Music Business

The TaylorMaster: Deep thoughts on a broken live music biz [Bill Werde]

The Taylor Swift Ticketmaster debacle has brought to the forefront a truth that insiders have known for years – touring and particularly ticketing is broken. Bill Werde looks at the problem, its roots, and the potential – with a nudge from The Incredible Miss Swift – to fix it.

by Bill Werde

A version of this essay first appeared in his free, weekly Full Rate No Cap email. Werde is a former Billboard Editorial Director and Director of The Bandier Program for Music and the Entertainment Industries of the Newhouse School of Public Communications at Syracuse University. Taylor Swift played the Billboard cafeteria for Werde and a small handful of other editors when she was 16 years old and just starting to break.

Taylor Swift’s on sale for her blockbuster Eras tour was a fiasco that underscores what we all seem to know about the live music industry: it’s broken, like every bathroom stall in a cheap, crowded club. 
 
Millions of fans waited, some for hours, in opaque digital queues for the privilege of buying tickets. And while many succeeded—Taylor sold two million tickets in a day, the most ever in Ticketmaster’s history—others were inexplicably dropped from line, and many were left empty handed. And of course, within minutes, the precious tickets were on secondary sites like Stubhub and Seatgeek, often for thousands of dollars. To say that social media was full of agonized fan posts would be to undersell the drama.  Now, in the past two days, the news has been coming fast and furious. Ticketmaster, anticipating rabid demand, canceled the on-sale for remaining tickets that was scheduled for Friday, after roughly 90 percent of available tickets sold during presale. And The New York Times is reporting that the Justice Department has opened an antitrust investigation into Live Nation Entertainment.
 
All of this has opportunistic, sorry, I mean doubtlessly well-intentioned politicians joining disgruntled fans in airing grievances via social media and press releases. As Glenn Peoples cleverly notes in his excellent, big picture analysis of this mess (Billboard, subscriber-only), “Ticketmaster is one of the few non-partisan issues in America in 2022.” There are calls to unwind the 2010 merger of Ticketmaster, the world’s biggest ticket seller, and Live Nation, the world’s biggest concert promoter. Reportedly, the Justice Department investigation is focused on whether Live Nation uses their content (ie the artists whose tours they are promoting and careers they are managing) as leverage to convince venues that they must use Ticketmaster and not a competitor.
 
Let’s dive in.
 
PRICING (OR: WHY TAYLOR SWIFT SEEMS TO WANT ALL OF YOUR MONEY)
 
Most of the problems that fans experienced on Tuesday could have been fixed with solutions that currently exist. Let’s talk pricing first. Ticket prices have skyrocketed, with face value costs up nearly 20 percent from pre-Covid rates. And that’s not even factoring in the exorbitant price hikes that many fans end up paying on secondary market sites like StubHub and SeatGeek. It’s unsettling when blue collar hero Bruce Springsteen wants thousands of dollars for one ticket. Taylor tickets are predictably selling for thousands of dollars on secondary sites now.
 
Demand is why tickets are so expensive, and why sometimes fans can’t get tickets at all. Thursday morning, Ticketmaster issued some guidance about the Taylor sale, noting that the two million tickets sold were the most ever in a single day. Ticketmaster also shared this sobering math, based on the volume of traffic they experienced: “Taylor would need to perform over 900 stadium shows (almost 20x the number of shows she is doing)…that’s a stadium show every single night for the next 2.5 years.”

The past few years, secondary market sites like Stubhub and Seatgeek have made one thing clear to the managers and agents of touring stars: they’ve been dramatically underpricing tickets by free market standards. If Taylor puts face value tickets in the marketplace for $200, and they are immediately selling for thousands of dollars on Stubhub, the Stubhub price is the true market value. This is the logic behind Ticketmaster’s “Dynamic Pricing”—a data-based, promoter-set, fluid approach to pricing that reflects market demand.  These were the Springsteen tickets that were selling for thousands of dollars.

