You are currently browsing the category archive for the 'Commentary' category.
I recently started subscribing to the Lefsetz Letter. Bob Lefsetz (the author) has been publishing his thoughts for 25 years. He addresses the issues that are at the core of the music business: downloading, copy protection, pricing and the music itself. To say he is an expert is a bit of an understatement.
Anyhoo, Bob’s latest post is one that I think all owners of venues should read. In it, he talks about the perceived value of admission and tries to get you thinking about what it is, exactly, that keeps folks coming out to see shows at your place. Here’s an excerpt:
Music needs to be a good value. It hasn’t been a good value for in excess of a decade. Ever since Robert Sillerman rolled up the regional promoters into SFX. Now prices are high. It’s like sports. But music ain’t sports. And I won’t go to a baseball game on a whim anymore. Used to be $3 and you sat in the upper deck or bleachers and got fucked up and who gave a shit about the game. Now, you’re pissed if you go and the game is shitty. Because you paid a fucking fortune! But, at least the teams are classic, they don’t change. We’re trying to break acts in the music business. We can’t overcharge.
We need some innovation.
Bob has some interesting thoughts on how to increase perceived value and pack the house without giving away tickets. Check out the full post here, and if you are in the music industry, you should mos def subscribe.
This week, Jeff and I had the distinct pleasure of traveling to Southern California to promote BattlePass and our new relationship with Roy Englebrecht Promotions. As you may remember from an earlier post, Roy is one of the nation’s top promoters, and has been promoting fights in California for almost 30 years. Next year marks the 25th anniversary of his Battle In the Ballroom Series, for which we will be the official ticketing provider. Anyway, from this past Friday until Monday, Roy held Fight Promoter University Five, a four day seminar and experiential learning curriculum targeted at wannabe promoters. Since Jeff and I were very interested in establishing relationships with these guys, we decided to sit in on Roy’s classes.
Boxing and MMA Promoters have gotten a pretty bad rap recently, thanks largely to the antics of Don King and a few other shady characters. What I learned, though, is that promoters like Roy adhere to a few solid business principles that make them successful. Here are ten that I picked up this past weekend, that seem to drive Roy and his team.
- Always pay attention to details. The professionally printed fight card won’t make people buy tickets, nor will the police beacons above the ring poles. But, they do convey a sense of uniqueness and professionalism. These sorts of subtle clues can influence your credibility in a big way. Which leads us to #2:
- Credibility is everything. You have to cultivate relationships in business in order to last. The degree to which you can make and keep commitments and continuously deliver a phenomenal product at a great value is directly related to your longevity.
- Have fun. Though Roy got a bit stressed immediately before the fighter weigh in, he always looked in control and like he was loving it. As the night unfolded, Roy took on the persona of a master puppeteer, as his meticulously crafted show unfolded to the delight of the sold out crowd. He was entertaining 1500 people, and having a ball.
Yours truly with Michael Buffer. "LET'S GET READY TO RUMBLE!"
- Bartering is good business. You have something of value. You need something of value from another businessman. In a world where cash is king, the act of bartering buoys many a small business. Roy is a mastermind at the act of trade. Professionally printed fight cards? 20 seats. Fight Staff? Internship credit at the local junior college. Even Richard Schaeffer, the CEO of Golden Boy Promotions (on it’s way to becoming the largest fight promoter in the country), stressed the importance of bartering. Many of their sponsorship deals for their upcoming MMA fight have some sort of trade aspect to them.
- Do good. This one is pretty self explanatory, but for Roy, it is central to his character and his operation. If you do good, good things happen. Not just to you, but to the people around you, your sponsors, your fighters, employees, and so on.
- Empty seats breed empty seats. Roy will barter huge blocks of seats in exchange for products or services. While the exchange itself is valuable, there is also value in his attendees’ perception of a full house. It’s like verification that they are doing the popular thing. If you went into a restaurant at lunch hour and the place was empty, how confident would you be in the quality of the meal? In a more generic business sense, find out how much of your product you can afford to give away in order to establish a sense of presence in the market.
The "Winterfist" Fight sold out completely.
