Ticketing
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Maybe Live Nation chairman Greg Maffei’s statement that Taylor Swift and promoter AEG “chose” to work with Ticketmaster for her calamitous onsale earlier this week should have come with an asterisk.
On Thursday (Nov. 17), Maffei attempted to correct criticisms about Ticketmaster and its owner Live Nation operating as a monopoly by pointing out that Swift’s 2023 Eras Tour “is not actually a Live Nation promoted concert” but rather “promoted by one of our largest competitors.”
Maffei — who is also the president of Live Nation’s largest shareholder Liberty Media — continued: “AEG who is the promoter for Taylor Swift, chose to use us because, in reality, we are the largest and most effective ticket seller in the world. Even our competitors want to come on our platform.”
The thing is, AEG says it’s essentially forced to work with Ticketmaster because of the stranglehold it has over the touring business. “Ticketmaster’s exclusive deals with the vast majority of venues on the Eras tour required us to ticket through their system,” an AEG spokesperson told Billboard in a statement. “We didn’t have a choice.”
The debacle centers around Swift’s presale Tuesday for her Eras Tour, which initially crashed shortly after launch as 14 million fans and billions of bots flooded the site, causing service disruptions. The ticket crash caught the attention of Capitol Hill. Rep. Alexandria Ocasio-Cortez and Sen. Amy Klobuchar, both of whom criticized the outage at Ticketmaster and doubled down on claims that the Live Nation-owned ticketing service was a monopoly. The Justice Department is now reportedly investigating Live Nation, though the investigation reportedly pre-dated the Swift debacle.
AEG and Live Nation have a complicated relationship built around intense competition and steady cooperation going back decades. While AEG’s facility group relies on Live Nation for programming, AEG Presents, the company’s concert promotion wing, competes directly against Live Nation’s global touring team and has its own preferred ticketing system, AXS.
While AEG Presents prefers to use AXS, their partner in the Eras Tour, Louis Messina (Messina Touring Group is a 50-50 joint venture between AEG and Messina), is basically agnostic when it comes to ticketing systems — he will work with any ticketing company, based on where the show takes place. In North America, that means working with Ticketmaster, which is especially dominant in the NFL as it provides tickets to 27 of the NFL’s 32 teams. By choosing to stage her show in NFL stadiums – really, in choosing to tour stadiums in the U.S. — Swift and her partners at AEG and Messina Touring Group are effectively forced to use Ticketmaster due to its supremacy in North America.
In that sense, Maffei’s argument that AEG chose to work with Ticketmaster is misleading, but it would also be inaccurate to describe Swift or AEG’s relationship with Ticketmaster as one built upon coercion. Historically, it’s been more mutually beneficial.
AEG’s venue management company ASM Global — formed following the merger of AEG Facilities and SMG in 2019 to become the biggest such company in the country — expanded its partnership with Live Nation in 2021, allowing the use of Ticketmaster for any of the shows the promoter brings to ASM’s 300 clients. In this arrangement, both sides win, since AEG relies on Live Nation to bring content to its buildings and grants the company incentives to entice shows to their facilities.
Swift has worked very closely with Ticketmaster over the years — for her Reputation stadium tour, the COVID-19-canceled Lovers Fest and now the Eras Tour, building an entire fan verification and Taylor Swift-branded ticketing platform together. While Swift might have preferred to have had more options to sell tickets to her fans, she did partner with the company in a way that few artists have in the past.
Perhaps Ticketmaster and Swift will mend their relationship once they start counting how much money they made together. Or maybe, they’re never, ever, ever, ever getting back together.
The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abbreviated version of the newsletter is published online.
Is Ticketmaster a monopoly that treats customers unfairly? Problems with Taylor Swift’s record-breaking The Eras Tour onsale this week has created choruses of complaints around the ticketing giant that have now led to a reported Justice Department investigation.
On Thursday, Sen. Amy Klobuchar sent an open letter to Live Nation CEO Michael Rapino detailing her “concerns about the state of competition in the ticketing industry and its harmful impact on consumers.” The problem, wrote Klobuchar, is a lack of competition “that typically push[es] companies to innovate and improve their services. That can result in dramatic service failures, where consumers are the ones that pay the price.”
