Ticketmaster Reforms Token and Tardy

LiveNation said it plans on fixing merger partner Ticketmaster, but initial efforts elicit boos

Concert ticket buyers in the Bay Area and beyond can expect little relief from Ticketmaster‘s latest efforts to fix its widely panned service in the near future. The massive international ticketing company has announced it’s waving its galling service fees on 10 percent of its shows, as well as rolling out features like “all-in” pricing and the ability to return tickets or get full refunds on canceled shows. They’re token efforts at best, watchers say, but still, no major competitor is predicted to take on and crush the ticketing oligarch anytime soon.

The largest US concert promoter and venue operator, LiveNation, merged with Ticketmaster this year, and in May promised changes to the service, which millions use to buy tickets over the phone, online, and in-person. LiveNation.com‘s Noah Maffitt said using Ticketmaster was about as fun as online banking, and service fees — which can hit $27 per ticket — were driving customers away. Ticketmaster’s technology does not warrant the hegemony it possesses over the ticket market, where it did $6.5 billion in sales in 2009. LiveNation is on a mission to update it, but the efforts so far have been lackluster.

Responding to the economic downturn which has hammered sales, LiveNation said it expects to cut services fees on 10 percent of tickets sold in 2010, up from 6 percent in 2009. Still, the average ticket price will go up in 2010 to $49.74 from $48.12 in 2009. LiveNation-Ticketmaster declined to comment on the record for this story, but it has publicly blamed artists for the high cost of tickets. Executive chairman Irving Azoff told investors that artists have adjusted their expectations. “There are no artists who don’t want to charge less for tickets,” he said during a public shareholders conference call in July.

In addition to cutting certain fees for certain shows, LiveNation-Ticketmaster has touted a new feature this fall called “all-in” pricing, which tells customers the final cost of the ticket up-front, instead of waiting to tack on the service fees at the end of the purchase.

“We get it — you don’t like service fees,” Ticketmaster wrote on its new blog Ticketology when it announced “all-in” pricing. But “all-in” pricing is not universal, and both venues and artists have issues with it.

Services fees result from negotiations between the artist, the promoter, the venue, and the ticketing service. San Francisco competitor Ticketfly‘s vice president Dan Teree says some artists don’t want to seem greedy, so they like to break out the ticket cost from the fees.

“If a fan buys a $50 ticket one year, and then a $60 all-in ticket the next year, they go, ‘Hey,'” said Teree. “Then the band’s brand takes a hit.”

Local promoter Gregg Perloff, head of Another Planet Entertainment — which books the Fox Theater in Oakland and the Greek Theatre at UC Berkeley — said all-in ticketing can hide discounts. The Fox, for example, offers no-fee purchases at its box office, but an all-in ticket online won’t tell customers that. Ever since LiveNation bought Ticketmaster, the company has become less responsive to Another Planet’s needs, Perloff says.

LiveNation-Ticketmaster also has announced full refunds to customers if a band cancels. Teree, who is also a former Ticketmaster employee, confirmed that up to this point, fans could buy a ticket at Ticketmaster, the band could cancel, and they wouldn’t get their money back.

“Ticketmaster often held on to the per-order fee in the event of a cancellation,” said Teree. “Ticketfly will refund everything. It’s the cost of doing business. We’ll eat it. The client eats it.”

The company shouldn’t be applauded for offering refunds, Perloff says. “That’s the kind of thing where you go, ‘Hello, you want credit for doing something that’s ethically right?'”

Ticketmaster has also recently announced that tickets for certain shows will come with a three-day return policy for customers who get “cold feet.” Teree says that’s not a feature, that’s just another business decision driven by LiveNation, and competitors already offer that.

All of these token efforts might be underwhelming, but don’t expect a major competitor to take them on and win in the foreseeable future, says ticketing analyst David Joyce at Miller Tabak in New York. He has a “buy” on LiveNation stock, even though the company’s revenues have dropped about 10 percent this year. Ticketmaster has ticketing contracts with 11,000 venues, and venues renew these one- or two-year contracts at a rate of about 97 percent, he says.

Even Perloff says Ticketmaster can’t be beat when it comes to servicing huge shows like Paul McCartney at the Oracle Arena — the kind of situation in which 200,000 people call the service at once. Competitors with better service are much more likely to take marketshare away in medium and small venues. Which explains how Ticketfly grabbed clients like Bimbo’s 365 Club and Brooklyn Bowl.

While LiveNation-Ticketmaster focuses on expanding into dozens more countries, companies like Ticketfly are making every mobile phone a ticketing booth and driving sales through Facebook, Twitter, and venue web sites, Teree says.

TicketFly just bought Gigbot, a tech company that helps people learn about shows. Ticketfly has branded club apps for mobile phones, and they play nice with all the social networks so folks know when and where their friends are going. Meanwhile, LiveNation has added a shopping cart to its web site.

“Trying to drive traffic to the LiveNation web site is self-serving and it’s fool-hardy,” Teree said. “We’re saying, ‘Meet fans where they are.’ And they’re on Facebook. They’re on Twitter and they’re on mobile phones.”

Still, Ticketfly serves just fifty venues and has been selling tickets for just eighteen months. Ticketmaster has built up a lot of inertia over decades of business and it will take a long time to stop them.

“They’ve been at it a long time,” Teree said. “Some people are afraid to change. I think that venues are still stuck in one or two more years on their contract, so that’s probably the biggest thing. Those are falling away and Ticketfly is getting a lot of that business.”


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