- Try some crazy ideas. Jeff and I got pretty tickled hearing about some of Roy’s ideas. The most memorable was one where he set up a barber’s chair in the back of the boxing arena and ran a hair cutting promotion in the middle of a boxing match. For every crazy idea that didn’t work though, Roy had ten examples of things that did. Never be afraid of risk.
- Know who your customers are. You don’t sell out 19 straight shows on accident. Roy spends no money on radio, TV, or print advertising either. What he does do is create exciting incentives for every show attendee to provide their name and contact information. Roy used a cash prize promotion, a pretty straightforward idea. But, he incorporated principles of showmanship (calling out the winner and inviting them to a ringside seat for one bout) and instant and visible gratification (the winners were paid, in the ring, in front of everyone) to make it almost impossible to resist.
- Great people make a great operation. As part of the curriculum we got to watch one of Roy’s MMA fights. There were seven incredible bouts, many by fighters making their professional debut. Roy’s matchmaker, Arnold Berger, has a huge future in the business. The degree to which he spends his time and effort really getting to know the fighters was evident in the quality of the matches. The two hour show never got boring, even in between the bouts, thanks to Mike Hart, the ring announcer. Mike carried on a conversation with 1500 people with a smooth as butter style. And don’t even get me started on the ring girls. Roy hires right, period.
- Passion breeds achievement, achievement breeds success. This sounds like one of those cheesy inspiration posters, but it is nonetheless true. Only through the continuous relentless dedication of themselves to producing top quality shows has Roy and team been able to enjoy the success they have. You can’t fake it in that sort of pressured environment. Without passion, you burn out quickly.
- Jeff and “Razor” Rob McCullough
Check out Roy’s website at www.battleintheballroom.com.
We’ve said this since, oh -2001. Why do companies break the ticket fee out in a line item to consumers? I’ve blogged about it on several occasions, but our general feeling is that “convenience fees” are hated by customers. I personally helped work the call center for an event recently, and more than one person expressed dissatisfaction with the fact that fees were charged at all.
Now, the company who trained consumers to hate convenience charges by systematically defrauding and flogging them for the past two decades has decided to swipe a page from our playbook. You can read the article here, but basically, TM is trying an “all in” ticketing price. The article implies that this was the idea of Irving Azoff, the high powered new CEO of Ticketmaster Entertainment who joined the company when Front Line Management merged with Ticketmaster earlier this year. They will test the strategy on the upcoming Eagles concert tour.
I tried to buy Eagles tickets for the “Hell Freezes over” tour back around 1994, Tickets were $90 for nosebleed seats at BJCC. I can imagine once you factor in all of the TicketMaster fees this time around you may drop two or three benjamins to see Glen, Don, and the crew phone in your favorites.
Regardless, this is a good idea. I have no doubt that Ticketmaster will see better numbers with this experiment, and this may become their standard operating practice in the future.
So let’s see- in the past couple of months Ticketmaster has:
- Merged with FrontLine Management in a copycat strategy to address LiveNation
- Renamed the company to reflect the acquisition
- Named a new CEO, and
- Changed their ticketing strategy
Seems like straw-grasping to me. In their quarterly revenue report, Ticketmaster showed that revenues dropped 76% from the quarter earlier. The economic downturn is hurting them (as it is most live entertainment businesses) and they are trying to respond. Will any of their responses benefit musicians or music fans? Probably not.
New research released by Juniper states that by 2013 there will be 400 million people using their mobile phones to buy tickets. This makes a lot of sense and seems like a logical next step in the evolution of mobility and Internet transactions. When I worked at Intel, they called the phenomenon “convergence” - that the line between computers and cell phones would gradually blur. Couple this with the fact that people are increasingly willing to purchase online, and voila- the boom of mobile ticketing.
As I have stated before, major roadblocks in the proliferation of this technology are bar code reading issues, lack of reader infrastructure and availability of near field communications (NFC) handsets.
Here’s a link to the full article just in case you’re made of free time, but the salient points are these:
- Mobile will catch on in Travel first, followed by live entertainment and then sports.
