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Author: Subject: Ticket brokers-obsolete at some point?

Universal Peach





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  posted on 2/3/2009 at 01:07 PM
http://money.cnn.com/2009/02/03/technology/tech_daily.fortune/index.htm?pos tversion=2009020311

Ticket resellers: A butt in every seat

The secondary market is hot, but Web brokers are facing tough economic woes and competition.
By Stephanie N. Mehta, assistant managing editor
February 3, 2009: 11:27 AM ET

NEW YORK (Fortune) -- Don't call them scalpers - call them resellers instead. They are brokers that peddle hard-to-find tickets for live events such as concerts or sporting events, and they have gone legit thanks largely to the Internet.

Web-based ticket exchanges and services have proliferated - Forrester estimates U.S. online secondary ticket sales reached almost $3 billion last year, up from about $2.6 billion in 2007 - and in the last couple years a few prominent players have been snapped up some of the biggest names on the Net. Auction site eBay (EBAY, Fortune 500) bought online ticket dealer StubHub in 2007 for about $310 million and last year Ticketmaster (TKTM) acquired reseller TicketsNow for $265 million.

Even sports teams, never fans of scalpers, have inked formal deals with high-tech resellers. StubHub has a five-year contract to serve as Major League Baseball's official source of secondary tickets, and last year the Boston Red Sox signed local agency Ace Tickets to handle ticket reselling.

A Google for tickets
The latest players to enter this bustling business are online ticket aggregators, who want to do for event seats what sites such as Travelocity and Kayak do for airline tickets or hotel rooms.

SeatQuest, a Chicago-based company, launched in late 2007, and TicketStumbler debuted last year. Ticketwood.com of Northridge, Calif., bills itself as a comparison shopping service for event tickets. FanSnap, the newest entrant in the field, likens itself to a search engine. "We're Google for tickets," says FanSnap CEO Mike Janes, a former StubHub executive.

It is a good analogy, since a good number of would-be buyers begin looking for tickets via search engines. The hitch is that Google (GOOG, Fortune 500) and others don't necessarily produce links to brokers that have the right tickets to sell; sponsored links may belong to companies that are willing to pay high amounts for each lead generated by the search engine.

"Everybody starts at Google," says Ray Elias, director of marketing at StubHub. "It's good, but it generates an ad, and the fan has to click on the ad" and put in all the information about the event he or she wants to attend.

FanSnap's searches turn up only the brokers and sellers with available tickets, Janes says, cutting down on fan frustration. It lets consumers search for tickets by date, venue, team, and type of entertainment, and offers an array of interactive maps to help buyers figure out exactly where they would be sitting.

The company has inked partnerships with dozens of ticket resellers, including Ace Ticket, RazorGator, TicketNetwork and StubHub. "This is an interesting new channel for us," says StubHub's Elias. "We're excited to see where it goes."

FanSnap's revenue model is simple: it collects a fee for every lead it generates for its affliliates. Janes says ticket brokers are used to paying in the range of 6% to 16% of a ticket's selling price as a lead fee.

FanSnap and its competitors are jumping in to the secondary ticket business at a particularly tough time, though. The days of Wall Street types shelling out $1,000 a ticket or more to take clients to a coveted concert or sporting event are long gone (especially for those banks that have taken taxpayer bailout money).

Average fans also are increasingly reluctant to pay big premiums to see their favorite acts. Consider this week's Super Bowl: Just days before the big game StubHub said it had tickets available starting at $1,300. That's about half what lowest-price tickets to the Super Bowl cost in past years, says StubHub's Elias. (The face value of tickets to the Steelers-Cardinals matchup was $800 to $1,000.)

Indeed, many of the tickets found online these days aren't selling for a premium but rather at discount as season-pass holders try to recoup some of their money, or cash-strapped folks try to unload tickets they shouldn't have purchased. Janes says an efficient secondary market can help fill up stadiums even in a bad economy "Our mission is to put a butt in every seat."

Eliminating the middleman
One troubling trend for online ticket brokers and aggregators is that the artists and teams themselves are angling to take more control of the reselling tickets - using the very same technology that gave rise to the thriving secondary business.

Cleveland Cavaliers owner Dan Gilbert also controls Flash Seats, a ticketing company that enables season-ticket holders to enter games without paper tickets - they can use a credit card or other ID to gain electronic entry to their seats.

But those same fans were also supposed to use Flash Seats - not a ticket broker or exchange like StubHub - to resell their seats. (Ticketmaster sued the Cavaliers over the use of Flash, and in October a U.S. district court judge recently ruled that the team had violated Ticketmaster's contract with the Cavs. The judge ordered the team to stop using Flash to resell tickets.)

Flash Seats' technology makes event tickets more like plane tickets - nontransferable. And ultimately, analysts believe, performers and teams will prevail in requiring ticket holders to use sanctioned sites, not brokers, if they want to transfer or sell unused tickets.

"Technology is evolving to enable the teams to have more control of the reselling of tickets," says Sucharita Mulpuru of Forrester Research. "The ticket broker will become obsolete at some point; the artists will be the ones who manage the platform, and they will be the ones who manage the reselling of the tickets."

