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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.
This is the second article in a series where we pick the brains of live entertainment promoters to discover their tips and techniques for staying successful amidst worsening economic times. If you’ve got some good tips you’re willing to share, please email Eric Housh or DM @ticketbiscuit.
Sequoia Slentz is an independent promoter that does events all over the country through his company CleanBox Entertainment. He is the booking agent for the “Killer’s of Comedy” which features comedians from the Howard Stern show. Sequoia also books all of the West Coast Shows for “The Fab Faux,” a Beatles tribute band featuring Will Lee from David Letterman’s show and Jimmy Vivino from Conan O’Brien’s.
I caught up with Sequoia the first time on January 20th, four days before the scheduled Fab Faux show at the Orpheum in Los Angeles. “At this point last year, I had sold this show out- 1400 tickets – without spending a dime on advertising,” he told me, continuing, “this year, I’ve done it all – radio, mailers, you name it, but to no effect.” Four days left until show time, and Sequoia had almost half of the house left to sell.
This tale is all too common lately- promoters struggle to sell tickets in the face of an economy that has forced people to eliminate line items from their budgets. Line items that are typically seen as discretionary, such as concert tickets, are often the first things to go.
The next time I talked to Sequoia was last Thursday, January 29. The Fab Faux show did not sell out, but he did move enough tickets to make money. I asked him to share his secrets for success.
Negotiate, Negotiate, Negotiate!
The thing about the economy is that it impacts almost everyone, and that includes venues, radio stations, hotels, and many other businesses. This opens up incredible opportunities. “The idea is to spread the deficit around. Radio stations need to sell ads. Hotels need to fill rooms. Venues need shows. We all need each other, we gotta help each other out,” Sequoia states. He advises to negotiate with the venues for discounted rates, and with radio stations for discounted air time or ticket giveaways. “Radio stations have an incredible amount of inventory, and they’re willing to deal to sell them all.”
Working with Hotels was effective for Sequoia as well. As part of his effort to increase sales, Sequoia struck a deal with the Kyoto Grand Hotel to offer discounted tickets to hotel visitors. After the deal was sealed, he was approached by four other hotels wanting to ink similar partnerships. “If these guys have empty rooms, they’re losing money – so again, you can help each other out.” He says to also negotiate for inclusion in email blasts sent from the hotel, venue, or radio stations to their respective customer or fan lists. “It’s free and easy – most of the time they will be glad to.”
Being creative also helps. For this last show, Sequoia approached a Professor of the Music Institute and convinced the professor to give his class extra credit for attending the show and writing a paper on it.
Use the Tech Tools
Sequoia uses email marketing religiously. “I’ll use it to communicate with my lists, and I used promo codes to give folks the opportunity to buy tickets at a discount price.” While promo codes are a very effective way of generating sales and tracking marketing effectiveness, Sequoia cautions against the “double pitch.” “If I send an email out on the on-sale date, and someone buys a ticket at full price, then I send that person another email closer to the date announcing half price tickets, one of two things will happen. Either they will become trained to wait for the discount, or worse, they will get mad and not buy any more tickets at all. Both are bad, obviously.”
He says the way to avoid the double pitch is through careful customer management or third party surplus ticket sellers. “I used a surplus seller for this show and it ended up putting an additional $3k in my pocket at the very last minute. I was very happy with it.” Surplus sellers have opt-in databases of people who agree to be notified when discount tickets become available, so the dangers of discounting are mitigated.
Pay attention to the details
“The littlest mistakes can kill your operation. In 2008, I put the tickets for the Fab Faux show on sale in early October, and the show sold out without me spending a dime in advertising. This year, I put them on sale a month later- in November.” While this may sound harmless to the lay person, Sequoia says it was probably a key factor in the slow sales. “Sure, all of the bad economic news was weighing on people’s minds, but also, in November people are thinking about Thanksgiving, and Christmas, and travel, and mentally budgeting. The entire frame of mind changes.” He advises that promoters pay close attention to on-sale dates and times, and the trends of how the tickets move. “I’ve already put the tickets for the October 2009 Show on sale,” he added.
Stick it out
Business will continue to be tough for promoters, with recent estimates saying that the economic recession will last well into 2010. But while the business is admittedly tougher, Sequoia says it’s actually good for his operation. “We’re learning a lot and having to become better and more creative. Not all promoters will come out of this, but if you can stick it out, you will be positioned securely.”
Dear musicians, promoters, managers, artists, and especially fans:
Tonight I read this breaking news on the Wall Street Journal Online:
Ticketmaster Entertainment Inc. and Live Nation Inc. are close to a merger, people familiar with the matter said, in a deal that would consolidate two of the most powerful forces in the music industry under one roof.
The newly created company would be called Live Nation Ticketmaster, and would combine the world’s biggest concert promoter with the world’s dominant ticketing and artist-management company.
Recent shady and allegedly crooked activity on the part of TicketMaster through their subsidiary TicketsNow just further reinforces the inkling that many live entertainment fans have had for a couple of decades: this company seems to care little if at all for the fans. And how much of those ridiculous fees are they sharing with you, promoters? Artists?
As for Live Nation, there was a glint of hope as they released their ticketing platform earlier this year. Then there was the Phish incident, along with those damn familiar and ludicrously high fees, which served as the one two punch of reality, letting us know that superpowers in this industry have all of their own interests aligned, and they are not with us.