- Total gross mobile ticketing transaction value will reach $92 billion by 2013.
- The Far East & China region, together with Western Europe and North America will represent in excess of 80% of this global gross transaction value by 2013.
- Mobile ticketing must “make life easier” for users. In this respect, NFC, with its convenience, is a crucial development.
- NFC will reach its tipping point over the 2011 to 2013 period (meaning that my prediction of 2009 may have been a little aggressive)
What do you think? Would you be comfortable purchasing tickets over your mobile phone?
I started using Twitter about a month ago. For those of you unfamiliar with the service, it is essentially a microblogging tool, where you post updates of 140 characters or less. This guy explains it pretty well:
The updates can be silly, informative, or completely random. I started twittering to connect and network with others sharing similar interests, and hopefully promote TicketBiscuit without being caught. You can check out our twitter feed here.
So, one month in, I am approaching my 40th post, I’m ranked somewhere in the high thirties / low forties on twittergrader, and I feel like I’m getting to know the tool better. Mark Krejci introduced me to several cool twitter tools like twitterfon, twitfire, and twitterfeed which have made my twefforts easier, and I’ve picked up a couple of other tips as well (thanks to whoever suggested tweet later ).
But, there is still room for innovation (of course). Since Twitter exposes an API I am sure that we’ll see several new tools pop up over the next couple of years (at least until the next hot thing comes along). So, all you developers out there, here’s my wish list:
Bitter: Picks up when @replies are getting testy, announces “twitter fight” to the twuniverse, battle ensues for the amusement of all.
Etiquette-r: Detects when you’re using bad twetiquette (I literally can make up these words all day long), suggests corrections. I seriously could use this.
Toggler: Allows you to maintain separate universes of twitter friends and seamlessly toggle between them, displaying your replies and posts only to the group you choose. I guess you could always create two accounts, but then you would have absolutely no free time.
Critter: A twitter for pet enthusiasts. Can’t you just see the joy in terabytes of microblogs about what Fluffy did today?
Sidesplitter: Short jokes. One Liners. Knock Knocks. 140 characters to make me laugh.
Porntwitter: (forgive the 100% un-clever name, it’s in beta) Not really interested in using it so much, but interested in how it would be executed. This, again, is just a matter of time. I mean, there are porn blogs, right?
Who-Gives-A-Shit-Er: Automatically filters out the truly idiotic / repetitive / annoying posts from the twitterverse. I’d probably be the first victim.
It is highly likely that these tools exist as I write this, and if so, please let me know. Do you use twitter? If so, weigh in on what you would or do find useful or amusing.
At least you got off the Death Star in time...
Ticketmaster announced today that is is cutting about 5% of it’s global workforce, mostly from online operations. This should come as no real surprise, as TicketMaster’s growth strategy as of late has been to buy companies (Paciolan, GetMeIn, TicketsNow, etc.) rather than innovate and win new business. While the move probably makes a lot of sense due to elimination of duplicate jobs in the acquired entities, but I think it signals something broader.
Seth Godin blogged a couple days ago about acting small and thinking big. TicketMaster has the opposite problem. They think small and act big. This act, while it will help in the short term, will not help them compete. They ignore customers and enjoy being the 500 pound gorilla.
Well enjoy it while it lasts, TicketMaster. Because we are coming. Every day we are investing in our online ticketing system help our clients sell more tickets, and your clients are noticing.
Ticketmaster never ceases to amaze me. I bought tix to Frank Caliendo’s show in Birmingham and it was cancelled. On Friday, I received this email from Ticketmaster:
Hello, this is Ticketmaster Customer Service with an important alert for your upcoming event. Frank Caliendo, scheduled at BJCC Concert Hall on Friday, October 24, 2008, at 8:00PM, has been cancelled.
Your credit card will automatically be credited the ticket price and convenience charges, and should post to your account within 7 to 10 business days. Please note, the $3.20 per order processing fee and any ticketFast or UPS delivery charges are non-refundable.
If you have any questions, please contact us online at:
http://www.ticketmaster.com/h/asktm.html
Thank you for using Ticketmaster. We appreciate your business!
