Today’s News: The Plot To Overthrow Ticketmaster

The ticketing industry is widely fragmented: Ticketmaster sells more than 130 million tickets a year, while numerous small companies compete for the rest of the live-event pie.  The most recent issue of Wired has a fantastic piece on the subject.  Its point: the ticketing industry is wide open for a new competitor that goes after Ticketmaster’s biggest weaknesses.  Wired reports:

“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.”

For better or worse, Ticketmaster is the standard against which all other ticketing companies are judged.  As a result, new competitors have turned to social media integration, lower fees, and powerful analytics in order to differentiate themselves.  While Ticketmaster has a huge database of customer names (and the bands they’ve seen), the company’s sheer size makes it nearly impossible to use that data in a meaningful way.  When event promoters and artist management can apply that sort of demographic modeling, they are able to implement more effective marketing strategies that reach out to fans directly. (In related news, Chicago’s Jam Productions is suing Ticketmaster to be released from its pre-merger contract over concerns that rival promoter Live Nation could access confidential business information through Ticketmaster and use it against them.)

The fact of the matter is, Ticketmaster protects its bottom line by working for the venues, not the fans.  Fred Rosen, who ran the company from 1982 to 1998, used this realization to grow the company into the juggernaut it is today by thouroughly undercutting its main competitor, Ticketron.  Here’s how:

FanFueled in the Press: The Ticket Service That Pays You Back

The word is out about FanFueled, and people are taking notice.  The Chicago Reader’s Miles Rayner spoke last week with FanFueled CEO and founder Anderson Bell about FanFueled’s vision for an evolved, socially-driven approach to the ticketing industry.  The article came out today – give it a read here. Here’s an excerpt:

FanFueled determines its fees according to a transparent system: $1.49 for tickets under $25, $2.49 for tickets more than $25 but less than $100, and so on up to a maximum of $4.49 for tickets that cost more than $200. (The service is free to organizers of free ticketed events.) If you’ve bought a ticket lately through Ticketmaster or any of its affiliates, like Live Nation or TicketWeb, the first thing that will strike you about these numbers is that they’re small. Ticketmaster tacks a $12.15 service fee onto a $149.50 Sade ticket, for instance; FanFueled would charge $3.49. Tickets to Atreyu’s House of Blues date next week have a face value of $23, but Live Nation adds a $2 facility charge and a $9.05 convenience fee—which compares pretty unfavorably with the $1.49 FanFueled would charge.

Rayner’s comparison is clear: for music fans on a budget (and who isn’t these days?), the extreme service fees that the established ticketing giants charge can be a dealbreaker.  And even if you’re willing to shell out, that extra money is cash you’re not going to spend on a CD or t-shirt at the show, depriving the bands of a serious chunk of their revenue. (According to a 2004 Rolling Stone article, merchandise sales are the biggest income source for bands both large and small.)  The FanFueled model is good for everyone – well, except for Ticketmaster.  It saves the fans money, it decreases the cost of marketing and promoting shows for event organizers, and it puts a bigger share of the wealth in the hands of artists.

Today’s News: Dan Black, Weekend Events, Ticketmaster lawsuit update and more

There’s a lot going on today before the weekend comes, so here in brief are some news stories we’re following today, and a couple of events going on this weekend that are worth checking out.   Stop back on Monday for some social media strategy tips on how your event can stand out using FanFueled.

• Tickets for the next show in the FanFueled fall concert series are going fast, with VIP wristbands already sold out.  It’s Dan Black at Lasalle Power Co, and it’s going to be a great night.  His debut solo album just dropped to rave reviews, and after seeing him this weekend at Austin City Limits, we’re huge fans of his unconventional brand of quirky and credible pop as well as Milwaukee-based DJ duo The Glamour, who are opening the show.  The show is Thursday Oct 21 – get your tickets and start sharing, only at FanFueled.com.  If you’re not convinced yet by the music and the rewards, here’s a video for “Symphonies” that earned two VMA nominations from MTV:
• What’s up for this weekend: There’s a lot of great stuff going on, and while we don’t have MLB playoff tickets to offer, check out FanFueled.com to get tickets to these hot events.  Tonight, Chicago Fashion Week kicks off with a sneak peek at Grossinger City Autoplex, followed by two big afterparties at The Pitch and Crescendo.  It’s $40 at the door, but you can save big (and earn commissions by referring your friends) by getting your ticket from FanFueled for only $20.  On Sunday, check out the SongCircle October Showcase at Schubas, where six amazing songwriters share the stage.  You can check out who’s playing and get tickets here.
• Class action suit against Ticketmaster proceeds (from Ticketnews) The legal team working on the federal class action lawsuit over Ticketmaster’s misleading and deceptive fees has launched a Web site, Ticket Fee Litigation, to notify people of the suit.  Since every U.S. resident who bought a ticket  from ticketmaster.com between October 21, 1999 and May 31, 2010 is eligible to join the class action, we’re talking millions of people.  The full details of the lawsuit are here, and we’re going to be following this one closely as a federal court in L.A. (hopefully) holds Ticketmaster accountable for their shady business practices.

