If it's good, it'll be in here somewhere and having twice featured avowed capitalist Tim Oren, recently, now it's the turn of Oren guest blogger Kevin Laws, described as a former music industry consultant and current venture capitalist.

He believes anyone who thinks the demise of the labels will bring relief has much to learn.

Now read on >>>>>>>>>>>>>>>

Toppling Ticketmaster

By Kevin Laws

Many writers these days seem to be quite gleeful at the recording industry's current troubles, believing that their downfall will bring us relief from rapacious monopolists controlling the music industry. Unfortunately, all the fall of the recording industry will accomplish is to deliver the industry to a player with even more power: Ticketmaster.

File sharing is finally having the bottom line impact that the recording industry has been claiming for years. Whether information wants to be free or not, file sharing has definitely pushed it out the door.

This has turned the music industry on its head. It used to be that the Rolling Stones would tour in order to drum up publicity and demand for their album. No longer - concerts are now tremendous moneymaking opportunities for top artists. After all, while you may be able to copy "Satisfaction" for free online, nothing will replace the experience of Mick Jagger performing it 50 feet away (or more like a football field away if you buy the tickets I tend to get). The numbers support this trend: Ticketmaster's average ticket price jumped by 10% last year alone.

These days it may be hard to control information well enough to sell it, but you can still charge for experience. As one columnist pointed out recently, this is what has saved the movie industry from the same fate as the music industry so far.

Out Of The Frying Pan, Into The Fire
Unfortunately, this trend is just shifting the power from one set of players with massive market power to an even bigger monopolist: Ticketmaster. If you think the music industry's practices are hard to swallow sometimes, look at the complaints people have against Ticketmaster - most famously, Pearl Jam's failed boycott.

Ticketmaster recently started auctioning off the most valuable tickets instead of charging fixed prices, ensuring that they get an even greater portion of revenues - probably the right thing to do now that concerts aren't marketing vehicles anymore (though Dave Hornik disagrees). However, they are taking a huge portion of the revenues from both ends of the transaction and fighting both bands and consumers to keep hold of their monopoly.

Ticketmaster holds its monopoly because, like Ebay or NASDAQ, it's the place two sides of a transaction have settled on as the place to go. Don't be fooled, though - as a consumer you aren't one of the sides of that transaction. You will go wherever you must to get tickets, so they'll take you for everything you are worth. Instead, the two sides of the transaction are the venue or promoter that has the event (e.g., Madison Square Garden) and the ticket distributors (music stores, cigar stores, anywhere else you purchase tickets).

Ticketmaster was very smart about the Internet, seeing its potential to bypass their distribution network. They moved very quickly to use their existing monopoly to lock up the Internet channel as well - they purchased the new "local stores" online (CitySearch) and promptly sued anybody who tried to set up a new destination site for tickets. Most famously, they sued Microsoft for deep-linking into the Ticketmaster web site.

So far, they have been quite successful - revenues have been growing profitably at 15% a year or more, and more than half their sales are directly over the phone or Internet, leaving them with no other middleman to share the profits with. Despite the Justice Department concluding in the mid-90's that they weren't a monopoly because there were new enterprises coming into the arena, they have yet to see serious competition.

Toppling Ticketmaster
However successful they have been on the Internet, however, Ticketmaster still has a problem: the Internet cuts the number of middlemen. Their network of ticket outlets is becoming less important, and many of them (the retail music outlets in particular) are not doing well.

Ticketmaster's days as a monopoly are numbered, and there are two players in particular that are perfectly positioned to take them on; companies with established online presence, trust, and technology to handle sales: Ebay and Amazon. These days, primarily Internet-based sales would even work for major events whose audience is not on the Internet in huge numbers (think NASCAR) because there are enough people who are net-enabled to allow reselling. Simply provide volume discounts and distributors will automatically set up. Amazon could even resolve the off-line problem through its relationship with Borders - where, incidentally, music is also sold.