I love the last line: We appreciate your business! What service did they provide me? In my opinion, they just stole $3.20 from me and provided no service at all. Glad to see I’ll get my money back so quickly as well (note the sarcasm).
I know this isn’t news to many of you and I’m sorry you have to put up with it. There is something you can do about it. Stop going to events where Ticketmaster is the ticketing vendor and encourage your favorite venues, promoters, and artists to sign up with the Biscuit.
We’re back from the Southeastern Museums Conference today. SEMC is an annual event that pulls together museum directors and operators from the region and gives them the opportunity to share best practices and ideas with each other. They were a great crowd, and we had a very successful time introducing the Biscuit to them. A special shout out to Bob, Rachel, and Kimbelee from Sloss Furnaces - it’s always nice to see familiar faces at those events.
Today I read a great post by Shariar Amin on Subliminal Marketing. This got me thinking: isn’t it a bit ironic that we find it okay to splash product placements all over movies but the practice of flashing an image for 1/3000th of a second is outlawed? (By the way, Shariar’s post is not entirely factually accurate - for the full story on subliminal advertising check out snopes)
I remember earlier this year KFC got into hot waterwith one of their commercials promoting a new sandwich. At one point in the commercial a message flashed on the screen that said you could get the sandwich for free if you mentioned a secret code word while you were ordering. The ironic thing is, you would have had to have TiVo or some sort of DVR to rewind and find the hidden message. They did another spot where they hid a dollar bill in the lettuce on a sandwich. Of course, the mere word of mouth made the campaign wildy successful.
Maybe that’s the take away- by trying to be subliminal and getting busted, everyone will talk about your ad, and you’ll get the exposure you crave. We’re always looking for new and cool ways to spread the word about the Biscuit- so what do you think? Should we dabble into the subliminal?
Maybe we should be more subliminal than this....
I’ve gotta admit, I was a big fan of MMA before but since the launch of BattlePass my fandom has gone almost to the nuclear scale. So it was with great anticipation that I awaited this last weekend’s matchup between seasoned veteran Ken Shamrockand Internet phenom Kimbo Slice.
Only the fight didn’t happen. Hours before the fight Shamrock apparently suffered a cut and was not allowed to fight. his last minute replacement was a previously relatively unknown fighter named Seth Petruzelli.
Petruzeilli knocked him out in 14 seconds. Kimbo was supposed to be the best thing for MMA since, well, (forgive the pun here) sliced bread, but he suffered an embarrassing beatdown at the hands of a no-name. And now, there are allegations that the fight was supposed to be fixed. But before I get there, why don’t you watch the fight in it’s entirety? Seriously, it will only take 14 seconds. Go ahead.
Okay so Seth delivers a beatdown. But Seth isn’t used to the limelight. So naturally, when everyone and their mother wants to talk to the guy who beat Kimbo, our boy Seth tells too much:
“They didn’t want me to take him down, let’s just put it that way. It was worth my while to try to stand up and punch with him.”
Ouch. You can read the whole article here if you are interested, but this could be big trouble for ProElite. We’ll keep you posted. One of the great things about MMA is that to this point it has been about combat, performance, preparation, skill. this kind of shenanigan would put a black eye on the sport, but it would be nothing new. I mean, there have been empires (*cough cough WWE*) built on this type of tom-foolery. The BattlePass team will actually get to meet ProElite head of Operations Jeremy Lappen at Fight Promoter University V in November, so I’m anxious to get his take on this whole matter (away from what says to the media).
On a side note, I am now a HUGE fan of Gina Carano. Wowza.
*swoon*
First, let me preface this post. This is not meant to offend, condone, proselytize, or make fun of the gay lifestyle. It is simply hopefully discussion provoking commentary, please treat it as such.
Only because I promised a long long time ago to occasionally write about celebrity news do I mention this. Clay Aiken, in the latest edition of People magazine, has affirmed that yes, he is gay. Now this will come as no shocker to 99.99% of the population over 16 years old, but I can imagine his revelation has broken the heart of many a “clay-mate.”