I want to say this once and for all, because it gets so twisted on social media and by the masses: when primary concert tickets are expensive, that’s because your favorite artists want them to beIf artists wanted to set low prices and stop the secondary market, they could basically do it tomorrow. How do I know this? Because at least one artist already has. Pearl Jam remains one of the world’s most enduring touring acts, regularly filling arenas. When they put their recent Gigatour concerts on sale, they used a combination of Ticketmaster’s Verified Fan technology and their own Ten Club fan membership to sell tickets that limited resale, and went to the longest-standing members of the fan club first. If fans wanted to resell, they could only do so at face value, and only on a fan-to-fan Ticketmaster platform called “Face Value Ticket Exchange.” The results? Outside of a small handful of states that ban the sale of non-transferrable tickets, scalping fell virtually to zero. Pearl Jam sold their tickets to fans at the prices that Pearl Jam deemed acceptable. Yes, the same Pearl Jam whose complaints led to a mid-’90s Justice Department investigation of Ticketmaster is now working with Ticketmaster and succeeding in creating a uniquely positive fan experience. 

Ironically, Congress, in a very Congress-y approach, has tried to pass legislation that would remove an artist’s ability to limit resale—literally the only approach that has ever worked to keep prices at the levels that artists intendThe BOSS Act of 2019 proposed a Federal ban on limiting resale. Bill Pascrell, Representative from New Jersey and the principal sponsor of the BOSS Act, continues to press for this point. His dismissal of Pearl Jam’s concerns about this issue in 2020 was a tour du force of smug condescension. But he and others who think like him are critically misguided. Are some fans annoyed or inconvenienced by only being able to re-sell their tickets at face value and on specific platforms? Sure. Does that pale dramatically in comparison to empowering scalpers to limit supply and (over)charge for the subsequent demand? Of course it does.

But it may not matter. Artists are beginning to get surprisingly comfortable letting their fans know that they want top dollar. Springsteen addressed and owned exactly this today, in an interview with Rolling Stone. Said The Boss: “We have those tickets that are going to go for that [higher] price somewhere anyway. The ticket broker or someone is going to be taking that money. I’m going, ‘Hey, why shouldn’t that money go to the guys that are going to be up there sweating three hours a night for it?’ It created an opportunity for that to occur. And so at that point, we went for it. I know it was unpopular with some fans. But if there’s any complaints on the way out, you can have your money back.”

This is called capitalism. Why do we feel betrayed and outraged when a high-demand artist asks for market value for seats at a concert, but we understand that we pay premiums to buy airline tickets for holiday travel?

There’s an answer to that of course, but it’s emotional, not logical. Fans form deep, human attachments to their favorite artists. They give them head space and heart space and in some cases, plan parts of their lives around these artists. No one wants to think of that connection as transactional. Honestly, Springsteen’s response feels callous and greedy, even to me. And i generally support free market pay for artists. He just doesn’t have to be so glib about it. The grave Springsteen is dancing on is the very idea that live music is in any way egalitarian. The numbers are the numbers, and what they point to is the continuing movement of concerts into the realm of the “haves,” and out of the realm of the “have nots.” 

If artists don’t like this, they can use Pearl Jam’s approach–as long as Congress doesn’t ban it.

FEES (OR: WHO GETS WHAT WHEN YOU GET ROBBED)

The one part of ticket prices that artists cannot control are fees. But again, while the narrative/angry mobs on Twitter blame Ticketmaster for this, I believe this is at least somewhat misdirected. Ticketmaster offers this explanation of fees on their site, and it is predictably opaque. But I spoke with two different executives who told me that clients set most of the fees, and that in many cases–particularly for large shows–as much as 80 percent of fees are going to venues. Music fans would benefit from a lot more transparency in this area. For starters, “all-in” ticket pricing, where the price you initially click to buy is what you pay at checkout, should be Federal law; New York passed all-in legislation this Summer. But the recipients of the fees should also be public. 