Mulpuru notes that this shift will take several years; meantime she's predicting that the online resale ticket business will grow to $4.5 billion by 2012. Plenty of time for Web-based brokers and aggregators to sell more tickets, and perhaps, find new ways to make money putting butts in seats.

 

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Zen Peach



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  posted on 2/3/2009 at 01:31 PM
so if ticket brokers buy all the tickets, then resell,
how does that show/sport or whatever constitute
as a sell out?

Considering the public now has to buy them from
an alternate source with added fees?

 

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Extreme Peach



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  posted on 2/3/2009 at 01:46 PM
you know, i went YEARS without buying from a broker. then this summer, the brokers hit the ABB / Phil show here in Charlotte HARD. pushed us waaaaaaaaaaaay back from where we're used to being. (in Charlotte, that'd be Row J, 10th row - big venue, wide rows, we buy early). i watched the prices - good NIGHT - and then, as the show got closer, the prices went lower. and lower. and no one was buying them. we wound up being the ticket buyers for about 12 - 15 people, ALL of whom wound up 7th row in, and FOUR of whom wound up front row, TWO of those DFC between Warren and Derek. those last two seats - $30 over face value for the pair. the other 2 front row about the same. 4 on the 5th row - LESS than face.

the band got their cut, and the secondary market worked for us. unusual situation, back to the sidelines, but still.

now AC / DC, well, the market worked the other way for that, i understand.

 

Zen Peach



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  posted on 2/3/2009 at 03:35 PM
haven't bought form a broker ... yet

but seems that will be the way to do it
in the future

 

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True Peach



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  posted on 2/3/2009 at 03:43 PM
A good part of the reason for the scarcity is the scalpers get easier access to the premium tickets than the general public, so they are creating their own market. for sure, for some events there is more demand than tickets. But the demand would certainly be lower, and thus the premium prices lower, if fans got equal access.

 

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  posted on 2/3/2009 at 03:47 PM
No "broker" will ever see a cent of my money. There are plenty of ways to get good tickets at face value. Haven't been shut out yet but I'd rather miss a show than pay those leeches.

 

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Universal Peach



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  posted on 2/3/2009 at 04:48 PM
A world without ticket brokers....IMAGINE!

 

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  posted on 2/3/2009 at 09:35 PM
From the ABB sales of the first 2 weeks it looks to me like the brokers have a lot more tickets this year than in past years. I've taken a look at the broker sites for the Dead and the ABB and there are a lot of tickets on the "secondary" market. I was totally closed out of the Dead general sale at MSG, even though I was on it the second the sale started.

To me brokers should only be used as the last possible resource. People should not worry that they won't get a ticket. As time gets closer, keep on checking back with ticketmaster and of course the fan sites. Fans find they have extras as the dates of the show get closer and the brokers must lower their prices too on the ones that haven't sold. I won't say I've never used a broker but I try not to and this year I refuse to use one for the ABB because I think the brokers glommed up all the tickets. Not just the brokers but fans who think they can make some easy money too.

I am of the mindset too that eventually brokers will be come obsolete. What is their purpose other than to rip off the bands and the fans? They provide no legitimate function except to inflate prices and then that money does not go to the band or the venue. I guess i can see season ticket holders wanting to sell their extras and that to me makes sense and feels legitimate, but not what is happening generally now.

Brokers are using computers programmed to do multiple searches on sites like Ticketmaster and Live Nation. That really does prevent legitimate fans from having an equal chance at getting any tickets so to me that is totally unacceptable. As we struggle to decode the captchas their machines are buying maximum numbers of tickets per computer isp number which is multiplied by 10 (probably) for each machine due to how their computers are programmed. It is an uneven playing field and that is what makes me quite angry as I believe in an equal playing field generally.

I generally refuse to buy a brokers ticket except for serious need. I may have to break down for the Dead at MSG. Even in my own city I can't get a freaking ticket to a show that seats almost 20,000 people. And I was on line the minute tickets were on sale. When I saw all that bs I did go and order some tickets from the Dead Mail Order and I found that to be a nice way to handle things. Only problem was my MSG request came back to me with the money order and now I have to go back to the post to get it cashed back to me. It is a bit of a pain but I am cool since I will get tickets for three other shows through them so I am alright with the whole process. I also like that they hold off sending out the tickets till 2 weeks before the show which cuts down on scalping by fans who went through the presales.

Dave Matthews has a mail in kind of thing too if I am not mistaken. They base your seats on how long you've been buying tickets from them and I believe they also alternate the proximity to the stage so that people get rotated so that people have a fairer chance at getting the great seats but no one person gets too many at the exclusion of other people.

Anyway, I do think bands will need to take up on this issue a lot more as ticket prices get steeper and fans leave the fold because they can't ever get decent seats anymore.

I will also say that how the ABB handled this last week was perfect. I send them (and Lana and Rowland) many kudos for how the sale went and I am 100 % sure it is because of the timing and the fact that the last week was sort of off the radar screen of the brokers. It was a job well done and hopefully the brokers will see they have a lot of stock and leave the remainder of the tickets in the general sale alone so that regular people have a shot at them.


quote:
A good part of the reason for the scarcity is the scalpers get easier access to the premium tickets than the general public, so they are creating their own market. for sure, for some events there is more demand than tickets. But the demand would certainly be lower, and thus the premium prices lower, if fans got equal access.