Why would he do this (this is where I tie this thought to ticketing). Ticket sales for his concerts had been on a downward trend since 2006. He’s recently announced that he’s re-joining Spamalot on Broadway. His career has morphed and his new career will not suffer from this revelation. In fact, it will likely bolster his Broadway fan base significantly. Smart money says his handlers finally gave him the go-ahead for Clay to be Clay.
Ok so Clay was no shock. But I thought this would be a good time to look at five other celebrities who are probably gay, but just not at the point in their careers when they can reveal it yet.
1. Shepard Smith (broadcaster) – The rumor mill was hot a few months ago that Shep is gay, but the most telling evidence is that when asked about his private life in a Playboy magazine article, Shep responded that he doesn’t” talk about those things.” Really? Seems like pretty straightforward question: “Do you prefer males or females?”
2. Britney Spears (singer) – She’s kind of a train wreck but seems to be getting her priorities together as of late. Unlike Lindsay Lohan, who is using who-cares-if-they’re-true rumors of her sexuality to stoke the ashes of her dwindling career, Brit will come out soon and announce that she does, in fact, look forward to a lifetime of “putting a Madonna” on more females.
3. Justin Timberlake and The rest of N Sync (singers, actors) –Come on guys, Lance came out, you can too. Lance Bass came out in a People magazine interview in 2006 and enraged the GLBT community with his use of the term “straight acting gays.”
4. Matthew McConaughey (actor, musician)- Wow, I will catch some flack for this one., but let me present my case. First, he’s not married. Sure, he’s dated the likes of Sandra Bullock, Kate Hudson, and Penelope Cruz. He’s even got a baby with a Brazilian supermodel. I have one word for you : beards. Let’s not forget also Matthew’s much publicized naked bongo party in Austin. What was not publicized as widely is that he was dancing around naked playing the bongos with a dude (Cole Hauser). I have a lot of good friends, I play a mean bongo, and I have a few drinks from time to time, but there has never been a time when I thought the three should mesh into a naked dancefest.
5. Tom Cruise (actor) – So much effort has been put forth into convincing the world that Tom is not gay, we have no choice but to believe otherwise. From the barrage of gay-related lawsuits, to the twisted bizarre marriage to Katie Holmes, the evidence is significant. Ask yourself this: why was it easy to believe Tom was a vampire but it is so hard to believe his marriage is real? Answer: His acting was better in the vampire movie. I have thoughts on why Tom can’t come out, but won’t say them for fear of offending (why start now, right?). I will say that I think it has nothing to do with his career as an actor. And I will leave it at that.
I could go on- there are probably three or four noted country singers, a few pro football and basketball players, and more than one prominent political figure we could add to this list. Who do you think will be next?
People, in general, hate convenience fees. Being in the ticketing business, that’s something we hear on a daily basis. Ticketmaster may not have introduced the concept of a convenience fee but they certainly are the preeminent harbinger of hated fees in most peoples’ minds. So if so many people hate the fees, why not get rid of them? Well, Ticketmaster is now a publicly traded company. Getting rid of fees would destroy their entire business model, and executives would probably spend some time in prison. Not good. Even with the ascendance of Live Nation as a formidable competitor to Ticketmaster, fees will be a part of the equation – we are stuck with them.
The problem with fees arises with the perception that the Internet is free, therefore all strictly internet based transactions should be free. If I can order tickets with MY computer over MY internet connection and print them out with MY ink, what am I paying you fees for?
Okay, so fees are hated. But, can ticket sellers do anything about convenience fees? YES. Savvy ticket sellers will make them transparent. Solutions like ours allow venues, promoters, and artists to roll the fees into the ticket price and appear invisible to the customer. Will customers complain of higher ticket prices? Temporarily, but right now folks are used to paying more for everything – you needn’t look far to find another doom and gloom story about the economy. The risk is that a price bump will impact sales, but you can likely look at past sales data to mitigate that risk. The “no convenience fees” approach can even be an effective marketing tool, since it is so rare. Your web sales will DEFINITELY increase, sales through your more expensive channels (phone, walk up) will decrease, and in the end, you will make more money.