Today’s News: Ticketmaster Customers, Fed Up with Fees, File Class-Action Lawsuit

The fans have had enough.  A lawsuit over misleading ticket delivery fees on the Ticketmaster Web site was granted national class action status last week by a Los Angeles judge, paving the way for millions of customers across the country to collect damages should the ticketing giant lose its case.

Peter LoRe of New York and Curt Schlesinger of Illinois filed suit in L.A. (where Live Nation is based), alleging that Ticketmaster misled them into believing that the company’s “Order Processing Charge” and “UPS Delivery Charge” were based on the actual cost of providing the tickets, rather than just generating profits.  The fees, which range from $14.50 to $25 per ticket, are not charged when ordering delivery by regular mail.

Judge Kathryn Doi Todd wrote in her decision on behalf of the state’s Second Appellant District, which was not published in the case’s official reports:

Today’s News: Amphitheaters in Trouble

This week’s Rolling Stone reports that large outdoor venues are having an awful summer.  It’s not the god-awful heat (here in Chicago, the heat index is over 100 degrees yet again), or the pigeons that crapped all over the the Kings of Leon at the Verizon Wireless Amphitheater in St. Louis on July 23rd.  The problem? It’s the economy, stupid, experts say.  Of course people facing unemployment and struggling to make ends meet aren’t going to be spending as much to go see shows.  But there’s more than just the general economic malaise crippling major tours such as Lilith Fair, the Jonas Brothers, and Rihanna.  The major concert promoters, Live Nation and AEG Live, have been alienating fans with high ticket prices and excessive fees.

“As overall ticket sales have decreased 10 percent so far this year, Pollstar reports sheds in particular have suffered a ‘huge drop-off.’ ‘It’s just the way [promoters] operate that kills the sheds,’ says Doc McGhee, manager of Guns n’Roses and Kiss. ‘There’s a tremendous backlash this year.’

A lot of it is simple economics: Live Nation, the world’s largest promoter, owns or controls 40 of the nation’s amphitheaters.  Saddled with these properties – which each hold around 20,000 fans – the company needs to book enough summer tours to keep them open during the short season they’re open and often ends up overpaying in bidding wars with competitors like AEG Live, which specializes in arena shows.  That leads to ever-higher ticket prices, which are a tough sell in a down economy.

And because top artists often receive the vast majority of ticket revenue, Live Nation makes much of its money nickel-and-diming fans for ancillary revenues – $44 million annually from parking and $223 million from food and beverages.  Last year, two fans at PNC Bank Arts Center in Holmdel, N.J., filed a class-action lawsuit against LiveNation because they were charged a $6-per-ticket parking fee whether they intended to park or not. (Live Nation filed a motion to dismiss the suit, but a judge denied it in June).”

The dirty secret here is that everyone knows what’s going on, but nobody is doing anything about it.  Artists are stuck working in a broken system, and fans don’t have an alternative if they want to see their favorite acts.  “I don’t think the amphitheater thing is dead, it just needs a price correction – they need to make it user-friendly,” according to Bert Holman, manager of the Allman Brothers Band and no stranger to the amphitheater circuit.  “They’re gouging everything – the food is high, the parking is high.”  John Scher, co-manager of Simon and Garfunkel, has a similar take in the article: “The original concept of the lawn being a place that was casual just became very expensive, unaccomodating, and just uncomfortable.”

Today’s News: Ticket Prices Deter 72 Percent of Concertgoers

According to a Billboard.com poll released this week, price is the main deterrent for fans for live concerts.  They haven’t released full results from the online survey, which had 642 respondents from July 19-26.  This shouldn’t be a shock to most people: especially as the recession has stretched budgets, rising fees and surcharges have made live music prohibitively expensive for many people.

Other reasons for skipping a favorite band’s live show included not knowing about the event (15 percent), poor choice of venue (9 percent), or having recently seen the artist in concert (4 percent).

