After several conversations, the two companies agreed to merge. DOJ approval did require a few concessions, however. Perhaps the most significant of these was Ticketmaster's obligation to license its ticket-selling software for two years to Live Nation's biggest rival in the promotions game, AEG Live. The idea was that this would give AEG time to develop its own ticketing software.
AEG says it is working on this but so far has little to show, making it unclear how much the DOJ's conditions will actually spur competition. For all its clout, Ticketmaster has two major problems. Most obviously, it gouges ticket buyers. But less talked about is its lack of flexibility. With an old codebase, a huge customer roster, and a long-established way of doing things, Ticketmaster is notoriously slow to innovate. Its new CEO, Nathan Hubbard, points out that his company is starting to add features like interactive seat maps, but even he acknowledges that it "can't turn on a dime like a startup.
Virtually all the new ticketing startups aim to lower service fees to fans. But because this isn't necessarily important to venues—in fact, it may run counter to their interests—the new guys must focus on Ticketmaster's second weakness: its inability to innovate.
And this is just what they are doing—to the delight of people in the industry like Mike Tomon, year-old vice president of sales and service for the Cleveland Cavaliers.
The service is unique in that it allows fans to buy tickets online and transfer them to anybody else via email, even reselling them in an official online marketplace designed to compete with StubHub and eBay. Every time a ticket changes hands, Flash Seats tracks the change and allows Tomon and his sales staff to monitor the pricing.
The information this generates can be useful. When they analyzed last season's Flash Seat numbers, for example, Tomon and his staff learned that fans sitting in rows one through five of the end zones were reselling their tickets for considerably more than those in rows six through The Cavs' response was quick: Increase prices for the first five rows and thus beef up revenue.
Just about every new ticketing business promises such a world beyond Ticketmaster: faster and cleaner Facebook and Twitter marketing and mobile access that allows promoters and club owners to put tickets on sale while they're, say, vacationing in Cozumel. And each has its own angle: Ticketfly's strength is experience—its executives ran TicketWeb , which sold the first-ever ticket on the Internet back in And Topspin Media has the populist appeal: It lets indie artists sell their own tickets.
But Ticketmaster has two distinct advantages over these upstarts. The first is that the company long ago signed many of the biggest venues to long-term deals, making it extremely difficult for others to gain traction. The second is experience: Ticketmaster's system may be old, but it is still rock solid.
Seth Hurwitz found this out the hard way. Hurwitz is an independent concert promoter responsible for booking the Merriweather Post Pavilion in Columbia, Maryland, which competes with the Live Nation-owned Jiffy Lube Live amphitheater about 60 miles away. He's become so concerned about Live Nation's power that he's filed a suit alleging that Live Nation Entertainment constitutes an illegal monopoly in the concert industry the case is pending.
Not surprisingly after the merger, he decided to slip out of his Ticketmaster deal and find a new seat seller. He picked Ticketfly.
The new arrangement worked pretty well for most of the summer. AMC has its own ticketing app, and a Facebook integration, but it still has to pay to process those transactions. Museums sometimes have fees of a dollar or two for buying tickets online, and this makes sense as well. According to the GAO study , while sporting event ticket fees average 20 percent of face value, concerts are even worse, averaging This is somewhat baffling, but we can intuit that Ticketmaster knows just how dedicated fans are to seeing their favorite artists, and how much they can wring out of them in that moment of high-stakes desperation.
In addition to the huge payout, the company was compelled to add disclosures on its website acknowledging that fees are a source of profit. That lawsuit, originally filed in by angry Wilco and Bruce Springsteen fans, paid out anybody who had bought tickets on the Ticketmaster website between October 21, and February 27, Not because they were considered predatorily high, or the product of an old-school monopoly getting away with whatever business practices it likes.
This is not a heartwarming success story. If anything, we should be glad that guy in the audience managed to yell a little bit. Sign up for The Goods newsletter. Our mission has never been more vital than it is in this moment: to empower through understanding.
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By choosing I Accept , you consent to our use of cookies and other tracking technologies. He reclines in a chair, rewriting in a notebook and listening to a colleague on speaker through the BlackBerry resting on his chest.
Hubbard loves it. Some clients are testing a version with photographic views from each spot. Ticketmaster is also installing kiosks in 1, Walmarts and has added the ability to buy tickets on iTunes. A forthcoming Facebook app will pinpoint where your friends are seated. Similarly, a new partnership with Groupon, expected to launch this summer, should help fill unsold seats.
Hubbard ultimately wants Ticketmaster. It would link fans to wherever they need to go, even rival companies — think the Hulu of tickets. No wonder Hubbard hit it off with L. Hubbard wants to expand the definition of a ticket beyond access to a two-hour event, offering exclusive content to tap the anticipation beforehand and the memories afterward.
He sits up and confides that he was blindsided by a blog that morning. He leaves the flashy lifestyle to his bosses, Rapino and Azoff. Hubbard interviewed Azoff at an employee town hall at the Hollywood Palladium in April, encouraging him to share the craziest stories he could muster, to connect his employees to the concert business and not the enterprise-software racket.
A week later, when I catch up with Hubbard again in Los Angeles, the episode appears to have blown over. Last fall, he launched a Ticketmaster blog and immediately took on the elephant in the room. And he has worked to move fees to the first page of a transaction because springing them on customers at the end is wrong. The reward for his candor? The case was settled in January. Because Irving [Azoff] took all the money for his acts. Instead of the venue paying Ticketron to sell and distribute tickets, Ticketmaster paid the venue for exclusive rights to handle all the tickets.
That irresistible deal won Ticketmaster clients and helped it build an unbeatable infrastructure that could handle the initial crush when tickets go on sale. Hubbard holds his tongue and waits. Maybe Bono had it right when he told Rapino that he should rename Ticketmaster.
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