Breaking up Live Nation and Ticketmaster wouldn’t necessarily have prevented this problem. It’s likely that any ticketing platform would have struggled with such a high level of demand. StubHub crashed in 2018 after University of Georgia fans flooded the site to purchase tickets to see their team play in the NCAA football national championship game — and that was just one game.
Ticketmaster blamed the outage on a surge of unregistered fans and billions of bots. According to the company, over 3.5 million people pre-registered for Swift’s Verified Fan credentials, the largest registration in its history. Typically, only a fraction of registered fans show up to buy a ticket. This time, “a staggering number of bot attacks as well as fans who didn’t have invite codes” resulted in 3.5 billion total system requests — four times the previous record number.
One could argue Ticketmaster could have been better prepared for such a high level of demand. Perhaps the company should Swift-proof the platform in anticipation of a flood of speculators and unregistered fans — Swift said Friday (Nov. 18) that her team “asked them, multiple times, if they could handle this kind of demand and we were assured they could.” Overall, problems on the platform are relatively rare given Ticketmaster’s volume of business, but we talk about them because they happen with high-profile concerts that attract large numbers of customers. Those attract the most attention and complaints online, which in turn attracts politicians. Ticketmaster is one of the few non-partisan issues in America in 2022.
Some observers have conflated the issues surrounding Ticketmaster’s market power, though. Rep. David Cicilline, chairman of the House Judiciary Committee’s Antitrust, Commercial and Administrative Law Subcommittee, wrote about the Swift on-sale that “excessive wait times and fees are completely unacceptable … and are a symptom of a larger problem.” It’s fair for Cicilline to suggest that Ticketmaster does not invest enough in its platform to avoid the technical issues and wait times Swift fans recently experienced. That’s debatable, but it’s a defensible argument.
Fees are, however, an entirely different issue. Ticketmaster is a pioneer in the area of ticket fees but does not have a monopoly on the ability to charge them. More competition in ticketing would not prevent venues and promoters from adding to the face value of tickets. The ticket purchase is an opportunity for all parties involved to capitalize on fans’ demand for live music. As Bruce Springsteen’s controversial leap into dynamic pricing showed, leaving money on the table is an increasingly uncommon strategy in the modern music business.
Ticket prices occasionally get dragged into the argument, too. Politicians and consumers seem to want a form of price competition that doesn’t exist. Prices for an in-demand concert ticket won’t necessarily become more affordable if they’re sold at, say, StubHub rather than Ticketmaster. The laws of supply and demand say that prices for in-demand, scarce objects like a Swift concert ticket are going to be high no matter who’s selling them.
So, what tangible results might come from the calamitous The Eras Tour on-sale? Sen. Klobuchar’s letter points to customers’ desire for fair access to concert tickets. She asked Rapino, “Generally, what percentage of high-profile tour tickets are made available to the general public compared to those allocated to pre-sales, radio stations, VIPs, and other restricted opportunities?”
Klobuchar wants to know what percentage of tickets the average person has a realistic shot at getting without being the customer of a particular credit card, without buying high-priced VIP packages, without winning a radio station contest or without being a member of an artist’s fan club. In this case, Capital One is a sponsor of the Eras tour and offered a pre-sale to its customers.
But how do lawmakers regulate access? Do they establish rules that dictate what kind of marketing partnerships artists can and cannot establish? Would they tell American Express to stop giving such long-standing perks as pre-sale access and dedicated tickets to its credit card holders? If Congress really wanted to create a more level playing field for fans, they could do what the lawmakers in Victoria, Australia, did in 2021: pass a law that limits the resale value of a ticket to 110% of its face value. That could lower the number of resellers and bots clogging up Ticketmaster’s system for high-traffic on-sales like the Eras Tour. At the very least, price limits would bring a much-desired sense of fairness to the secondary market. Whether the U.S. Congress has the stomach to establish price controls on private companies remains to be seen.
A more likely outcome of the Eras Tour debacle is increased transparency. New York State legislators passed a law in June that improves transparency by requiring all-in pricing and prohibits revealing the ticket’s total cost — face value plus fees — after multiple clicks in a check-out process. The bill could have gone further: a requirement to disclose the percentage of tickets made available to pre-sales and VIPs was in an early form of the bill but not the final version.
