Ticket Masters

Dean Budnick, Josh Baron

Description

Since its launch in 1975, Ticketmaster has come to achieve such market dominance that some critics have denounced the company as an unlawful monopoly. Yet its path to the top was far from inevitable. Ticket Masters is based on first-person interviews with the key players and describes the behaviour of many world-renowned musicians from the righteous to the rapacious. With access to promoters, musicians and execs alike, Ticket Masters offers new riffs and wrinkles on a saga of ambition in the entertainment industry.

Sujets

• Gestion et management
• Music industry

Informations

• Publié par: Ecw Press
• Date de parution: 01 juin 2011
• Nombre de lectures: 0
• EAN13: 9781554909414
• Langue: English

Extrait

Copyright © Dean Budnick and Josh Baron, 2011
Published by ECW Press
2120 Queen Street East, Suite 200, Toronto, Ontario, Canada M4E 1E2
416-694-3348 / [e-mail]
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any process — electronic, mechanical, photocopying, recording, or otherwise — without the prior written permission of the copyright owners and ECW Press. The scanning, uploading, and distribution of this book via the Internet or via any other means without the permission of the publisher is illegal and punishable by law. Please purchase only authorized electronic editions, and do not participate in or encourage electronic piracy of copyrighted materials. Your support of the authors’ rights is appreciated.
Library and Archives Canada Cataloguing in Publication
Budnick, Dean
Ticket masters: The rise of the concert industry and how the
public got scalped / Dean Budnick, Josh Baron.
Includes bibliographical references.
ISBN 978-1-55490-941-4
Also Issued As:
978-1-55490-949-0 (PDF); 978-1-55022-949-3 (PBK)
1. Ticket brokerage. 2. Performing arts—Ticket subscription.
3. Performing arts—Ticket prices. 4. Ticket scalping.
I. Baron, Josh II. Title.
HD9999.T522B83 2011 381’.4579 C2010-907123-9
Developing Editor: Jennifer Hale
Cover Design: David Gee
Text Design: Tania Craan
Production and Typesetting: Troy Cunningham





Dean: To my gold circle: Leanne Barrett, Caroline Budnick, Quinn Budnick, Alfred Budnick and Janet Budnick
Josh : To Rachel: Thank you for enduring my frequent absences during our first year of marriage and for being my biggest champion through your ceaseless encouragement.