Interested in trying it? Give us a shout and we’ll show you how.
Ah, the secondary market. We primary market innovators honestly get a little chuckle when the industry giants drop the ball like our good friends over at TicketsNow (aka Ticketmaster) did this week.
According to several ticket brokers, TicketsNow was forced by the United States Tennis Association (USTA) to temporarily suspend selling tickets for the event earlier this week after there were complaints from angry fans who did not receive their tickets. The company fixed the problem, but then hastily crafted a new policy that it would not allow same-day ticket sales for the remainder of the tournament and would only allow tickets to be sold 24 hours in advance.
Not a good thing when one of your big clients forces you to stop selling tickets. In other news, the price of NFL football tickets is on the rise. According to a recent study by Team Marketing Report, the average ticket price increased by almost 8 percent to $72.20. The two most expensive teams? The New England Patriots (of course) and the Tampa Bay Buccaneers (wait, what?)
Myself? I am a college football fan. The NFL lacks soul. Discuss.
In these days of 24 hour news channels and information overload courtesy of the world wide web, it’s easy to assume the role of “know-it-all”. And as Gustav roars into the Gulf of Mexico, many of us inject the current common knowledge about hurricanes into our water cooler discussions. For example, we all know-
- Katrina was the most damaging hurricane on record
- Hurricanes lose energy over land, but pick up steam (almost literally) over hot water, and
- Hurricanes make gas prices go up.
BUT- there are many things you DON’T know about hurricanes. For example, did you know that this Gustav is actually the fifth tropical cyclone to share that name? Look it up.
Find out what else you don’t know about hurricanes – check out the quiz hosted by the South Florida Sun-Sentinel. You just might learn something.
Speaking of learning something- we occasionally post ticket selling tips on this blog, like last week’s post on event aggregator sites. We’re interested in your thoughts on these tips. Are they helpful? Do you have tips to share? Let us know.
The new "About Us" page is linked in the upper right hand corner of TicketBiscuit.com.
Hey, it’s kind of a slow news day around here, we’re busy connecting with new clients and developing features to help them sell more tickets and make more money per ticket. I did want to let all of the readers know that we’ve posted a company info page to our TicketBiscuit website - so if you’ve ever wanted to know John’s background, or wondered what our corporate culture is like, you can find it there.
Check it out! Click the links on the left hand side of the page to see the details around each topic.
I love the Olympics. It’s partially the spectacle, partially the competition, but mostly the stories and legends that arise from Olympic competition. Like the one that unfolded last night.
Last night the 4×100 meter relay took place. If you missed it, here is the recap:
- The French team talked “smack” to the American team.
- Through three laps, it looked like the French team would win.
- On the last lap, Jason Lesak pulled off one of the most impressive comeback wins of all time, effectively quieting the Frenchies. Check out the video:
That guy cheering and screaming at the end? That’s Michael Phelps, who, thanks to Lesak’s miracle, is still on track to make Olympic history. Well done, team.
Competition is invigorating, believe me. As TicketBiscuit competes daily with other ticketing providers, I feel like Lesak sometimes. Though it looks like we’re at a disadvantage due to scale or market penentration or some announcement of venture capital infusions, I know that we have the right stuff to win. Our ticketing system is intuitive. Our technology is bulletproof. Our service is unparalleled. And, we have a laser focus on helping our clients sell more tickets and helping them realize more per-ticket profit. Winning won’t happen overnight, but we are catching up daily.
Broadway Brett
John brought a great article to my attention today:
http://www.alleyinsider.com/2008/8/why-ebay-loves-the-brett-favre-trade-ebay-
Since Favre’s earthshaking trade to the Jets, Jet tickets have become THE must have item. The article cites StubHub data that shows over 7000 Jets tickets have moved within the last 24 hours (compared to 36 per week prior to the trade) and the average price has increased from $138 to $252. Probably almost as earthshaking as the Favre trade, though, is realizing that StubHub collects a 25% commission on all tickets sold.
Let me say that again. StubHub collects a 25% commission on all tickets sold - 10% from the buyer, 15% from the seller. Wow.