Similarly, a poll by Rasmussen Reports in late July found that 67 percent of adults who attend at least one professional music concert a year think tickets in general are too expensive.  Women are more likely than men to feel priced out of concert tickets, with 73 percent of female concertgoers saying tickets are too expensive, compared to 60 percent of men.  However, men are more likely than women not to attend concerts at least once a year.  Those in their 30s are the most critical of concert ticket prices than any other age group, even though they’re the most likely to attend rock or pop shows.  The nationwide telephone poll of 1,000 adults was conducted in February, and a follow-up poll of 5,000 adults found that concertgoers were even more price-sensitive, with 70 percent saying concert tickets were too pricey for them to attend shows.  The result: tours are struggling, and most adults (62 percent) have not attended a concert in the past year.

According to Pollstar’s mid-year report (PDF), the average face-value ticket price for the first 6 months of 2010 for the Top 100 national acts was $60.77, down 6 percent from last year’s record average of $64.61.  These prices don’t include “convenience fees,” which for some shows can be more than half the face value of the ticket.

Whose fault is this?  Well, 42 percent say performers most influence the price of concert tickets.  Twenty-one percent think the venue is to blame, and 17 percent blame the ticketing service.

This is a lot of data, and it all all points at the same thing: something needs to change in the live music industry. The fans are being priced out of their favorite shows, and while the biggest acts are still able to pack arenas, a lot of mid-tier concerts are struggling.  FanFueled aims to change that — keep checking back here, and on our Facebook and Twitter, in the next month for more info and exclusive pre-launch offers.

Brand or Band?

This is from back in April, but I saw this article on the Wall Street Journal site today and found it so interesting that I had to write something about it. Here’s the story:

Basically, it’s a profile of the Black Eyed Peas, the band that holds the most downloaded song of all time on iTunes (as well as third place on the same list).  Here are some highlights:

For the musician, wooing potential corporate partners has become as integral to his job as the DJ sets he does on tour at after-parties sponsored by Bacardi. Often will.i.am pitches the concepts himself using “decks” that sum up the Peas’ package, frequently in PowerPoint form.

“I consider us a brand. A brand always has stylized decks, from colors to fonts. Here’s our demographic. Here’s the reach. Here’s the potential. Here’s how the consumer will benefit from the collaboration.”

If will.i.am wasn’t in music, “He’d be the best ad executive on Madison Avenue,” says Randy Phillips, president and CEO of the concert promoter AEG Live. “I’ve never seen anyone more astute at dealing with sponsors’ and companies’ needs and understanding their brands.” He says he’s planning to have the rapper deliver a seminar to AEG’s global marketing team.

They’re a brand, and they know it.  In the past, this would make them seem to be sellouts, diluting the intimate musical relationship between bands and their fans to make a quick buck.  Not so today, the Journal says:

Once, when pop music was synonymous with rebellion, a band getting into bed with a large corporation was as improbable as a Brooks Brothers suit at Woodstock. For companies, too risky; for fans, a betrayal.

This changed when advertisers began to leverage elements of the counterculture, which was no longer threatening. First they targeted baby boomers, from the Rolling Stones’ “Start Me Up” for Microsoft to John Mellencamp’s Chevy commercial. Cries of “sellout” diminished. As CD sales and the marketing surrounding it began to fall into a bottomless pit, younger bands rushed to find other sources of income and publicity. The Peas were among the fastest learners of the industry’s new math.”

Finally:

Last fall, the [Blackberry manufacturer Research in Motion] struck a marketing deal with will.i.am’s Dipdive site, but was reluctant to sponsor a tour, according to Peas co-manager Mr. Derella. He says the band eventually scored the sponsorship in large part by presenting ideas such as the nightly freestyle rap, [where fans use Blackberry Messaging to send messages to the band, which scroll across the stage while will.i.am riffs on them, freestyle] and a moment when will.i.am works variations of the company’s tag line, “Love what you do,” into a seemingly spontaneous monologue during one of the show’s closing numbers, “Where Is the Love.” Such gambits allowed the Peas to get away without putting any BlackBerry banners on the stage.

Of course few of these deals would have come about if the Peas didn’t have a flow of accessible hits to support them. The recent single “I Gotta Feeling,” with its refrain “tonight’s gonna be a good night,” has already become a staple of wedding DJs, sports stadiums and YouTube videos. “I’d pay any amount of money for that song,” says Marty Bandier, chairman and CEO of music publishing company Sony/ATV. An especially nice touch, Mr. Bandier says: the line “Fill up my cup, mazel tov,” which makes the song an instant anthem for bar and bat mitzvahs.