As Ticketmaster's exclusive contracts with venues expire, Ebay and Amazon should bid for the contracts, and do it in a way that slims the giant wedge in price between the ticket sellers and the ticket buyers. The Internet may yet deliver music consumers from the control of monopolists, but it is going to take more than the demise and reinvention of the major record labels to do it.

Excellent article..yet again.

... wow. As bad as that sounds, I'll honestly say that I don't care on that one, since I'm not Mr. SeeEveryConcert, nor do I really care for the bands who ARE on tour.

I must confess I don't know much about Ticketmaster and how they got to such a strong marketing position.

I do know that in many areas concert ticket prices are going up. This is in part due to free market forces; if bands cannot make as much money selling CDs, then they may try to make extra money by charging higher prices for concert tickets.

But, if the big names charge more money for concerts, there may be an opportunity for smaller bands to undercut the big name bands and get more of an audience. After all, teens and PPS ('poor starving students') can only spend so much money on a Madonna or N'Sync ticket; maybe they will start looking at other venues to see live music if prices get too high.

The bands nowadays put on pathetic concerts. Kinda funny about those people sueing Creed because they put on such a horrible performance. No-one to blame but the artists themselves for less-than-desirable ticket sales.

If eBay and Amazon are the only alternatives, then my concert-going days are over.

most bands make money off of the merch they sell. even indie bands do this as well. THe ticket price is set between promoter and venue and big name bands ask a going price. Such as the stones a few yrears ago were charging a venuie where I live like a million dollars or more out of control. but this is where the artist make their cash, very little in cd sales if any. do a search on Courtny Love / salon and read waht she has to say abouy cd sales.

Good. fu*k Ticketbastard

I guess the next step is to start downloading tickets from the artists themselves. Buy and print concept...

James

Matters not to me..I don't go to the big concerts anymore. I prefer the small shows, like Toni Price at the Continental Club. They're really better performances, more intimate surroundings, and easy to get in and out. Plus, you can grab a brew and something to eat without fighting a huge mob. No problems parking. Last time I went, my table was like 15 feet from the stage. It pays to live in the Live Music Capitol of the World...

One step at a time. As the record companies fail the artists will be able to control more aspects of the recording contracts. As this happens the artists will gain more power and confidence in dealing with Ticketmaster. When prices go up and consumers stay home it will lead to a show down between the bands and Ticketmaster. If Ticketmaster doesn't bend the bands will go elsewhere and the consumers will come back. It's the same basic principle as what is going on right now with the recording companies. The artists need to stand up for themselves and us consumers that love music are trying to help them. And we'll do the same when it's time for Ticketmaster's fall.

First the Big 5!
Then Ticketmaster!

A few years back, Pearl Jam waited until the last second, then released a whole lot of extra tickets to be sold, thus forcing the price way down. People were literally giving the tickets away.

~goingnova

If you tour enough, and actually make good music, word of mouth spreads itself! you don't need the RIAA... All they can do is manufacture music like boybands.. Shoving that F-ing crap down our throats! I can't believe the public has put up with the RIAA this long.. Music is a need in life.. a fine craft created and needed by the people in order to be shared by people and music brings us together.. Why should such an essential element of human life be controlled by a monopoly????? It's like having Evian (bottled water) control 80% of the worlds water supply and selling it for 15 dollars a gallon!!!j If the RIAA had competition like most industries, cd's would be $5 bucks a piece, no doubt!

