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Smoking Labrador
Many of our clients are comedy clubs, probably not surprisingly since most of us in the office are huge comedy fans. So, when I saw this article yesterday, I admit I did cartwheels on the inside:
Cheech & Chong reunite for first standup tour in 25 years
Now, I never saw them do stand up - I just wasn’t old enough to get in the club - but I have seen all of their movies several times.
I am REALLY hoping they come to the Comedy Club Stardome in Birmingham. There really is no better place to watch a comedy show, and these guys are living legends.
What’s your favorite Cheech and Chong moment? I personally like the “Smoking Labrador” scene. YouTube it for laughs; I can’t link it here due to some “questionable content,” but check out the screen cap above and you can probably figure it out.
Priceless.
Live Nation is having executive shakeups. IAC is spinning off Ticketmaster. The secondary market is growing at a breakneck clip, meaning that, for all intents and purposes, ticket scalping is now legal. Those fortunate enough to be living with their heads above ground have seen the entire entertainment industry change in the last decade. So that leaves us to wonder – what does the future hold for ticketing? The answer lies in some current trends.
- No one is buying CDs.Whether the record labels want to admit it or not, they will never again be able to capture 100% of the monies for distributed copies of music. No matter how many ridiculous lawsuits the RIAA lobs into hail-mary land, there will still be plenty of folks who figure out how to get away with it. Some artists are warming up to (and even embracing) this fact as well. Perhaps they’ve gotten tired of the labels jerking them around and feel like the current disruption borne of Napster and P2P sharing is comeuppance long overdue.
- Because of #1, income diversification is becoming more important to artists.Like Jay Z, Will Smith, P Diddy, and scores of others have figured out already, there’s money to be made on the lifestyle they represent. By branding themselves, they create an entire subculture with built in fans and purchasers, and concordantly are raking in the dough with these extraneous pursuits. For those artists who may not have the knack for designing $400 jeans or busting out Oscar worthy performances as living legends, touring and live shows will provide some much needed income. I like this effect. I hope it will weed out some of the more annoying manufactured acts of the day.
- The internet makes secrets impossible. For artists, this means that the drunken brawl fight, the DUI, or the wardrobe malfunction can get them miles and miles of free PR leading up to an album release. For corporations, it means that now more than ever ethical gray areas and potential shady dealings will be increasingly aired out to the court of public opinion via cyberspace. All it takes is one leak to set off the investigation machine, and with droves of corporate types growing increasingly disenfranchised with their employers, the leaks are coming fast and furious. Thus, there is increased scrutiny on corporate action, and thus increased distrust of larger corporations.
- The internet makes communities easy. Call it “web 2.0” or “Social Media” or whatever you will, but the net is making it easy for like-minded folks to convene and share thoughts. For artists, this means that they can more easily connect with and communicate to their fans, and their fans can help them sell more tickets.
Given these four trends, the future of ticketing will look much different than the Live Nation / Ticketmaster oligopoly of today. I see two possible scenarios. In the first, entertainers will look to connect directly with their fans through their websites and on-line communities, removing the middle man whenever possible to preserve their diverse streams of revenue. Companies that will win in the ticketing (and merchandising) space in this scenario will learn how to partner with artists and entertainers in this on-line market. Instead of the tired “one size fits all” paradigm Ticketmaster has shoved down the collective throat of anyone wanting to sell tickets, companies will win by offering superior service, flexible terms, and solid software. This, the rosier of the possible scenarios, sees artists connecting closer with their fan bases, and fans being more willing to pay to support their favorite artists.
Then there’s an alternative scenario, where the Ticketmasters share more of their piece of the pie with artists. Happily playing the “evil giant”, Ticketmaster will continue to increase fees and line the pockets of the performers while the performers publicly chastise the company to save face. In this scenario, everyone loses. Piracy and theft will be rampant, and the industry will veer toward a more corrupt state.
So what will the future of ticketing hold? If we know anything, change is a coming. Forrester recently predicted that the primary and secondary markets will eventually merge, and that ticket prices will creep toward actual demand. Again, companies that will win in this space will have the data and technology to “right-price” tickets, in essence offering a trusted primary market interface while adjusting price to meet market demand.
A few days back I wrote about the ethical dilemma facing Ticketmaster with the acquisition of TicketsNow, and the perception that their actions in this space seem awfully shady. In that article, I paraphrased a quote from my ethics prof in biz school.