TECH PLATFORMS AND COMPETITION (OR: WHY CONGRESS & THE JUSTICE DEPT MIGHT SCREW THIS UP)
 
The biggest issue on Tuesday was the failure of the tech platforms and not the pricing. Some have suggested that a more competitive marketplace would lead to better tech options that can do a better job selling tickets. Maybe that’s true, although it’s fair to note that five of Taylor’s 52 shows were sold by SeatGeek, and not Ticketmaster. Reports show that SeatGeek had very similar problems to Ticketmaster: impossibly long queues, fans being dropped from their waiting spot, and site delays due to unprecedented traffic and bots.
 
It’s pretty obvious that putting 52 dates on sale at once is an unnecessary stress to any tech platform. But again, the artist has this control. Taylor took to Instagram today to point the finger at Ticketmaster: “I’m not going to make excuses for anyone because we asked them multiple times if they could handle this kind of demand and we were assured they could,” she posted. But I was told by a source close to the tour that Taylor’s management was advised to stagger sales. But they wanted the big splash. End result? Her fans suffered. Should Ticketmaster, SeatGeek and others be able to handle this sort of traffic better? Probably. Would more competition help this happen? Unclear.
 
Consider this: SeatGeek launched as a digital-first company, and doesn’t seem to be stifled as competition, recently taking on $238 million in private equity investment at a company evaluation of a billion dollars, and announcing that they are the frontline ticketing partners for a slew of professional sports teams and many of the concerts in those stadiums. And their service crashed under the weight of just five Taylor shows. SeatGeek’s rapid growth would also seem to poke a hole in the Justice Department’s premise: plenty of teams and venues are willing to ditch Ticketmaster. 

In fact, while it’s difficult to pin down market share for ticketing companies, the evidence is that Ticketmaster’s has been declining. 

In recent comments to NPR, Live Nation CFO Joe Bechtold said that Ticketmaster’s market share was 30 percent. Even Ticketmaster’s most venomous critics assert that Ticketmaster controls 70 percent of the primary ticketing market. This larger number would still be approximately 15 percent less than the 83 percent market share that Ticketmaster and Live Nation combined to generate at the time of the merger (linked graphic from independent journalist Judd Legum): 

And some more imperfect evidence that Ticketmaster faces actual market competition: app installs in the United States. Over the past few years, you can see that quarter after quarter, roughly half the market of app installs is going to Ticketmaster competitors. To be clear, this is not at all the same thing as saying that half the primary ticket market is Ticketmaster competitors; many of these downloads are likely for secondary tickets. But this does speak to traction with consumers. None of this means that Live Nation isn’t doing exactly what the Justice Department is investigating. But it does seem to raise serious questions about the strength of a possible monopoly.

If Congress actually wants to be helpful, there are some legislative solutions that would protect fans. Create a bot act with teeth. Put caps on scalper pricing; the UK has done this (check the work by FanFair Alliance) and early results are promising. Make service fees transparent—let fans know who (the artist, the venue or the ticket seller) is taking what percentage of fees with each purchase. Mandate all-in pricing so that the advertised cost of a ticket doesn’t suddenly jump when it comes time to check-out. And more than anything, do NOT prevent artists from limiting resale. This will empower them to have the final word on ticket pricing.
 
I get that everyone wants to throw their angry torches on Ticketmaster, but in at least a small part it’s because the company has been providing cover for artists’ money grabs for years. It smacks of irony and groupthink that Taylor fans literally have #WeLoveYouTaylor trending on social media, post after post pointing fingers at Ticketmaster, when Taylor could have made different choices to create a better experience for fans.

I’d like to think that if more fans were educated that their favorite artists can control almost every aspect of their ticket-buying experience, then artists might make better, more fan-friendly choices.  Without secondary markets jacking up prices, and with much more transparency on fees, artists will be forced to acknowledge that it is them, and no other scapegoat, who is charging fans. But Springsteen changed the game today, in a dark, legacy-altering way way. He made it clear that he won’t apologize for wanting every dime that the free market supports. If that means Springsteen shows go only to the wealthy, as opposed to diehard fans, well, Springsteen and other artists who choose this path make clear: they don’t care at all. The question remains, as the reality of this picture comes into focus: will the fans?

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