 

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  posted on 2/4/2009 at 08:40 AM
http://www.reuters.com/article/newsOne/idUSTRE5130LN20090204


Ticketmaster, Live Nation in merger talks
Tue Feb 3, 2009 11:07pm EST
By Jui Chakravorty Das and Joe Giannone

NEW YORK (Reuters) - Ticketmaster Entertainment Inc and Live Nation Inc may unveil a merger as soon as this week, creating a music industry powerhouse with a combined market value of over $700 million, a source briefed on the talks told Reuters on Tuesday.

If the deal goes ahead, the marriage of the world's biggest concert promoter and the leading ticketing and artist-management company will create a dominant force in the industry with ties to more than 200 artists such as the Eagles, Miley Cyrus, Christina Aguilera, Madonna and Jay-Z.

A successful deal will also crown Live Nation's longstanding efforts to mold itself into a diversified conglomerate with businesses beyond concert promotion.

A source briefed on the matter told Reuters that talks are at an advanced stage, but could still fall apart over issues such as management control.

Another hurdle would be competition issues because such a merger would concentrate power in the music industry under one roof.

One senior music label source, who did not want to be identified, told Reuters the merger will "face major antitrust issues from managers, record companies, ticketing companies and concert promoters to name a few -- not to mention the Obama administration will be very tough on this stuff."

The new company would be called Live Nation Ticketmaster, the Wall Street Journal reported on Tuesday.

The paper, citing unidentified sources, said the boards of both companies had yet to approve a merger. The deal will not involve any cash transfer, said the Journal, which was first to report on the advanced talks.

Ticketmaster spokesman Albert Lopez declined to comment. Live Nation officials were not immediately available.

Live Nation has been trying to boost its thin concert- promoter margins by diversifying into adjacent businesses such as ticketing, which has margins as high as 25 percent versus an average 4 percent from concert promotion.

In December, the firm said it expected no further growth in 2009 in the midst of a recession, even though it forecast fan attendance would rise 10 percent.

As part of its expansion thrust, the firm became known for signing big names like Madonna for so-called 360 deals that combine artist management with touring and merchandising.

Ticketmaster has also made forays into new territory. Last year, it acquired Front Line Management, which represented around 200 major acts.

Irving Azoff, head of Ticketmaster, and Live Nation Chief Executive Michael Rapino both are expected to remain at the combined organization but their exact roles have not yet been nailed down, the Journal reported.

A person brief on the talks told Reuters that Rapino is expected to be the CEO of the combined company.

 

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  posted on 2/4/2009 at 08:49 AM
they should all die a slow and painfull death
 

Zen Peach



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  posted on 2/4/2009 at 11:47 AM
I'm glad that the apparant antitrust nose thumbing currently being done by Ticketmaster, both with their bastardchild TicketsNow and possible purchase of LiveNation, is getting a closer look-see by more than just fans who are dependent on TM for their entertainment purchases. Re: ticket brokers - I've never purchased a ticket from one and can't see myself changing there.

 

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Zen Peach



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  posted on 2/4/2009 at 12:20 PM
quote:
To me brokers should only be used as the last possible resource.


When is that? When you want to go to a show that is either sold out or to get good seats?

quote:
What is their purpose other than to rip off the bands and the fans? They provide no legitimate function except to inflate prices and then that money does not go to the band or the venue.


Their purpose is to make money. The function that they provide is getting tickets to those that want them because the show is sold or or some want good seats.

This only works if people pay them the outrageous amounts that they ask.

quote:
I generally refuse to buy a brokers ticket except for serious need. I may have to break down for the Dead at MSG.


After all that you say against them then you state that you will buy them. As for serious need, there is none. It is a concert and hardly a serious matter. To break down and buy tickets for the Dead is exactly what they want. I am sure they will appreciate your business and money.

Don't mean to pick on you Angela but that post was pretty funny. You bought from them last year I believe also. You are a customer and by buying from them you are supporting them 100% regardless of anything that you post. Face the facts and admit to supporting them. You either buy from them or you don't. Personal justification is only trying to make yourself feel better about it. Every buyer has their reasons for doing so.

There will always be scalpers (brokers) as long as there is demand for entertainment. It is most likely the second oldest profession in the world.

As for the band or promoter getting their share, they already are with the high priced tickets to begin with. Some would like to believe that the artists care. They don't. Butch tried to put it politely but what he was saying was "I can't stop it nor will I even try.". Why should he? Bands get their cut and bonuses for sellouts. The agencies help sell out those shows. If the broker gets stuck with tickets then the artist could care less because it is still a sellout.

Funny how people will bitch about a service charge but of $10-$15 but overlook the $150 ticket. They are all laughing all the way to the bank.


 

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  posted on 2/4/2009 at 12:52 PM
"There will always be scalpers (brokers) as long as there is demand for entertainment. It is most likely the second oldest profession in the world."

Win the crowd, win your freedom

 

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