I talked to the old CEO of TicketMaster years ago about the fees and when I found out that most of the service fees are kicked back to the venues, I found them far less evil. They take all the blame that should be directed at venue owners.
That supports my theory that TicketMaster's primary reason for existence is to be a scapegoat. Venues want to charge market-clearing prices, but don't want to be accused of "gouging" customers. So they bring in TicketMaster to take the reputation hit, in exchange for splitting the profits.
In my time there, I would agree with that. My theory was Ticketmaster did well for theory reasons:
1) Venue relationships
2) Taking the fall on fees
3) Ability to scale
People are often surprised by #3. Having seen many startups try & fail (as well as large entities like LiveNation), ticketing is a hard problem.
In my time at Yahoo & Google, I believe they have the technology to build a ticketing company, but beyond on that, most -- startups to large entities such as LiveNation & CTS -- had big problems handling onsales for large U2-sized events. In fact, it always made me think "Good luck with that" when people would talk about the design of ticketing systems using relational DBs. :)
That seems disingenuous. It is my understanding that the fees are kicked back to the venue owners only if they make TicketMaster their sole agent. If you sell tickets anywhere other than your box office or TicketMaster, you're not going to see a dime of those TicketMaster fees.
I worked at Ticketmaster for 2-3 years. A chunk does go back to the venue, but also the promoter, and in some rare instances, also the artist. (How else do you pay the artist 105% of ticket price?)
They could combine their fees into the ticket price, but they're afraid the artist will also demand 90% of the combined ticket price, putting significant risk on the table for them. Their motivation is minimal: People still buy tickets & nobody ever blames the venue or promoter. So from their viewpoint, why change?
The thing that irks me the most about Ticketmaster is their absolute monopoly on this market. There's no denying just how crappy of a product they have, which is likely due to not having an incentive or need to innovate as there are no competitors.
Having the unfortunate experience of dealing with them every time I (attempt to) buy football tickets for my college, I really am bothered by the simple lack of innovation in this field. A friend summarized it really well in a tweet a while back:
@Ticketmaster you have absolutely the worst product imaginable. Your employees should be ashamed of the company they work for.
Well, I'd like to take this time to recommend Brown Paper Tickets (out of Seattle). They do a fantastic job, and it's very common to see them used in Seattle. A great, ethical service with minimal fees. Especially for small, local events. Even cooler: if your event is free, their service is free.
Ticketmaster is evil, and it's not just in America, it has lots of child companies all around world and doing the same unfair and awful business model.
This Hubbard guy sounds really smart. My favorite quote was "If we don't disrupt ourselves, someone else will." It seems like a lot of big business failures would have been prevented if the companies had the courage to disrupt their own business model. Microsoft and their foot-dragging on the web comes to mind. Obviously they haven't failed yet, but wouldn't they be healthier if they had embraced the change and pushed it forward instead of trying to hold their position against it?
Anyway, I hope Hubbard has what it takes to pull off his vision.
I think every entrepreneur should read and understand the theories illustrated in the book. It made me realize a lot of things, and understand better why old/established businesses are often replaced by startups.
The LiveNation merger certainly did seem to spark them to update parts of their product, but the user experience is awful. Unfortunately, there's no real major competitor now on that scale. Sure, there are solutions like AudienceView and Tessi but they don't fit the same business model.
And who'd want to compete? LiveNation is owning more and more venues by the minute.
If you like going to the rock show, wrestling with algorithms that deal with high currency, social media analysis on a crazy complete data chain versus the regular induced douchebaggery, building a credible alternative to TicketMaster, or just run-on-sentences, you should come join our team of pirates at Ticketfly in SF.
No big surprise with that. When you have a dominating monopoly on most of the major venues in America, you probably don't lose any sleep at night worry about user experience. The only way that is ever going to change is if people vote with their wallets and stop going to Ticketmaster events...
The problem is that those events are "Ticketmaster events" they are "events I want to attend that are only handled by Ticketmaster."
So it really comes down to accepting the Ticketmaster model or pretty much not going to any live concert or sporting events.
Of course the other annoying thing that the article didn't mention was TM's habit of "sharing" your email address with partners (which you couldn't opt out of) and then leaving it up to the individual to remove themselves from the subsequent spam lists. I bought a ticket to an NFL game a couple of years back and then spent the next six months trying to get TM partners to stop spamming me.
So it really comes down to accepting the Ticketmaster model or pretty much not going to any live concert or sporting events.
I haven't paid a TicketMaster fee in years, and I go to live music events all the time.