The good news is, there are companies out there founded by, staffed by, and driven by live entertainment fanatics who appreciate the entire experience. This new generation of entrepreneurs is unbridled by the old way of doing business, unencumbered by overhead, and as disenfranchised and tired of the superpowers as you are. So to the musicians, venues, and promoters, here is our plea to you:
Say NO to MasterNation. Don’t buy it. get out, do research on other ticketing providers. Check us out, of course. But don’t stop there. Check out Capterra for a directory, or Google. I guarantee you’ll be surprised. Innovations like social media ticketing, viral marketing tools, and mobile ticketing are all within your reach. And ticket fees? We let YOU control them. Hell, you don’t even have to charge service fees if you don’t want to.
Visit http://www.ticketbiscuit.com, Call 866.757.8330 or email info@ticketbiscuit.com. Say NO to MasterNation and YES to the future of live entertainment.
To the fans, please realize the importance of activism here. Encourage your favorite venue, promoters, and artists to say no to MasterNation.
Stay tuned for more updates.
Attention, executives of Sony, EMI, Universal, and Warner: please get a clue. When a fan incorporates music that you own into an online video, it means that they like it enough to add their own creative flair to it and spread it among their social networks.
Why do you discourage that? Because you don’t get a penny for everytime someone buys the song? And YouTube, for goodness sakes, could you guys not have seen this one coming?
I read this article just now about how the big four are now re-negotiating their contracts with YouTube and as a result, videos are being pulled from the site. While I can put on my “old-timey” glasses and see why they would have such a knee jerk reaction (lawyers gotta eat too, by the way), the common sense part of me is screaming WTF?!?!?!
You WANT fans. You NEED fans. Instead of discouraging the creative engagement with your product, you should embrace it and use it. Consider the case of Guitar Hero. When the original concept for Guitar Hero was being developed, the game developer struggled to get the labels to come onboard. This is what the music labels do: reject new things. Napster, anyone? But when GH 3 was released in 2007, most of the tracks saw a dramatic increase in digital sales almost immediately. I have all of the Guitar Hero games, and I own almost all of the tracks as well. Now, the labels are pining to be in on future releases. Why did sales take off? Because while gamers were rocking out in front of their TVs trying to get five stars on Reptilia, they were actually hearing the song enough to love it. Most of them had never heard it before the game was released. Takeaway: when new people hear your music, it is a good thing. These people can easily become fans and will want to buy music.
So here is my plea to the music labels: give us change. Give us leaders that are unafraid to share content and encourage fans to experiment with it. Make your artists tracks available for download on Guitar Hero and Rock Band. Quit trying to get paid every time a song is played, and instead invest in artists and technology that can connect with fans and connect fans. As for YouTube, my answer is simple. Require that fans cite the source for music that is used, but do not prevent the usage of your music. You can even work with YouTube to add links to buy the tracks on iTunes. After that, have contests, promotions, giveaways – invite fans to make their own music video for some of your new acts. Create a YouTube channel and pump it through your website. Feed it to your Facebook Group. Tweet if you dare. Just get involved and get present, and listen to your fans.
In the future of the music biz, labels will find and refine talent, promoters will bring the talent to the stage, and software developers (Activision, Red Octane) and online distribution channels (iTunes, Pandora)will bridge the final interface gap with the mass public. CDs will go away. Radio will be marginalized. Fans will find and interact with music on their turf and on their terms, empowered by broadband and inspired by their social circles. This is the future, like it or not.
So quit fighting the inevitable, or else your labels and the arcane business practices you so vehemently protect will go the way of the Big 3 automakers.
But the public won’t bail you out.
Next Up- Convenience Fees for Airlines?
March 3, 2009 in Commentary, Musings, ticketing news, Uncategorized | Tags: airlines, convenience fees, paradigm shift, self service, spirit, ticketing, ticketmaster | by ehoush | Leave a comment
A colleague forwarded me this article today – apparently Spirit Airline is considering making customers pay for the privilege of booking tickets anywhere other than their ticket counters in airports.
http://online.wsj.com/article/SB123604492886515417.html
Wow. Spirit must have some Ticketmaster folks on its board.
This is effing hilarious, and a good example of why the air travel industry is in such dire straits. I assume that Spirit Airlines either has paid up front costs for their reservation system or pays an annual licensing fee, but I doubt the cost ties directly to usage volume. I further suppose that the costs incurred by having ticket counter agents and space at airports exceeds the costs of the online reservation system.
So the airline is, in effect, penalizing consumers for utilizing a more efficient means of transaction. WTF? I can follow (but not necessarily agree with) the thinking behind charging fees for checked baggage or in flight refreshments. These things drive up costs. But not online booking.
What if other industries followed suit? Fees for online banking? For booking hotels online? For using the drive thru at restaurants? For pumping your own gas?
The parallels to live entertainment are obvious. I have often wondered why so few promoters and venues choose to flip the common fee arrangement on its head. That is, charge fees for a box office (ticket counter) sale but offer incentives (no fees) to purchase online. We have a couple of clients who do business this way, and their online sales represent over 90% of their total ticket sales. Self Service is more efficient.
If customers and computers are doing the work, it frees up your resources to grow the business. Our system is one of the few ticketing systems out there with the flexibility to allow venues and promoters to set the fee structure that their customers see (completely independent of the per ticket fees we charge for providing ticketing services). In essence, it empowers businesses to encourage the self service option.
It’s time for more businesses to embrace a shifting paradigm. Encourage the efficient transaction and grow your business the right way, instead of taking the easy route and squeezing your customers who self serve.
Oh, and Spirit, if you guys want to REALLY grow revenues, you should try an online check-in fee, a boarding fee, or even a “seat bottom cushion flotation device” fee.
Geez.
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