Mangia…or how you can get cheap concert ticketsPosted: May 10, 2011 Filed under: Business Musings | Tags: Groupon, Live Nation, Ticketmaster, TKTS Leave a comment
Last week I had lunch with my friend David. We used to work together at SFX Entertainment (now known as Live Nation), and he has long harbored the idea of creating something like TKTS for concerts, sporting events and the like. We talked about what such a service might look like and how it would be pretty easy to pull off technically. The stumbling blocks, though, were two-fold. First, is Ticketmaster. We all know Ticketmaster as the go-to source for all kinds of tickets, but what most people don’t know is that venues use TM’s systems for inventory control. Thus, any sale of tickets has to tie into TM’s systems. Second, and far more gnarly, is the artists. While everyone loves to think of TM as the evil empire with respect to inflated ticket pricing, the truth is control (and therefore blame) lies squarely with the artists.
So imagine my interest when I read this morning that Groupon and Live Nation (which owns TM) have teamed to, in effect, create a TKTS for live events (Groupon Brings Group-Buying Concept to Concert-Goers With Ticketmaster Partnership). Sounds pretty good, right? Yeah, well, not so fast. If you think this is going to be a cheap source of Lady Gaga tickets, forget it. If you think it’s going to get you (dare I say it) Justin Bieber tickets for your kid, you’re SOL, which is probably a blessing. If, however, you’re bound and determined to catch Journey this summer because you’ve missed 15 out of their last 15 tours, this deal’s for you!
Quick education on the concert business: It sucks. It is a high fixed cost, real estate based business, and there are too few artists that can fill an amphitheater or an arena, and too many one-hit wonders and rock and roll dinosaurs. Ticket prices are too high. Artists are unwilling to lower them. Promoters still feel compelled to pay artists guarantees that give them @100% of ticket revenue. This puts artist and promoter at odds since the promoter is essentially in the beer/popcorn/parking business and therefore ultimately cares more about butts in seats and less about how much a ticket sells for as the show date approaches.
So tell me: do you think Steven Tyler, coming off the success of AI, is going to allow his tickets to be discounted when he’s earning a guarantee? Do you think he’s going to publicly admit that his show is sucking wind one minute earlier than necessary to ensure a reasonably full house the night of the show (no one likes to play to an empty house)? And while a ticket purchased through Groupon is presumably discounted, there has to be some margin in there for Groupon, right? So why buy from Groupon when you can buy from StubHub.com or any scalper (fyi, scalping, or “reselling,” is legal in most states) who is also sitting with unsold tickets they can discount more deeply because they don’t need artist approval or to compensate a middle man?
The only way this deal works is for acts like Journey and Queensryche and their ilk – bands that tour year in and year out, rarely if ever put out new material, and no one wants to see. It also works for other forms of live entertainment – sporting events, the circus, and monster truck rallies.
Here’s my advice. If you want to see a show, make friends with someone at the venue and find out when the “holds” – the tickets that are held back from the initial on-sale by the artist, the promoter, and/or the building for friends and family – are going to be released for sale to the general public (generally a few days before the show). These are always the best seats in the house. Stick to club shows – that’s where all the interesting stuff is going on musically anyway. Or, get ready to see The Big Apple Circus.