That professor, Marianne Jennings, is now regarded as an expert in the ticketing industry. At the NATB conference last week, she said that Ticketmaster should be cut out of the secondary market altogether. (read the article here). Jennings and her co-presenter Dr. Stephen Happel said that the TM-TN merge created a “vertical monopoly” that can and is hurting consumers.
By allowing a dominant primary ticket seller, like Ticketmaster, to gain more control of a market, consumers are deprived of a “highly evolved market,” which leads to limited choices and less competition, according to the professors. In addition, Ticketmaster has taken an active role in helping legislators formulate new laws for how the ticket industry is governed, which can also lead to unfair advantage.
The good professor goes on to state that TM could play in the secondary market if it played fair, but it looks like the company has no intention of doing that, so far.
Let’s get one thing straight. We’re all for capitalism. Making money is good, but you have to have guidelines. Our strategy is different than that of a Ticketmaster. Instead of figuring out how to make more money off of fans by engaging in borderline illegal and indisputably unethical practices, we’re constantly listening to venue owners, musicians, promoters, and the fans to deliver products and services that people want, and that help sell more tickets.
Ticketmaster is locked into a quagmire of sunk costs. As a public company, their shareholders compel them to deliver growth. Seemingly unable to innovate, they turn to practices such as these- another reason we believe the writing is on the wall for the industry giant. The public demands better and the market is responding.
This weekend I had the pleasure of seeing Seinfeld live (my apologies for the lousy picture as it was the best I could snap without being caught). How did I get front row center seats at face value? Piece of cake - as long as the ticketing vendor uses ticket outlets. Simply show up at the outlet 10 minutes before tickets go on sale (it takes 10 minutes to get someone at the store to come over to the ticket register, dust off the keyboard, remember how to place an order, etc.) - don’t worry, nobody else will be in line as no one else buys tickets at outlets. Two minutes after the tickets go on sale you’ll walk out with the best seats in the house.
Perhaps this post will reunite the pre-Internet ticket outlet fervor of the ’80s and ’90s, but I doubt it. Why?
The use of ticket outlets is bad economics for EVERYONE!
- Ticket buyers pay the same fees at outlets as they pay for buying tickets over the phone and web. Here’s what I paid: $75 per tix plus a $10.80 per tix convenience charge - that’s 14.4% in convenience fees for buying at the outlet!
- Establishing and maintaining ticket outlets cost ticket sellers a lot of money, time, and resources.
- The outlet (i.e. grocery store chains, etc.) sell so few tickets that it can’t be worth the time and energy to train their staff on how to place orders.
- When was the last time you were in the check out line with your box of Ho Ho’s and said “let me walk over to the unmanned ticket counter, wait 10 minutes for someone to show up, and grab some tix to an event?” How inconvenient! Why not call and buy the tix using your cell phone on the way home?
- Has anyone seen any hard data that shows that ticket outlets increase profitability for anyone? Your doctored sales report from your ticketing vendor doesn’t count.
- Cross sale? I think not. Does anyone ever go to a store to buy their groceries because they can also buy tickets to an event?
Why do old school ticketing companies still use/promote brick-and-mortar ticket outlets?
- Sunk costs - they’ve invested heavily in ticket outlets and try to justify their past investment decisions.
- It seems logical that the more places tix are on sale, the more tix you’ll sell. WRONG! It’s about overall profit, not top line revenue. It’s about getting the message to the people that’ll most likely purchase tickets and buy a bunch of stuff while at the event. Why not send a targeted email to likely buyers FOR FREE with a couple of clicks of the mouse or use viral event promotion tools like Promotozoa - one of our newest product offerings (check out some of our beta clients: Comedy Club Stardome, Exit/In, The BottleTree)?
- But I’ll lose the customers that’ll only pay with cash? You think you actually make any money off the tightwad that only uses cash? The 0.0001% of the population that only uses cash is not your ideal customer - trust me.
At TicketBiscuit, we’d rather invest in building better tools that are proven to sell more tickets and increase everyone’s bottom line. Call us old fashion, but we like having a profitable business model that is flexibile, low cost, and high value to all parties in the supply chain.
I really don’t know why I’ve never heard of this before. Orange RockCorps started in the US in 2003 “to act as the bridge between communities in need and young adults in a position to help.” The group organizes volunteering events, then rewards volunteers with exclusive concert tickets.
http://www.guardian.co.uk/society/2008/jul/10/rockcorps.volunteering?gusrc=rss&feed=society
While the article does present a negative side to this idea - that volunteering should be altruistic - I agree with Orange RockCorps founders that it is a great way to mobilize young folks.
Kudos all around, guys.