But, again, are lawmakers willing to mandate such disclosures from private businesses? This would more likely be a voluntary disclosure done at the behest of the artist – Swift is exactly the kind of powerful artist who could persuade ticket sellers to reveal this information. Transparency wouldn’t immediately translate into greater access for the average fan, but it could fuel a larger conversation about how fans get access to concert tickets. That wouldn’t ease the pain of many Swift fans, but it would be a step forward.
A rebound in the live music business helped German concert promoter CTS Eventim improve its revenues to 694.4 million euros in the third quarter ($699.3 million at the average exchange rate in the quarter), 84% higher than the same period in 2019 before the COVID-19 pandemic, the company announced Thursday.
Revenue increased due to contributions from pre-sales, the staging of events and higher income from currency conversion. That was offset by a reduction in COVID-19 economic aide, received as compensation for event cancellations or events with reduced capacity, of 76.8 million euros ($77.3 million) from the prior-year period.
“These excellent results are testimony to the fact that our strategic initiatives are taking us from strength to strength following the post-pandemic restart of live entertainment,” said CEO Klaus-Peter Schulenberg in a statement. “Even in the face of new uncertainties caused by the high level of inflation and geopolitical factors, we will maintain this proven course in order to continue to drive our profitable growth, both at home and abroad.”
The live entertainment segment’s revenue was 563 million euros ($566.9 million) in the third quarter, up 103.6 from the same period in 2019, and 1.11 billion euros ($1.11 billion) in the nine-month period, a 42% improvement. Live entertainment EBITDA was 64 million euros ($64.4 million), about triple the amount in the same period of 2019.
The ticketing segment’s revenue improved to 137 million ($138 million) in the third quarter, up 28% from the same period in 2019, and to 339 million ($341.1 million) for the nine-month period, up 10.4% from 2019. CTS Eventim sold 17.2 million tickets in the quarter and 45.1 million tickets in the nine-month period, increases of 31% and 23%, respectively, from the pre-pandemic periods in 2019.
The company’s staff, including part-time workers, grew from 2,357 a year ago to 2,956 at the end of the third quarter.
The company sounded an alarm about rising costs stemming from higher personnel costs in security, catering and stage technology “induced by an increasing shortage of specialists in the event industry and at least temporarily higher demand due to the fact that both postponed and new events are currently being held at the same time,” it explained in its earnings release. The fourth-quarter results could be hampered by rising energy prices and a possible pullback of fan spending due to inflation’s impact on household purchasing power.
Still, CTS Eventim is going to have a record year in 2022. The company expects full-year revenue of 1.7 billion euros ($1.71 billion) and earnings before interest, taxes, depreciation and amortization of 330 million euros ($332.3 million). That would represent gains of 17.8% and 16.2% over 2019, which was a record year for CTS Eventim. The company’s tenor improved from a quarter ago, when management was unable to provide a precise forecast for 2022 “owing to uncertainty about the pandemic and the geopolitical situation going forward.”
CTS Eventim shares fell 0.3% to 56.00 euros on Thursday. Year to date, the share price is down 13%.
Executives at one of the largest independent ticketing companies in North America believe malware hidden inside a tracking pixel used for sending customers target advertisements was the source of two-and-a-half-year credit card skimming operation.
Company officials with See Tickets North America, a subsidiary of French entertainment conglomerate Vivendi, tell Billboard that criminals were able to operate a sophisticated credit card skimming fraud on See Tickets checkout pages. While See Tickets officials didn’t detail which events were impacted, the company is one of the largest ticketing sites for indie promoters in North America with clients that include Pitchfork Festival and Disco Donnie Presents’ Freaky Deaky festival, as well as venues like the Troubadour in West Hollywood, California.
Tracking pixels are typically used to identify customers and share information about the consumer with ad networks and other large technology companies. One popular use of tracking pixels in the events business is to serve ads to fans who visited a music festivals website but did not purchase tickets, in hopes of enticing them to make a purchase.
Company officials believe that an exploit in the pixel See Tickets was using allowed criminals to take snap shots of credit card transactions as they happened without having to break into See Tickets system or database. The malicious code first appeared on the site on June 25, 2019, about nine months before the COVID-19 pandemic forced the shutdown of the live entertainment industry.