How, you ask? Indie music. It is alive and well, and the best bands working right now are not playing in arenas. In any major city in the country on any given night (and at least once or twice a week in most mid-sized cities), you can see a great band for five to fifteen bucks. They'll be ecstatic that you showed up, you'll probably be able to sit or stand within spitting distance of the band if you want, and you'll share a unique experience with 50-300 like-minded individuals. You'll also meet more interesting people, be able to drink good beer (not that swill they serve at arenas for 9 bucks a pop), and you can do it all again the next night, and the next, if you want, without breaking the bank.
I swore off of arena shows for reasons unrelated to TicketMaster, but it's an equally valid reason to opt out of the bullshit commercial entertainment industry and instead focus on artists for whom the work is the important thing, and not merely the money they're paid to do the work.
A number of the venues allow you to buy tickets directly from the ticket window without the extra fees. (The Fillmore allows this during restricted times, e.g.) I will usually try to do this as a way of not supporting the Master--but, come to think of it, I actually don't know how the money is divided when I purchase like this.
Yeah, of course you're right but that is what Ticketmaster is counting on. They are kind of like the TSA in a way. They are hoping that you want what they are offering so badly you won't mind being taken advantage of to get it. It's not going to stop being that way while people take it.
It's a CEO Speedwagon! The story is a nice antidote to the Pearl Jammed version of Ticketmaster's evilness. There's lots of nuance. And, though it might have made a grab for fees early on, Ticketmaster--and Live Nation--finally seem to be innovating, creating services that actually make concerts better.
It's perplexing that they charge such a large premium when the industry must be saving many millions of dollars a year in printing costs, box office attendants, and sales.
One thing in this article that I found extremely interesting was that the infamous charge to print your own tickets -- essentially charging the customer for saving Ticketmaster and the box offices money -- is apparently driven largely by the venues. It claims that Hubbard has been successful in getting a third of their partners to drop the fee, which suggests that two-thirds of venues are holding out, and more responsible for some of the egregious fees than Ticketmaster themselves are.
I definitely came away with the impression that Hubbard may be the right guy for the job. It seems clear he understands exactly what consumers hate about Ticketmaster, and appears to be trying to address it as best he can.
I find it even stranger that they don't simply raise the price of the ticket and hide the cost of the fee that way. If a ticket is $25 and then it has a $5 fee I would be upset, but I wouldn't notice if it was just a $30 ticket.
It's because the promoter pays the band based on the face price of the ticket, not on the total price with fees.
At an incredibly high level, there are two historical economic forces at play:
1) The Irving Deal, which states that the goal of the band is to get 90% of all earnings of any event, including concessions, popcorn, tickets, etc. Obviously a very tough proposition in the event promotion business when some of your events make you money, but most break even and some you lose quite a bit on.
2) The Fred Deal, which is what transformed TicketMaster from being a company that cost promoters money (you pay us $.50 for every ticket we sell for you) to one that made them money (we'll charge the customer an extra $10 and give you $8 of it, but you need to sign a multiyear contract and we sell ALL your tickets).
If you're keenly interested in this, you should read the very excellent and recently published book Ticket Masters goes through all of the history and mechanics in great detail. Immediately upon finishing you should come work for me at Ticketfly in San Francisco where we're solving these sorts of problems on a daily basis. ;)
Everybody hates Ticketmaster's fees, but they are simply capitalism at work. The successful capitalist prices his goods and services not by his costs, but by what customers are willing to pay based on perceived value. (As any seller of software around here should inherently understand.)
Remember that you can, for the majority of venues, bypass Ticketmaster completely by simply going to the box office and buying the tickets in person. Don't want to? Then you're getting what you pay for in the convenience fee. $8 to not travel across the town or state, but instead do your ticket buying while sitting comfy at home, starts to look like a decently reasonable deal.
And that print-at-home fee? Market segmentation writ small. Obviously, print-at-home is more convenient for most customers than waiting for mail delivery. So the successful capitalist can charge more for print-at-home, capturing the revenue from whichever customers are willing to pay it. What costs the industry might incur or save simply don't enter into that question. It's revenue maximizing as all capitalists should strive to do.
Yes, Ticketmaster can do these things because it's a monopoly for any particular event. There is no alternative able to drive down those fees by competing. But this status does not originate with Ticketmaster. Whatever artist you want to see already inherently has a monopoly. Bruce Springsteen already has a monopoly on Bruce Springsteen concerts, because he is Bruce Springsteen and nobody else is. Springsteen and his managers just choose to delegate some of that monopoly power to Ticketmaster.
So yes, everybody hates Ticketmaster, but its practices are really just capitalism and not so different than what companies and startups around here do or would like to.
Uh, no, they haven't "convinced the public" - it's not as if there's any other way to purchase the tickets to events without engaging TM and their extortionate fees. Trying to pretend like TM is a paragon of the free market winning again is just wrong.
