

Josh: One of the points we try to make is that ticket
pricing is ultimately a consumer issue. If fans vote with their wallets and
feet and don’t go, ticket prices will come down. Every time a consumer buys a
ticket they’re validating that the price point was fair, even if the fan says I
can’t believe I’m paying this much to see the Stones or Roger Waters. Just
being vocal doesn’t work. It needs to translate to the action of not going to
the show. Once Bruce Springsteen sees unsold tickets, you better believe his
price will come down the next time he comes to town.

 

Why are
service fees so high? People like to blame Ticketmaster, but is it really their
fault?

Dean: It is and it isn’t. Some of those service fees are the
profits that accrue to Ticketmaster. But it’s important to acknowledge as
service fees get higher, they’re being shared with the promoter, the venue and
in some instances with artists as well. Artists get it both ways. They gets
guarantees based on the ticket price and they have arrangements where they get
a little off each ticket as well. Beyond that are facility fees and other
add-in costs that accrue to the consumer. But it doesn’t absolve Ticketmaster
because others are benefitting as well.

 

It
seems like every big show today has a fan club pre-sale, an Amex pre-sale, and
all kinds of other pre-sales, yet many people still can’t get good seats. How
can that be?

Josh: People have had mixed experiences with fan clubs.  Dave Matthews’ The Warehouse is a fan club
that pays attention to the history of specific customers. You have to subscribe
and pay an annual fee, but they honor the seniority of their members. With a
band like Phish, they do a lottery. Is it worth doing a lottery for a pre-sale?
Absolutely. It’s free to enter.

 

Dean: With credit card pre-sales, the inventory grabbed is
pretty good. You’re not going to get front row, but you will get really good
seats. But it comes with the additional expense of the credit card. And those
are limited and any number of ticket brokers may also be part of the program
with the hope they can buy tickets and turn them around.

 

Josh: With fan clubs, my advice would be to try it for a
year. A lot of artists that are fan sensitive try to make it worth people’s
while. Fan clubs are not necessarily just about ticketing. They can’t always meet
all the ticketing demand, so they’ve tried to place an emphasis on great and
unique content for members. If you get shut out of tickets, but you got great
music, or behind the scenes video, you may stick around.

 

Dean: If you’re a fan and you can afford it, a fan club is
generally worth it. More often than not you have the opportunity to get good
seats even if you don’t succeed in every instance.

 

What
exactly happened with LCD Soundsystem?

Josh: That was shocking. I don’t know what happened. We saw
something similar with Phish when they announced their reunion shows. They
contracted with a German events company that had done the World Cup, so they
could handle massive loads. But the number of requests they got crashed the
system. It was because of bots. I don’t know if bots took the LCD tickets, but
it is now possible for a show to sell out in seconds or a few minutes.

 

Dean: We talked to a number of people at Ticketmaster who
genuinely were concerned. One has to at least believe that, even if you’re unhappy
with the prices, you will have a chance at securing the best possible seat. That
goes to the core of their business. They try to do what they can and it’s in
their interest, but they’re one company. There are so many people who offer
computer programs that can bypass security and put in rapid fire requests to
secure tickets the moment they go on sale. It’s an ongoing battle.

 

What’s
the best strategy for fans to take to get a decent seat at a reasonable price? Are
they better off trying to get them right when they go on sale or should they wait
until a few days before and try Craigslist/StubHub or hope more tickets are
released?

Dean: If you are a fan, I think there’s something to be said
for fan clubs. That’s not wasted money if you’re committed to a group because
you get all the other content. You can always try at the moment of the initial
onsale. There’s a lot of competition, but if you get lucky, great.  For bands you’re not as sure about, there is
something to be said for waiting it out. Last summer, Live Nation grew
desperate and started dropping ticket prices. And there are sites offering
deals on shows not doing as well, like Goldstar and Groupon sort of models.

        If you’re
really savvy, there are always production holds put on sale a few days out.
You’re still up against the secondary market and bots, but some bands like U2
that are sensitive to fans have put production holds on sale the night of the
show. My wife and I have done that and ended up with great seats. But we had to
wait in line and buy them in person a few hours before the show started.

        There are a
number of groups who care [about the fans]. People like Bruce Springsteen,
Minor Threat, the Grateful Dead, Fugazi. Trent Reznor has been vocal and taken
the initiative to make sure his fans end up with seats without excessive
additional costs. You have to respect those bands who aren’t just concerned
with selling out Madison
Square Garden,
but ask, “Who are the people getting those seats?”

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