Let's not forget all, concerts is where the musicians make most of their money. RIAA, and the labels are who get's rich off of packaged music sales not the artist. So if Carey Sue and the rest of the 'sharks' are so worried about the artists, why don't they start attending the concerts!!

gratefuldead
tickets still 28. bucks
(closer to 40 if you buy through TM)

I wouldn't pay 40 bucks for a concert, let alone for a BJ from Britney Spears.. give me a break.. !!

it makes sense that going to a concert should cost the concert promoters less than hosting a sports team.. you have one person or a few people singing.. C'mon, what do you need?? speakers mics, a few special sets and effects and you're golden... so why can i go to a hockey game for only 20 bucks but have to pay 40 for a concert???? Hell, there was even controversy over the price of sports tickets!! You have sports stars getting paid 100 million dollar contracts plus the rest of the teams dinero.. and they are still making money off of tickets !! Sports teams have about 500% more overhead, they charge half as much and they are still making money.. But if I want to go see a Bush concert I have to pay 40 dollars to see four guys play!! Something wrong with this pic??? I think so... RIAA, raping ya from every angle they can..!! I fear though that the RIAA has so much money that they could literally exist a boycott for about 30 years before they died.... scary thought but after sucking the consumers of the whole world dry for the last 40 - 50 years they must have so much money that they burn the Sh*t in their fireplaces to keep warm and think noting of it~~~!!!

Lots of bands put on such horrible shows because they are studio creations and cannot replicate what they do in the studio live (i.e. lipsynching boy bands and Limp Bizcut). Creed really has no excuse to be bad because they are a fairly simplistic band musicwise ( I never cared for them anyway--they just ripoff everyone else). There are plenty of bands still doing fantastic live shows. Jethro Tull played near me and people who didn't even know who they are(they played in a outdoor venue in a neighborhood setting) were remarking how fantastic they sounded. And they were 25 bucks a ticket.

Touring is fine, but you have to have to have the music out for people to want to see you live. If you download a new indie band's song (or 3!!) and really like it(them), and then happen to see in your local newspaper they are in town at a local venue for 3 to 8 bucks, there's a real good chance you will go to see them. And if they put on a good show, and you hear more decent songs, next time they come around to a slightly bigger venue, you might pay 10 to 15 bucks to see them. And while you are at their concerts you might just grab their latest CD or a T Shirt. And a band might just make it without the RIAA or Ticketmaster this way!!!

yeah, i love music.. all genres and forms of it.. music should be reasonably priced and live shows should be accesible for reasonable prices.. I shouldn't have to pay an arm and a leg so i can see some jackasses who sound good on cd play live but after i spent 40 bucks find out that they really suck ass horribly!! This happens so much in the industry because a lot of these acts are PRODUCTS not bands... Just like that fat bastard who got N'sync together.. Those guys had no true ambition in order to make it.. Even tv shows were made called making the band and Sh*t like that.. Give me a break!! you might as well say they were mediocre singers who hit the jack pot... Most vocal bands today have a lot in common with American Idol... It's a contest of luck in order to see if you get signed or not, and if you are a great singer and/or act who is unlucky that doesn't get a contract you might as well kiss your ass goodbye and give up your dream because the RIAA doesn't think it can make millions of dollars off of your like you are their little bitch! Then who are you going to go too? no one, because those jerk offs control the whole industry.. it's like seeing a doctor who won't allow you to get a second opinion! And not to mention (off the topic).. ITS pretty bad when an addiction which is one of the only addictions that is healthy for us (music) that is it is controlled by an industry that is a monopoly that sells music, then packages it like it's a drug for high prices.. I've even heard execs say, "we make music, and they (the public NEEDS us)".. Sorry but we don't need you assholes, just the music... Suck it C*cksucker!!! I have so much hatred for you it's unbelievable~~!!

RIAA MUSICIANS = EXPLOITED SLAVES

The boycott against Ticketmaster is failing? I havent bought any tickets since Pearl Jam told me not to, almost did for Ozzfest but the online site told me there were seats left and when I got to the actual outlet there were none together. Ticketmaster lied to me. I'll never buy thur them again.