Now, I used to hate the Black Eyed Peas, for exactly this reason.  The “Bar Mitzvah Song” seems on first listen (or twentieth, since it’s on the Top 40 stations at least once an hour), to be a mindless 4-minute blend of disco-karaoke-Journey, and it is.  It’s also a hugely successful song, the pinnacle of pop in today’s diluted, unoriginal music scene. As much as their music is formulaic and unimaginative, their creative genius shows through in their success.  It’s even harder selling a bad product than a good one, and the Black Eyed Peas are the best.  So, instead of hating them, respect them for what they’re doing, lament the people who are dumb enough to fall for it, and then go listen to something better. (Like the new Major Lazer album, which is awesome.  Download it for free here.)

Today’s News: Teens using music to get high?

According to news reports, kids around the country are listening to mp3s that serve as “digital drugs,” getting you high through your headphones.  Instead of getting high and listening to trippy music (isn’t that how everyone starts listening to Pink Floyd?), playing these tracks is supposed to give users a buzz and alter your mood.

The phenomenon is known as i-dosing, and schools, parents and officials are taking it as a serious threat. According to the video above, they’re concerned that this is the newest gateway drug, leading kids to experiment with real narcotics.  Tracks such as “Gates of Hades” are supposed to offer the same effects as weed, ecstasy and opium, and peyote, available for $16.95/four “doses” online.

Wow, America.  Really?  I’m a big fan of Meghan Edwards, the high school student who says “I heard it’s like, some weird, like, demons or stuff through an iPod or something, he was just freaking out.”  The news team couldn’t apparently find anyone who had actually tried this, instead casting i-dosing as the latest something that “parents really need to be concerned about.”  Oklahoma’s Mustang Public School district, featured in the Channel 9 report above, has banned iPods in the schools for fear of its students becoming cyberdrug fiends.

This might be the only “drug” ever to advertise on its own Web site, even recruiting people to peddle the dangerous sound waves. (“Earn BIG MONEY selling i-Doser Digital Drugs with our DEALER PROGRAM,” screams the home page of i-doser.com, which claims to be “the industry leader in binaural brainwave audio doses to powerfully alter your mood.”) Here at FanFueled, we tried “i-dosing” in the office, and ended up only getting powerful headaches from the droning tracks, which are reminiscent of the all-time worst minimalist composers’ efforts.  Chalk one up for moral panic, and count this as another blow against common sense, responsible parenting, and the state of today’s youth.

Today’s News: Live Nation stock takes a hit on ticket sale challenges

At an investor and analysis meeting held on July 15, LiveNation reported a 12 percent decline in ticket sales for the first half of 2010, and forecast lower revenue figures for the rest of the year. TicketNews cites a report “available on Live Nation’s investor relations Web site” that predicts sales to fall another 15 percent in the second half. However, the report is no longer available on the site, with the link replaced by a message saying “To receive a copy of the written materials provided in connection with Live Nation Entertainment’s 2010 Investor and Analyst Day, please e-mail your request to traciphan@livenation.com.”

Guess they got scared after their stock price fell nearly $3, more than 25 percent of Thursday’s opening price, since then. Live Nation CEO Michael Rapino said the massive sell-off began even before his presentation ended, the AP reported. “We had a real buzz kill at about Slide 9 when I saw the e-mails go out,” he said.

The stock’s slide has stabilized for now (shares are trading around $8.90 today), but this spells trouble for the giant media conglomerate. With key artists such as Rihanna and the Eagles canceling shows, and U2 postponing its North American tour, the pressure is on for Live Nation.

Fed up? Reddit takes on Ticketmaster

Earlier this week, Reddit users started a grassroots campaign to try and convince Google to create a ticketing alternative to Ticketmaster. Basically, they’ve had enough of the poor customer service, exorbitant “convenience” fees, and disingenuous resales from Ticketmaster, and harnessed the power of social media to make themselves heard. The plan was simple: by searching the keyword “G-Ticket Google’s Alternative to Ticketmaster” over and over, they’re trying to send a signal to Google to give them an alternative ticketing solution.

The stunt quickly gained attention (one tech blog in the Philippines didn’t get the joke, and ran a story titled “Google is set for a new plan: G Ticket to take on Ticketmaster”), drawing notice on Billboard and throughout the blogosphere. By Friday morning, the phrase was the No. 11 most searched keyword on Google.

A lot of the Reddit commenters pointed out that there are some hiccups in the plan, namely the long-term contracts that Ticketmaster has with major artists and venues. Still, the huge popularity of this groundswell campaign shows that people are done putting up with the giant monopoly in ticket sales. Google may be monopolizing the Internet, but I’d rather have a company who’s motto is “Do No Evil” selling concert tickets than one that charges an extra $2.50 to print my own tickets, using my own ink and paper.