Marianne Jennings was my ethics professor at the WP Carey School of Business in Arizona. Her class, as tough as it was, ingrained in me the importance of having a clear ethical lens when it comes to business practices. Dr. Jennings could boil down ethical decisions to one simple question:
“What if your actions made the front page of the newspaper? Would you be proud or embarrassed?”
That was 2002, even before the meteoric growth of the “social Internet.” Now, while the relative importance of newspapers can be debated, no one can debate the power of viral messaging. So it was perhaps without surprise then, that this article was passed to me by a colleague late yesterday:
TicketMaster: We were not involved in Elton John ticket trouble in Canada.
The actions of TM and their subsidiary TicketsNow are again called into question, as hard to get Elton John tickets went straight to TicketsNow, where they will, of course, fetch a higher price. The question is though- can TM deny responsibility here? They own both properties, they had to be aware of this and the negative perception it would undeniably seed.
I probably answered that question in an earlier post. TM has enough of a monopoly that they are pretty much immune to public outcry. At least for now. But what about this bizarre marriage of the primary and secondary market? What business rules should apply? TM will never prohibit tickets from its shows from ending up on TicketsNow, that would be completely counter-intuitive. It will be interesting to see how this ethical mire plays out, since the head-in-the-sand excuse will soon lose its efficacy.
I stumbled across this article posted on chron.com, the Houston Chronicle’s website:
It’s pretty amusing how Ellison writes this piece as if it were news. Maybe everyone isn’t as savvy on the benefits of going online as I choose to think they are, though.
I especially like this quote in the article from the Ticketmaster spokesman: “”I think business will continue to migrate to the Web. The Internet provides convenience.”
Pure.
Genius.
/sarcasm
Being located in the “Heart of Dixie,” and like many Alabamians being a rabid college football fan, the following story caught my eye today, for two obvious reasons:
Price of SEC football seats soars (Birmingham News)
The cliffs notes version is this: college football tickets are getting more expensive. The article doesn’t mention any fan outrage, partially because there is not enough to speak of. Ticket prices are the way that teams are funded, and better teams, larger stadiums, better coaches cost more (Alabama fans definitely know this). In fact, the only team mentioned whose attendance has suffered since ticket prices started climbing a decade ago is Tennessee.
What we’re seeing in this scenario is a simplified version of dynamic pricing. If fans are willing to pay more for a ticket, the ticket price can (and should) adjust to meet a level that approaches the limit of willingness to pay. Does this exclude some folks from being able to see games? Yes. Is that wrong? No. This is a tough pill for some fans to swallow, but it is the free market at work.
If we think of the goal of any live entertainment event to generate as much revenue as possible, then we can further deduce that increasing attendance is critical to meeting that goal, even if it means that some tickets are priced higher than others (50 yard line, for example) while others are offered at a level below common face value (the “nosebleed” seats). Based on attendance levels, the price should adjust to fill as many seats as possible. If, for example, attendance did start to suffer, colleges would lower prices again to draw fans back to the gate.
Currently, the secondary market performs this pricing equalization clumsily and in a fractured fashion. But the days of the secondary market as a discreet market are numbered. In the future, software like the models we’re piloting now will do this job on behalf of the venues, keeping all of the revenue currently lost to the secondary market in the hands of promoters, artists, and venue owners. Let me say that a different way – easier pricing and a full house almost every time. You’ll hear much more about dynamic pricing in the future on this blog and in our press releases, so stay tuned for this exciting technology.
Today’s biggest tech news is undoubtedly the launch of the iPhone 3G, eagerly awaited by fanboys and tech geeks since the hubbub died down after the launch of the original iPhone. I gotta admit, even I followed the macrumors blog religiously for some time, drooling over leaked spy shots, carefully examining patent filings. What was Mr. Jobs up to?
Today the headlines are abuzz with news that demand was so great for these new phones that it has crashed both the iTunes store and the AT&T network. The question that I am sure burns in many minds is- what is so darn great about this device? There are other phones that support flash, record video, have GPS, and run on 3G. How come there aren’t droves of fans lined up to snatch them off of shelves?
The great game changing thing about the iPhone is that it finally got cell makers to consider design (much in the same way the iPod did this for MP3 players). The iPhone is incredibly easy to use. The included manual was one folded page, and that was plenty. And it was beautiful. I wish Steve jobs would design a hybrid truck. I’d probably wait in line for that one.