PROLOGUE
The Summer of Their Discontent
THE CHAIRMAN HAD SPOKEN .
On the evening of August 3, 2010, Irving Azoff, whose role as chief executive officer of Ticketmaster had recently expanded following an industry altering merger that furnished the new title of Live Nation executive chairman, bypassed the company’s publicity firm to offer his first direct message to ticket buyers via the social networking service Twitter.
Azoff’s comments fell in the midst of what looked to be the most miserable U.S. summer concert season on record. Weak ticket sales had forced the cancellation of numerous high-profile performances, starting with a series of stadium shows by Azoff’s longtime management client the Eagles on a bill with country superstars the Dixie Chicks and Keith Urban. In the weeks that followed a number of “recession-proof” acts did the same, as the Jonas Brothers, Rihanna and Lilith Fair all canceled multiple dates. Limp Bizkit scrapped its U.S. amphitheater tour and Christina Aguilera soon followed suit, citing “prior commitments.” Even the annual American Idols Live! outing, which had blown out tickets in prior years, was forced to scale back its itinerary, dropping seven shows and rescheduling many others.
Entertainment reporters and Wall Street pundits alike took particular interest in the flagging amphitheater sales figures since most of these “sheds” were under the control of Live Nation. The summer of 2010 represented the first official go-round for the blended company after the government had approved the union of the world’s largest live event promoter, Live Nation, with the world’s largest ticketing agency, Ticketmaster (which had recently acquired the world’s largest artist management firm, Azoff’s Front Line).
The Department of Justice’s ruling had been preceded by nearly eleven months of inquiry and two congressional hearings. In February 2009, shortly after the corporations announced their intent to unite, Azoff had been summoned to Capitol Hill in a moment that echoed former Ticketmaster CEO Fred Rosen’s 1994 appearance before Congress in the wake of a public dustup with Pearl Jam. However, unlike the earlier inquiry, which in many respects resulted from the fight over a nickel, by 2009 billions of nickels were in play. As a result, both the House Subcommittee on Antitrust and the House Subcommittee on Courts and Competition Policy elected to weigh in on the matter.
Ultimately though, it fell to the Obama White House and his Department of Justice to determine whether to block the merger as an illegal restraint of trade. The federal government eventually granted its permission over the strident objections of opponents, who charged that the mega-company would raise prices and inhibit the development of new musical artists.
By August 2010 a growing segment of the financial community began offering its own criticism, as initial optimism regarding the prospects of Live Nation Entertainment was falling in tandem with the rate of ticket sales.
Over the course of the summer the company had taken a series of increasingly desperate measures to draw audiences into its amphitheaters. Package deals that offered coupons for a free soda and a hot dog gave way to mid-June’s “No Services Fees” promotion, which proclaimed, “Your summer concert tickets at Live Nation amphitheaters now have No Service Fees” (even as an asterisk qualified, “Parking, shipping and other non ‘service fee’ costs may apply”).
In late July the company instituted a $10 ticket program, which dropped prices even lower, scrambling to achieve a short-term financial benefit that led some prior ticket holders to grouse about their decision to purchase seats during initial sales at much greater expense.
When the expected windfall wasn’t realized, Live Nation then outfitted employees with sandwich boards and paraded them through its venues, tickets in hand, hawking the cheap seats for future shows. Yet despite all of this, sales figures remained low as audiences were uncomfortable with the overall price structure of the concert experience.
In the face of these events, at 10:53 p.m. on August 3, Executive Chairman Azoff shared his sentiments with the public via the immediacy of Twitter.
“So if you want ticket prices to go down stop stealing music.”
Seemingly absolving his company of responsibility, Azoff placed the burden squarely on the overburdened shoulders of consumers. This wasn’t the first time he had conveyed such a message. A few weeks earlier, at Fortune magazine’s Brainstorm Tech conference in Aspen, he had shared similar thoughts about his customer base with the magazine’s managing editor: “If they could figure out a way to steal the tickets they would, just like they steal movies and music. But so far they haven’t figured out how to do that.”
The declining sales of recorded music held deep significance for Azoff, who in addition to running Front Line Management had previously headed both MCA and Giant Records. Still, few concertgoers appreciated his sentiment, flustered and frustrated as they were by parking costs, concession prices, $5 add-ons for the “luxury” of a short, ordered line into the venue, as well as the very price of tickets themselves, with their vexing array of fees. Consumers pointed, for instance, to Lady Gaga’s Monster Ball tour, in which a single $20 lawn ticket could cost nearly $50 after a “facility charge” ($12), “convenience charge” ($10.05), “order processing fee” ($5.20) and “TicketFast Delivery,” i.e., print-at-home ticketing ($2.50).
The sheer magnitude of it all had led one would-be concertgoer to profess in an online forum, with equal measures of humor and irritation, “Screw Live Nation, I’m grabbing these tix after the show.”
Other music fans were baffled by their attempts to ascertain the fundamentals of concert ticket pricing. What is included in a service fee, they wondered, and why does the cost of that service vary with the price of a ticket? Who profits from these extra charges? Why are tickets sold online with impunity for five times their face value? Aren’t there laws to protect consumers? Are musicians really scalping their best seats? And what’s up with these VIP packages? Where do they find those front row tickets, and who reaps the benefits? Just what is a facility fee, and if the public is paying for renovations of some sort, shouldn’t all the amphitheaters be recast in platinum by now? And just how did ticket prices get so high anyhow?
The story is complex, the players dynamic, the motives varied.
It all began with the simple, elegant notion that tickets could be marketed and sold more efficiently with the aid of a computer.
That eureka moment unfolded in the midtown Manhattan of the 1960s.




CHAPTER 1
A Few Reservations
THE LAST THING HARVEY DUBNER needed was another idea man.
He’d seen his share of them parade though his Madison Avenue office at New York City’s Computer Applications Incorporated (CAI). As vice president of system design, Dubner occupied a unique role at the software house, serving as CAI’s lone hardware expert. Most anyone who was pitching a potential project ultimately was funneled to Dubner, who gauged its viability.
Lately this had meant deflating any number of computer-enhanced caviar dreams. Ever since CBS News had enlisted the newly minted UNIVAC to provide analysis of the 1952 U.S. presidential election, the mainframe computer had become increasingly mainstream. Over the years that followed, the public grew fascinated with electronic data processors and their seemingly limitless potential. Although computing power remained cost-prohibitive, with price tags for the larger systems running well into the millions by 1966, there was no shortage of dreamers (and schemers) who sought to put mainframes to use. 1
This was where “service bureaus” came into the picture. CAI, then the largest such entity on the East Coast, created custom software solutions packaged with the appropriate computer host. Typically this meant developing programs for businesses such as Western Unio