7 yrs ago Ticketmaster fought me tooth and nail over double charging me for tickets to an NHRA drag race, Finally Visa sided with me and ruled against TM. 3 yrs ago I ordered tickets to see KISS. Ticketmaster would not accept my credit card. So I bought them with my business card. hahah Petty assholes! Ticketmaster is an organization of lying, thieving bastards.

yeah i understand RythmMethod. My friend a few years back had a similar problem, I guess anybody affiliated with the RIAA or the Entertainment industry is bound to be a bunch of theiving bastards... I just wish people would realize that the consumer has the ultimate power to boycott... I boycott a lot of things, like paying 40 buck for tickets to a concert, payint 80 dollars for a pair of jeans, and paying 200 dollars for a pair of nikes.. I think the most effective way of killing business practices that only exist in order to exploit the public is to boycott them all like we are doing with the RIAA right now... Without us business's are nothing but a bunch of jackasses selling useless garbage for overly inflated prices, with us they are just successful corporate jackasses selling us goods for overly inflated prices... Be wise, don't let them use you anymore and boycott as much as feasibily possible.. plus you save money, and the way bush is sucking corporate america's C*CKs, we may need that money just so we can retire without starving to death or working at mcdonalds when we are all 90 years old just in order to pay for our prescription medication that will cost us 1000 dollars a month...

Does anyone remember the spat between Ticketbastard and (I think) Pearl Jam about 10 years ago? Some bands realized the monopolistic practices and tried to disallow the company from selling tickets to their concerts. Goes to show that the bands don't like this much more than us, the fans.

justin42980,

no sorry, I'd pay britney spears 40 bucks, but then I'm a pervert.

back on topic, so what if ticket bastard goes under? so what if the riaa goes under? they've had their run. they soaked the world for their money. I have no sympathy left for the greedy bastards. If they go under today it's still 40 years too late. I'll take my chances with whoever steps up to the plate next. maybe they'll see that offering the customer what they want is a better way.

After we tear down the RIAA and the Mass-Media Oligopoly...
don't you worry, TicketMaster is next on our list of monopolistic behemoths to fall...

Shmoo, of Electric Gypsy
Support Local and Independent Music!
Free CD 4 U at http://electricgypsy.iuma.com

Justin42980, if it takes 30 or 40 years to kill the RIAA via our little boycott, it is still worth it.

DIE RIAA, DIE

$10 or $20 bucks (at the most) is a fair price to pay for a concert at 5000 or less seat auditorium... anything with bigger capacity than that should range from free in the back, up to that $10 or $20 amount for seats up in front.

There is no fair reason for it to cost more than that.

RythmMethod, you got off easy with your TM problems getting Kiss tickets 3 years ago. I ordered tix 3 years ago for Kiss and got 4th row tix, but then they screwed up and lost the order because they had their servers set up to let too many people on at once and they crashed. When I tried to talk to them about it they told me that was my problem and if I still wanted tix I had to reorder them and take whatever was available, and refused to give me what I had already bought!!! To top it all off I ended up getting shoved back to the middle of the rear section of seats and when I told them I thought I should get a partial reimbursement on the tix since they were replacing my 4th row tix with ones some 40 or so rows back they (LITERALLY) laughed at me and still made me pay the same price as the 4th row tix! Add to that, they gave me a major hassle just getting the tix in my hand, I almost still didn't get to see the show even after I ordered tix TWICE on the first day they were on sale!!! I also talked to the state government office that oversees the laws and such relating to event ticket sales and they told me TM was legally obligated to give me the 4th row tix since the order was fouled up on their end and not mine. When I told TM that as well as giving them the name, office and phone of the person I spoke with they told me they didn't care what he or the law said!!!!!

