This week’s blog post was written by music industries blogger, Bob Lefsetz, and originally published in the regular Lefsetz Letter.
In it, he examines Adele’s attempts to beat the touts for her latest tour by using paperless ticketing. As reported in The Guardian, Songkick, which handled the Adele ticket sales, allowed fans to register, and to “use its proprietary technology to identify touts, reduce their ability to purchase tickets when advance sales commenced on 1 December and to cancel as many tickets appearing on secondary ticketing sites as possible.” (Unfortunately, a problem with the online sales system meant that some fans saw other people’s confidential information such as names and home addresses.)
Bob Lefsetz’s piece addresses Adele’s tour in the wider context of the live music and (secondary) ticketing industries to question whether the infrastructure needs to change in order that tickets are priced correctly and, if so, who has the power to change it and how.
Adele Beats The Touts
Not that you’d know that. The news story is how Songkick flubbed the sale by revealing buyers’ info. Songkick says nothing of consequence was revealed. But the public flips out over data breaches. Rightfully so. All of which means it’s hard to do big things on a big scale. And despite so many flaws in Ticketmaster’s system, with legacy spaghetti code impairing the introduction of both remedies and new features, ultimately it works. And that’s important.
Ticketmaster, the company you love to hate. Even at this late date. Not knowing that the enterprise is a front for the greed of the acts, that it’s paid to take the heat. But it’s like finally finding out your favorite baseball player uses steroids, or that Lance Armstrong was on dope, you don’t want to believe it.
Not that I don’t give credit to Songkick. It deserves praise for not only breaking the hegemony, but making sure Adele tickets did not get into the hands of brokers. As MusicAlly put it:
“Last night, Music Ally visited three of the most prominent secondary ticketing sites – Seatwave, GetMeIn and StubHub – to count how many tickets were available for the three artists’ UK tours (a fourth, Viagogo, does not show total ticket numbers for gigs, so we didn’t include it). Coldplay’s six UK dates had 17,631 tickets available across the three secondary sites; Rihanna’s six UK gigs had 9,290 tickets available; and Adele’s 12-concert run had 649 tickets for secondary sale. Or to put it another way, the average number of secondary tickets per Coldplay gig was 2,939, compared to 1,548 for Rihanna and just 54 for Adele.
Even with caveats – Adele is playing arenas while Coldplay and Rihanna are playing stadiums, and StubHub surprisingly had no Adele tickets available at all – those figures are startling.”
Needless to say, there are tickets available on resale sites now. But not many. So Adele succeeded in her mission, but don’t forget she employed paperless the last time around.
But before we move on to the interests and culpability of the acts, let’s get back to Songkick, the site that lists concerts and is trying to move into ticketing. The problem is in most cases they can’t get significant inventory. Because the only profit in most gigs is in the ticketing. As far as the revenue for sales, everything before the fees? That all goes to the act.
Welcome to the 2015 concert business. Which is why so many promoters are moving into festivals, it’s a much better way to make money, with much better margins. In both cases you take risks, the downsides are horrifying, but the upside in festivals is so much greater.
So if the only profit is in the tickets themselves, in the fees, why should the promoter share them? Why should they forgo the fees?
And there you have the major battle. That’s why the big ticketing companies are entrenched. Live Nation looks like a concert company, but really it’s a ticketing company.
How did we get here?
Well, there are two sides. The ticketing companies paid the buildings for exclusive contracts. And then the acts, worried about promoters ripping them off, insisted on large guarantees. And the fees are outside the acts’ percentage deals, there is no “commission.” However, none of this is written in stone, everything’s negotiable. So you have superstars getting kicked back ticketing fees and…
The fees. They all don’t go to Ticketmaster. Sure, Ticketmaster takes some. But there’s a cut for the building, and then the promoter…this is often the promoter’s only profit, as stated above.
Meanwhile, you can’t get a good ticket.
How can this be?
Well, we have the insanity of pre-sales. Wherein the act gets paid for sales windows. AmEx, Citi, fan clubs… By time the ad runs in the paper there may be fewer than a thousand arena seats left. So, good luck getting a decent seat if you don’t have the right credit card or know somebody. The fiction about sitting in your underwear on Saturday morning clicking to buy… That means you’re just completely out of the loop.