So what does the iPhone have to do with us? We’ve been developing and testing software to encourage the emerging trend of mobile ticketing for some time now- the ability to purchase and receive tickets via a mobile device. As phones become more ubiquitous and indispensable, mobile ticketing will make a lot of economic sense. It will eliminate paper, and will solve a key problem of counterfeiting for venues and promoters. It will also allow dynamic pricing and geotargeting to occur more fluidly, so shows will sell out more often and revenues will go up. The key hindrance to wider adoption now is the diversity of incompatible technologies and the cost of scanners (both of which will eventually pan out in the marketplace).
Whenever the leading tech or group of techs emerge, this trend will go volcanic (I estimate mid 2009), and cell phones will get yet another cool feature: the ability to get you IN.
The Melting Point in Athens, Georgia is the latest live music venue to upgrade their online ticketing and get “Powered by the Biscuit”. In a conversation with Shelby Wright of the Melting Point, she said they chose TicketBiscuit becuase of ease of use and robust reporting. Thanks to Shelby and her team; we’re glad to have you on board!
CareerBuilder.com published a survey today that illustrates the effect of pain at the pump. In a poll of 8700 workers across the United States, almost half of those responding said that they had to give up something in their social lives in order to make ends meet. Perhaps not surprisingly “eating out” and “entertainment” topped the list of extras abandoned.
I heard similar sentiments from a customer of ours, a live music promoter. Citing some recent stats, he said the live entertainment industry was down 15-20% from 2007. The economy is taking its toll on how we spend our leisure time.
What does that mean for companies in the entertainment biz? Not only must we consider lowering ticket prices, or holding fewer events, but we must also look at how marketing and promotional budgets are managed. Sales data from recent events should help you see who is still purchasing, so you can more effectively target your promotional tactics. People still want to enjoy themselves, you just have to make sure you’re talking to the ones that will actually choose to spend.
Okay, so Ticketmaster isn’t the most popular company. In this year’s “Worst Company in America” contest over at Consumerist, they got into the Sweet 16 but were barely edged out by Comcast. But why does everyone hate them? Here’s a quick 5:
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High convenience fees. There’s nothing wrong with charging a fee to distribute tickets. There is something TERRIBLY wrong with charging up to 40% of the face price of the ticket in fees. And the artists and promoters get none of these. Yet.
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They encourage waste. Price for a print at home ticket: $2.50. Price for a mailed ticket: Free. Why this bass-ackwards fee structure? Simple. TM has been around since Moses, and they have a heap of capital invested in envelope stuffing farms. Gotta get their monies worth! TM’s attitude toward the internet can be summed up in a 2000 lawsuit where they tried to sue tickets.com for linking to them.
Right. -
They scalp their own tickets. With the purchase of TicketsNow, someone had to see this coming. Can’t get seats to that Radiohead show? Try our partner, TicketsNow. Evil.
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They have dirty business practices. Operating what is essentially a monopoly, TM has in the past successfully kept bands like Pearl Jam and String Cheese Incident from selling tickets to their own fans, under the guise of exclusive ticketing arrangements with venues. TM has over 90% of the market share in venues, which means they can and do successfully stifle competition.
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They treat their customers poorly. We joke that the local TM rep is our best employee. According to many of our new clients, they never return calls, are less than helpful, and conduct business under this opaque cloak of secrecy. Need a sales report? That’ll be a few days. Want the money for the tickets from your event? Wait until the event is over. Leave a message, MAYBE they’ll call you back.
Ticketmaster’s business model is old. Their competitive advantage and barriers to entry (that is – long term contracts and monopolistic policies) are eroding daily. Smaller companies are figuring out how to win business by offering better service and lower fees to the end consumer. Are TM’s days numbered? Probably not, but the game is definitely changing.
The Order of Myths
July 30, 2008 in Commentary | Tags: culture, fees, movies, the order of myths, ticketmaster | by ehoush | No comments
So, naturally, when I heard that the film would be premiering in Mobile at the end of this month at the historic Saenger Theater, I jumped online to pick up some tickets.
Damn.
The $24 ticket price for two tickets rapidly escalated to $44 thanks to Ticketmaster’s fees.
An 83% increase.
How much of that goes to the Saenger? To the film’s directors or distributors? Zilch.
Apparently others in the community were a bit outraged too - talk of the fleecing made it to the commentary forums on the Mobile Register’s website, al.com. One of the commenters asked, “Why do people put up with this?”
The good news is, you don’t have to. Not this time. Hit the Crescent on August 15 instead and pay a fair price. I’ll see you there. And as for the Saenger and other venues whose customers are currently getting robbed by Ticketmaster, you don’t have to put up with it either. www.ticketbiscuit.com.