All-In Ticketing: Why Can't We Do The Math?
(Moderator) Bob Lefsetz | The Lefsetz Letter
Jim McCue | ArenaNetwork
Peter Luukko | Comcast-Spectacor
John Meglen | AEG Live / Concerts West
Brent Smith | William Morris Endeavor Ent.
Dan Weiner | Paradigm
The answer to “Why can’t we do the math?” was never fully answered, but a different question that arose from this panel could have been: “Why won’t we do the math?”
The panel got off to a lively start when moderator and industry gadfly Bob Lefsetz announced the one person he most wanted to hear from – Live Nation’s Nathan Hubbard – was a no-show. And because LN has experimented with all-in and paperless ticketing as well as dynamic pricing, he be-lieved Hubbard would have had “definite ideas” to share.
But most panelists argued that all-in ticketing wasn’t going to solve the concert industry’s woes – and some argued that add-ons create much-needed transparency.
“We have all-in ticketing and we have tickets with service charges, and they’re all pieces of the puzzle,” AEG Live’s John Meglen said. “What we need to do is properly price our tickets. If someone wants to FedEx or print at home, there are charges. But I object to ticket fees becoming a secondary revenue stream. There is total transparency today.”
There was a temptation to compare concert tickets with hotel and airline pricing, but many felt that analogy misses the mark. If there was consensus, it was that consumers aren’t happy.
William Morris Endeavor’s Brent Smith came prepared to argue against the travel price analogy. He’d done his own research and brought the charts to prove it.
“I looked up on Kayak.com to see who charges what fees on airlines. I also looked at Business Week and indexes for consumer happiness,” Smith said. “Only two carriers ranked high on customer satisfaction – those were South-west and JetBlue, and they don’t charge for bags. There is a back-lash to airlines for nickel-and-diming you to death.”
Smith said the same backlash is being directed at the concert industry. “All you have to do is look at two like cities with the same artist. Experiment with the variables – you could easily test it. We don’t do that because that’s what smart people do.
“Here’s a club show advertised at $18. Ticketmaster is up front about the facility fee. It still has a convenience fee of $6.50. Then there’s a TicketFast fee. It’s now a $31 ticket.”
An audience member later challenged Smith to do a nation-wide test on the premise and publish it in the “Lefsetz Letter” – an idea that was quickly rejected.
Lefsetz chimed in that club-goers were generally happy con-sumers who know what they’re getting, but “further up the food chain, fans want to know why the fuck they have to pay to print at home.”
ArenaNetwork’s Jim McCue said the frustration with ticket pricing isn’t universal, but that he under-stood it. And the example used was all-in ticketing.
“We’re doing all-in Eagles dates and nobody’s complaining,” McCue said. “From the building’s standpoint, I’m not hearing com-plaints. I like John [Meglen]’s word: transparency. When I get my hotel bill, I know when I check out of the hotel I’m going to be surprised with added fees like state taxes, parking, and so on. But I know they will be there and I can see what they are.”
Peter Luukko, whose Comcast-Spectacor was in the process of acquiring Ticketmaster’s Paciolan unit at the time of the panel, said fans enjoy the experience more with all-in buying experience and cited “all you can eat” pavilions in some sports venues.
“I don’t think we will sell one more or one less ticket [with all-in ticket pricing], but I think the fans will enjoy the experience more,” Luukko said. “The all-you-can-eat sections have more value and they are the hottest tickets we have. We found out we can make money on that because you can only eat so much of that shit!
“I’m also lucky enough to re-member the 5 percent box office commission. We used to charge the credit card commission to the show, so it was below the line. Now, all that stuff is above the line. It all costs money and we’re all here to make a profit.”
The bottom line for Luukko was that “we have to figure out the right price. That can all be figured out, but if we can do something to make consumers’ experience better, it’s worth trying.”
Meglen agreed and emphasized the importance of knowing the value of the live experience, and warned against devaluing it with discounts that only anger some fans and “train” others to delay purchasing tickets in hopes of a later discount.
“Scaring the shit out of me is the idea of discounting our tickets,” Meglen said. “If that happens, we will totally devalue the commodity that runs our business. Heaven help our industry if we go the way of the record industry. We can’t reproduce the live experience.
We have to find the value. Con-venience is something people will pay for at different levels: People who want to talk to somebody, to get something physical they can walk to the door with, who will pay for VIP packages, for parking, for a better location.”
Meglen sparked an exchange over the meaning of “all-in” and said the public is confused about what it is they are paying for when they buy a concert ticket.
“It’s our job to straighten them out,” Meglen said. “They think Ticketmaster owns all the tickets and they are gouging you, and we’ve allowed that. Fred Rosen created that wall for us. Historically, that’s where the problem exists.
“It’s not about if the ticket is all-in or not if the public thinks Ticketmaster owns 100 percent of the tickets and they will rape you,” Meglen continued. “I think fewer people will use [Ticketmaster] in the future because other compa-nies are coming up.
“What we need is a closed ticket and an open distribution system. As long as people think Ticket-master controls all the tickets, they are going to stay pissed off.”
Paradigm’s Dan Weiner agreed. “People feel like they’ve been kidnapped and that’s where they feel resentful. People need to feel they are paying a fair price and are treated equally to everyone else.
“We’re training people to not be loyal,” he continued. “We have to be more responsible as an industry and realize that the most impor-tant thing we have are the fans. As for the notion of training the fans, we should take the opposite approach and learn from them. Transparency means they know what we’re up to. They should see it as something good, not some-thing devious.”
Getting in the final word was Meglen.
“There’s a resentment. In the public eye, this big dark company called Ticketmaster has been raping them for years. A $30 ticket needs to be a $30 ticket.
We have to get rid of the resent-ment and get back to where people can conveniently and fairly buy tickets.”
|Deborah Speer|