Most of you have probably seen the press release by now, but for those who have not, we made a very big announcement today. Essentially, we’re allocating $10 Million dollars to contribute to America’s live entertainment venues and promoters to help keep them independent.
What does “independent” mean? Basically, not involved contractually with Ticketmaster and/or Live Nation. In my opinion, Ticketmaster has done more harm than good in the live music space as of late. The most recent troubling revelation was that Ticketmaster allegedly used its secondary ticketing subsidiary, TicketsNow, to inflate ticket prices for high demand concerts. Ticketmaster has denied any wrongdoing and an investigation is pending. But the whole thing just looks bad.
And now the impending merger with Live Nation. Live Nation enjoyed relatively favorable customer relations until earlier this year. Many folks (including us) were rooting for Live Nation’s new ticketing platform at launch. We know that they’re competitors. But competition is good in this market. It keeps talent accessible and fees low. But our cheering, like that of many, turned to jeering upon first learning that Live Nation’s fees were as high – if not higher – than those of Ticketmaster. And based on the experience of many a Phish fan, the Live Nation ticketing systems were seemingly insufficient for a massive onsale event.
From a business standpoint, the merger makes great sense. It makes sense because TM’s and LN’s previous competitive stance toward each other would have ultimately ended in mutual destruction. It makes sense because they have complementary strengths. It makes sense because Wall Street loves it; the stock price of both companies jumped at the mere rumor of the merger.
I will also acknowledge that this deal will be good for some. Major headlining acts will benefit. Management companies could benefit. Advertisers could benefit. But make no mistake about it: in this relentless focus on financial benefit and the money to be made, music fans, independent musicians, independent venues, and independent promoters, in my opinion, will lose out. In short, this deal will represent the largest consolidation in the history of the live music industry.
Consolidation means fewer choices and higher prices for fans. And that’s what the Music Liberation Fund is meant to fight against.
Is there something in it for us? Yes. Are there strings attached? Sure. But we’ll make all of that perfectly transparent to those who qualify for fund proceeds. The bottom line is that artists, fans, venues, and promoters need a choice. And with any luck, the MLF will help ensure that they always have one.
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February 13, 2009 at 9:42 am
What’s Buzzing? » Blog Archive » More on the Music Liberation Fund - From Ticketbiscuit’S Ceo …
[...] But make no mistake about it: in this relentless focus on financial benefit and the money to be made, music fans, independent musicians, independent venues, and independent promoters, in my opinion , will lose out. …Continue [...]
February 23, 2009 at 12:21 am
Jason
Where did you get $10 million?
February 24, 2009 at 3:44 am
jgale
The math is pretty simple. TicketMaster earned about $1B in revenue from ticket fees in 2008. Since most of their contracts carry a 5-year term, roughly 20% of that ($200M) should be up for grabs in 2009. We estimate that we can capture 10% of those expiring contracts, which works out to $20M. We are willing to share half or more of this revenue back to venues and promoters who come on board with us via the MLF, hence the $10M figure. Those venues and promoters would then be free to share that revenue back with their patrons in the form of reduced or eliminated service fees. Unlike Ticketmaster, we do not dictate the amount of any service fee that is added to the cost of the ticket. Further, we always counsel our clients (primarily venues and promoters) to keep service fees as low as possible, as a means of encouraging advance sales.