“At See Tickets we take securing customer information very seriously and deeply regret this incident occurred,” Boris Patronoff, CEO of See Tickets North America, told Billboard in a statement. “We also understand how this may have negatively impacted on our clients and their customers. We conducted an immediate investigation as soon as the issue was discovered and communicated with clients and customers the moment it was possible to do so. We have since taken additional measures to further strengthen our security,.”
Company officials became aware of the security breach in April 2021 after being contacted by credit card investigators looking at fraudulent charges linked to purchases on See Tickets website site. Within days of being notified, the ticketing company hired two forensic investigation teams to investigate the breach. In January of this year, the malicious code was eradicated from the site.
Last month, See Tickets concluded its investigation and began notifying state law enforcement officials with the details of the breach. While See Tickets’ own customer and promoter data was not accessed during the breach, criminals were able to obtain details from credit card transactions including full name, address, card number, expiration date and CVV.
See Tickets says a majority of ticket buyers who used the site were not impacted by the breach and note that social security numbers, state identification numbers and bank account information was not exposed due to this incident, as they are not stored in its systems.
The breach is the second major hack of a ticketing company in five years. In 2018, hackers briefly took over the Ticketfly home page and took parts of the company offline for months grinding much of the independent music industry to a halt. Ticketfly users and client data were stolen during the attack and wound up on the dark web because of the attack.
LONDON — For live music executives, Monday’s (Oct. 24) appointment of Rishi Sunak as Liz Truss’ successor as U.K.’s prime minister brings a sense of urgency as the sector struggles to recover to full health after the devastating impact of the pandemic.
They are calling for Sunak, who served in Boris Johnson’s government as Chancellor of the Exchequer and will become the U.K.’s first British-Asian prime minister, to swiftly cut the sales tax rate charged on U.K. ticket purchases from the current 20% VAT to 5%.
At the height of the pandemic, Sunak lowered VAT rates to 5% to try and help boost advance sales. The tax cut lasted for eight months, before rising to 12.5% last October and then returning to its pre-pandemic level of 20% on April 1.
Live execs say that cutting VAT back to 5% will encourage ticket sales at a time when many people in the U.K. are experiencing a drastic reduction in disposable income due to soaring food and energy prices. Last month, inflation hit a 40-year high of 10.1% in the United Kingdom.
Jon Collins, CEO of U.K. live music industry association LIVE, says he hopes Sunak’s experience in the Treasury office “leaves him well placed to recognize the economic stimulus that would follow” a reduction in VAT on ticket sales. “Safeguarding gigs, festivals and venues while encouraging additional activity will bring benefits to town and city centers across the U.K.,” says Collins.
An immediate priority for the new prime minister — who officially takes up his post on Tuesday, following a meeting with King Charles III — will be restoring confidence in the financial markets, following Truss’ disastrously brief reign.
Last month, the pound fell to a record low against the U.S. dollar in the aftermath of Kwasi Kwarteng’s Sept. 23 mini budget, which spooked investors with its unfunded tax cuts — something Sunak warned about when he unsuccessfully competed in an earlier Conservative Party leadership contest this summer. Truss sacked Kwarteng as Chancellor on Oct. 14, precipitating her downfall. Almost all the tax measures he introduced have since been scrapped.
Sunak, a former hedge fund partner who married the daughter of an Indian billionaire, won the prime minister role after Johnson announced on Sunday he would not be running for the position. On Monday, Sunak’s only other rival, Penny Mordaunt, pulled out of the contest shortly before votes from members of Parliament (MPs) were due to be announced.
The markets calmed Monday with sterling broadly unchanged against the dollar and government borrowing costs falling as the interest rate on bonds dropped to 3.8%. (The rate was 5.17% in late September.)
“There is no doubt we face a profound economic challenge,” Sunak, one of Westminster’s wealthiest politicians, said in a televised address. “We now need stability and unity, and I will make it my utmost priority to bring our party and our country together.”
Michael Kill CEO of The Night Time Industries Association (NTIA), which represents more than 1,400 U.K. nightclubs and venues, says he will judge the incoming prime minister on his “actions not words.”
Kill says he hoped Sunak can “can address the current instability, uncertainty and begin a journey to build back consumer confidence for nighttime economy and hospitality businesses.” He echoed live executives’ demands for a cut to VAT and called for an extension on business rates relief (taxes payable on business premises, such as record shops and music venues). “Independent businesses will not survive without it,” Kill says.