I had problems with TM long before that, but my real beefs started when I saw Ozzfest tix being offered first to people who bought Ozzfest tour shirts directly from TM Online and being offered out to those people before the public on-sale date. Buy merchandise from us, get first crack at the good tix, don't buy merch from us, take whatever's left over was the way it worked. Then they had the "random number" stunt for a while. Ozzfest 98, I got to the ticket window at something like 5am, tix didn't go on sale till 10 and there was already a line. 30 min or so before sale time they started going down the line handing out numbers. By the time they got to the end of the line it was only 15 minutes before sale time. About 10 minutes before sale time they pulled a number from a bucket. Whoever had the number they drew went to the start of the line along with everyone in line behind him,while the front of the line had to move to the end of the line. People who stood in line for over 8 hours had to go to the end of the line while people who got there just as the "number givers" got to the end of the line got first crack at the best seats. I asked them what that crap was about and told them I had a mind to report to TM that they were cheating the people who were first in line and they told me the "random number" system was actually done on orders from TM at all the ticket windows selling Ozzfest tix! When I was in my prime concert going days back some 8-10 years ago the rule of the road was first come first serve. You want good tickets, find a ticket window and camp out overnight, or at least get there really early in the morning. I actually ended up going across the street to a pay phone and ordering the tix there because I found out just mere minutes before the tix went on sale that they were not opening any charge card windows at the box office I was at, they were going "cash only" and never announced it in advance, so there I stood with a charge card and no cash at an outlet that had arbitrarily decided on that day to open nothing but "cash only" windows. Believe me, the people at the TM phone center heard an earful about that when I called in to order the tix. Fortunately I got somebody really nice who bent a couple rules to get me really good tix for the hassle I also remember that it used to be if you went to the box office of the venue the concert was being held at there was no convienience charge on the tix. No more on that, there is no place at all to buy tix w/o paying a convienience charge on each ticket. This leads me to wonder if TM's advertised price policy is legal or not. Let's say you look up a concert on TM and it says the tickets are $25 each. You go to buy the tickets and you find out they're actually $30 each because of a $5 per ticket convienience charge. TM argues that the tickets are actually only $25 each as they advertised, yet there is no place on earth you can get them for less than $30 per ticket! And to add insult to injury, if something happens and the concert cancels (such as the Powerman 5000 show that was supposed to be in my area recently) YOU DON'T GET THE CONVIENIENCE CHARGE REFUNDED! Yup, that's right, they keep it, even if the show cancels out completely you just paid TM $5 (per ticket) for nothing. So if a 5000 seat arena sells out a show then cancels the sold out show TM still collects $25,000 from the fans who got absolutely nothing in return! Another big scam I've found out they're doing is the "print your own tickets" scam, where you buy the tix online, print them on your own computer, and PAY THEM AN EXTRA SERVICE CHARGE FOR USING YOUR OWN EQUIPMENT to print the tix and saving them the paper and paying somebody to ship the tickets to you! I think I've given more than enough reasons for wanting to see TM burn in hell along with the RIAA, and rambled on far too long, I'm shuttin' up now & letting somebody else talk!

I'm tired...'goin to bed. G'night.

Again, I have to ask, where is the Justice Department? Where in the law does it say that if you are a new company you can do monopolistic practices?? This just goes to show what well placed money can buy. I wonder how much it cost to acquire the 90's Justice Department's decision on THAT one.

Ticketmaster is one of the most vulgar monopolies being allowed to run free in our society. And they don't even have copyright laws behind them!

Is this about the MUSIC side of TM or the entire organisation? TM handles wrestling, boxing, sports and "other" shows ie cars, craft, computer etc. In a lot of cases (wrestling and car shows to name a few) they are the ONLY outlet unless you go to the box office, which is sometimes not feasible due to geography ( I live in New Hampshire, I can't go to the MSG box office every time a show is there that I like). SO.. I guess I'd rather have TM or someone like them in place for this rather than someone else that does't have the longevity or .. hang with me..reputation they have. You can't GET tickets to car shows, wrestling events or the like at Borders, or Penney's or even the local record store, they just don't carry em.
I kinda liked what PearlJam did, but they went about it in a weird way *shrug* oh well, it showed that a band can influence the money. Maybe now tho, since the concert or live show will become a major revenue stream again for the riaa and the artists, they'll start pricing tickets around that model. I mean, which is better...
500 seats @ 50/e or 50000@15??
ttmmm

MICHAEL MOORE SUCKS ASS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!