For yesterday’s action, Peter K (author of the linked article) estimated StubHub’s take to be about $400,000. Now, your venue or organization may not be giving up that kind of coin to the secondary market, but if you are hosting high demand or limited supply events, then you are giving up some.
This is why Dynamic Pricing will be important to the future of the ticketing industry. While no computer algorithm could have foreseen this kind of development (with Favre), we can tell with pretty close accuracy what the optimum price of an event should be. We use historical data from ticket sales, type of artist, geographical area, and venue, then we combine that with real time ticket sales. The result is a price that moves fluidly, approaching market willingness to pay. In short, you get to keep more of that profit being lost to ticket scalpers.
The Favre situation also illustrates a scenario in which the secondary market will still be necessary - if demand for an event suddenly shifts due to new or additional information surfacing after the sale. An analogous scenario is the escalating price of pre-sold tickets (season tickets) to college or pro football games, which increase in value the better that team does through the season. While computers will be able to predict to some extent this uncertainty, they will never do a perfect job due to the human factor involved.
As dynamic pricing becomes the status quo in the future, it will be interesting to see if the secondary market influences after-sale information release for events other than sports in order to preserve its profits.
Tickets for this years summer Olympics in Beijing are arguably the hottest tickets of the year, if not the decade. So it really should surprise no one that fraudsters have jumped in trying to make a quick dime:
Online ticket fraud being fought at Beijing Olympics
Apparently, TicketCity is the culprit, although they are still listing tickets on their website as of this morning. But what about the TicketCity 200% guarantee, you ask? Sorry Charlie, those are only good for events that occur within the US. Hopefully TicketCity will do the right thing, because there is no faster way to sink a secondary ticketing company quicker than selling your customers counterfeit tickets.
Quick Update: I saw this article on the Olympics website about the Chinese government cracking down on ticket scalpers:
http://en.beijing2008.cn/tickets/news/n214485354.shtml
My favorite line:
“Only 26 of the suspects were detained, while the rest were released after they had been fined, warned and “educated,” the report said.”
I love the quotation marks around “educated.”
How much money do you make per customer? If you can’t answer this question, stop what you’re doing and go figure it out. You can’t run your business without this key metric.
There’s a lot of talk these days about the secondary market (ticket reselling). The only reason the secondary market exists is because tickets aren’t price correctly in the primary market. Our industry seems to be the last to adopt modern economic principles surrounding revenue and yield management (I like the term profit management as it doesn’t matter how much money you bring in if you’re not making a profit). The airlines were the first to leverage revenue management back in the early 80’s. They learned to manage perishable inventory (e.g. the revenue from an empty seat can’t be recovered in the future).
So why hasn’t the ticketing industry caught on to this concept? This question has baffled me for many years. The only conclusion I’ve come to is that the supply chain remains disjointed and is filled with mistrust. Unfortunately, the lack of transparency over the years has allowed everyone in the supply chain to take advantage of each other: ticketing vendors charge fans exorbitant fees and lock ticket sellers into long-term contracts; promoters earn additional profit with hidden fees using cost plus contracts; artists require price caps on tickets and then resell their own tickets in the secondary market; venues allow fans without tickets into the venue to earn profit on food and beverages; ticket brokers grab the best seats before real fans have a chance to buy tickets, the stories go on and on…
This is all going to change soon as dynamic pricing becomes commonplace, the primary and secondary markets merge, and tools from companies like TicketBiscuit provide transparency in the marketplace.
What should you do? Understanding your profit per customer metric is the first step. I’m not just talking about ticketing. How much profit (not revenue) do you make on ticketing, food and beverages, merchandise, etc. per customer. With this information, you can then determine how to price tickets, how much to pay for talent, how much marketing you need to do, etc. Don’t let the history of this industry dictate how we approach the future. Just because it’s always been done this way doesn’t mean it will continue to be done the same way in the future. The Times They Are A-Changin’…
Those of you who follow the blog will remember a couple of weeks ago when I cited Marianne Jennings, ticket industry expert and former professor of mine, who, during her keynote at the NATB conference in July, said that Ticketmaster ought to be kicked out of the secondary market. That topic got the most press but it was the broader topic of the presentation that got my attention: The Seven Principles of the Ticketing Industry and What They Mean for its Future.