Then you have the issue of the price of the ticket itself. Generally speaking, they’re way underpriced for superstars, who don’t want to appear greedy. So these stars get pissed and sell tickets to brokers directly, as do promoters, to get a taste of the upside.
But enough history, enough shenanigans. How do we fix this? How do we get the seats to the customers at the listed price?
YOU’VE GOT TO WANT TO!
Despite all the lip service, acts are wary. Because they remember the Miley Cyrus paperless fiasco. She goes on tour and moms can’t get tickets for their kids and attorneys general start rattling their sabers and the next time Miley goes out she sells paperless tickets and finds out demand’s just not that strong. That’s right, the brokers help create the frenzy. While they’re asking stratospheric prices for tickets often you can still buy primary seats at face value. Miley didn’t sell out, her image and career took a hit, and ever since…people have been afraid of paperless.
But not Adele, BECAUSE SHE KNOWS SHE’S GONNA SELL OUT!
How many acts can guarantee this? Certainly Taylor Swift. But you’d be surprised how few guaranteed sellouts there are. And there’s more than one way to skin a cat, more than one way to recapture the income going to brokers.
You can use platinum, VIP Nation. Sell the best seats for what they’re worth. Directly to those who want to buy them. This has worked extremely well, usually there’s a bonus or two attached, a laminate, a backstage tour, a meeting with the band, but that’s all just window dressing, these tickets are being sold for what they’re truly worth.
The Stones employ flex-pricing. Instead of charging low prices and having the brokers scoop up all the tickets, they start high and lower the price depending upon customer adoption. The longer you wait, the better price you might get. Assuming a plethora of people don’t want to pay a high price and eradicate all the inventory long before the gig plays.
And then there’s selective paperless. Paperless for just some of the house, the best seats.
Meanwhile, the building holds back seats for season ticket holders and…
I don’t want to educate you on all the ins and outs of ticketing, of the concert business. But the truth is it’s sophisticated, and with such thin margins, you’re either winning or you’re out. Everybody inside knows everything. Everybody outside knows nothing. This is not a technology issue, this is an INFRASTRUCTURE issue, as in how business has continually been done.
The acts don’t trust the promoters and the acts have short shelf lives but it’s the act’s name on the ticket…and now you’re aware of some of the competing interests involved, the thoughts that go through the artist’s head. Price tickets too high and not only do you not sell out, but you’re seen as greedy. Charge a low price and your fans complain they can’t get good seats, if at all, and you’re pissed that all that revenue goes to the brokers/resellers.
And that’s a business. Don’t buy extra tickets with the idea you’re going to sell them yourself. That’s just displaying your ignorance. Many shows aren’t really sold out, extra dates are added. A broker can sell only half of his inventory at an inflated price and doesn’t care if the rest of his tickets go unused.
And there you have it.
The best way to move forward is to charge what the tickets are worth. That’s what the Stones do, if you want to pay, you can get in.
Or in the alternative employ paperless or the Adele/Songkick paradigm. But then you run the risk that demand is not as strong as you believe it is.
But the truth is fewer and fewer members of the public are pissed off about all this. They’re not worried about on sale dates, the fact that shows go up a year in advance, they just wait until they’re ready to buy and…purchase their tickets from a broker, whether it be an individual agent or a corporation like StubHub. Hell, the resellers’ tickets are listed on Ticketmaster right beside the primary inventory.
People want the illusion of freedom. The ability to buy what they want at a low price and resell it with no loss. But try buying a hot tech product on launch day. And try selling it for full price a year later, even months later. The concert business is no different, it’s just that the inventory is evanescent. Once the date plays, pfft…there’s no asset left.
So I applaud Adele for her efforts here. Good work.
But it’s not gonna change the business, no way. Not now. It’s a good first step. But if most acts were truly concerned about their customers they’d follow Kid Rock’s example and charge twenty bucks a ticket. But despite Rock going out at this price twice, despite a ton of publicity, no one has.
Change can happen.
But people have to want it.
And it turns out most acts don’t want it that bad.
Thanks to Bob Lefsetz for allowing us to re-post this article, the original of which can be found here on the archive of the Lefsetz Letter, a regular blog about the music industries from an inside perspective.
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