At the Biscuit, we strive on a daily basis to create innovations to help shape the future of the ticketing industry. We look at the REAL DATA behind ticket sales, and through the identification of trends like increasing percentages of online purchases, or the relative power of purchase suggestion through viral networks, we’re able to innovate and create products to help our clients sell more tickets. So, the insight provided by these principles is very useful to us, as I think it should be for anyone who sells tickets. They address not only the nature of the industry, but also some psychological factors that must influence the way we do business as ticket sellers.
The Seven Principles of the Ticketing Industry (Source: Professor Marianne Jennings and Dr. Stephen Happel):
- Tickets for High-Demand and / or Limited Supply Events are Underpriced
- Underpriced High Demand and /or Low-Price Events Produce Queues
- Time is a cost
- Where There are Nuisances, There are Regulators
- Price Controls Don’t Work
- Allowing Market Participants to Structure Regulation of Their Market Adds Vertical Integration and/or Monopolies to Markets
- Regulation Without Full Information Will Thwart a National Ticket Market
What do these seven principles mean to you, and to the industry as a whole? I’ll share my thoughts on this, as well as the insights provided by Professor Jennings, in future posts. Stay tuned.
As a son of Alabama, and a one time resident of Mobile, I have been anxiously awaiting the local premiere of this movie. In it, a Mobile native takes an in depth look at the parallel cultures in the town where Mardi Gras was born in the US (no, it wasn’t New Orleans). It has won awards at Edinburgh and Sundance, and has attracted a lot of positive critical attention.
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.
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.
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.
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:
-
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.
-
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.
-
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.
-
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.
Live Nation ticketing is, um, “live”
December 26, 2008 in Commentary, ticketing news | Tags: live entertainment, live events, live nation, ticketmaster, ticketng | by ehoush | No comments
Today TicketNews posted a story about the soft rollout of Live Nation Ticketing, signaling that the giant’s move away from Ticketmaster is still on course. Since Ticketmaster has extensive long term contracts in the industry, the move will take time. As one Live Nation insider put it, it won’t be like “flipping a switch.”
So Live Nation enters the event ticketing space. As a competitor of ours, I had to go check out their system. Live Nation partnered with German-based CTS Eventim to develop the interface, and on the surface it is clean and elegant. They even have a java powered seat selector like the one we feature, although ours is a bit easier to use, I think (of course that assertion is free of bias).
The event I checked out was a Temptations concert in New York. On a $66 dollar ticket the fees were over $15. High, sure, but being in New York there are probably facility fees and parking fees rolled into that amount.
Then I went through the purchase process, and was forced to create an account and provide personal info (including phone number?!?!?!) before I could complete the purchase. This is where we start to see the cloak lift, and as the industry moves away from ticketing fees as a primary source of revenue we can see that they have their intentions aimed squarely at advertising.
Look at the event page- There is a prominent Citi Cards ad. The venue is The Capitol One Bank Theater at Westbury. Rest assured after you buy tickets you’re going to get pummeled with direct mail and email from “Live Nation Partners.” The beast feeds the beast.
I’m glad Ticketmaster now has a big name competitor, but I hardly think this is good for the business. The “360” or “all inclusive” deals that Live Nation and Ticketmaster have been making recently are engineered to squeeze every last cent out of the live entertainment marketplace. Exploit the big acts and venues at the expense of the customer. Only play our acts on the radio. Sell your CD in Wal Mart. It will be a semi-profitable bloodbath between the two companies for a while, until the mass public finally realizes they’re being force fed garbage like the Pussycat Dolls and starts to embrace real music again.
Real music won’t be dead. It will be at venues like WorkPlay, or Minglewood Hall, or Exit In. It will be at the local 1200 seat clubs being created passionately by folks who are actually good at it, listened to by folks who appreciate it, and yes, bought by those who value it.
The future of the business looks a bit like the past.