Bob Lefsetz: Reside Nation/DOJ – CelebrityAccess

It’s not going to make ticket costs any decrease.

Assuming that Reside Nation and Ticketmaster are damaged up, or ticketing just isn’t unique at venues. Ticket costs don’t have anything to do with Ticketmaster. If something, a treatment will assist different promoters, who will be capable of take part in ticket resale by utilizing one other platform. However in the event you assume any change goes to trickle all the way down to the patron, you’re delusional.

This isn’t as dangerous because the Amazon Kindle motion, which resulted within the value of e-books GOING UP! Sure, below the aegis of aiding the patron, the federal government f*cked the patron. As an alternative of e-books being below ten bucks, they jumped 5 to 10 {dollars} when the mannequin was modified to an company format pioneered by Apple’s iBooks. And all these years later…iBooks has a sliver of the general e-book market. Amazon’s ecosystem was simply too good. And the Seattle firm had a primary mover benefit. You might obtain e-books to your Kindle. Apple didn’t have a competing system. Though you could possibly obtain e-books to your iPad, the place you’d have an almost indistinguishable expertise between Apple and Amazon. Truly, I’d say the iBooks app on the iPad is only a tiny bit higher than the Kindle app on the iPad, however the enchancment is almost irrelevant. It’s akin to the battle between VHS and Beta. Though on this case, Beta, i.e. Apple, got here later. Backside line, folks now had an choice to purchase e-books for a similar value at Apple and nearly nobody did. I don’t see Apple even selling iBooks anymore.

The silver lining was reserved for publishers, who wished the e-book lifeless. They didn’t like the truth that Amazon offered books for beneath wholesale, to construct a enterprise, to develop the general e book enterprise, regardless of paying wholesale value to the writer. E-books in lots of circumstances ended up costing as a lot because the bodily e book, and nobody may fathom that, similar to they’ll’t fathom all of the charges that include buying a live performance ticket.

All these charges exist in an effort to have a pot of cash that acts can’t fee, so the promoter and the ticket firm can revenue. And the soiled little secret is the acts even share within the charges whereas in lots of circumstances railing in opposition to them.

It’s good for the acts. They offer the impression that they’re on the followers’ facet, in opposition to evil Ticketmaster, when in fact they love passing the blame for prime ticket costs, which they need and authorize, on to another person.

So that you hate the charges. With out the charges, there are not any exhibits. Interval.

So let’s simply bake the charges into the general ticket value. Which Reside Nation has begun to do. Let’s be clear, it’s the acts who’ve resisted all-in ticket pricing as a result of as soon as once more, they prefer to make it appear to be it’s not their fault that the ticket value is excessive.

So let’s say we eliminate unique constructing contracts. Then the constructing received’t have that assured cash that goes straight to its backside line. That means they’re going to need to get it someplace else, in any case it’s a enterprise. That means the cash’s simply going to be shifted round, however it is going to all be behind the scenes, and also you’ll find yourself paying the identical. Not a penny much less.

And also you hate the so-called Taylor Swift ticketing “debacle.” I hate to let you know this, however Ticketmaster is the very best at what it does. Solely Ticketmaster has the computing energy to promote this many tickets. As for the glitches… Blame them on the bots, the secondary market.

And the secondary market has achieved a genius job of promoting. Convincing customers and lawmakers that followers personal the ticket and might do no matter they need with it. Sounds good in precept, however the finish result’s tickets within the secondary market are oftentimes astronomically priced. And the act doesn’t share in a penny of this uplift. So, acts are charging increasingly more, what the tickets are actually value, so that they seize that cash. And the patron complains. The identical shopper that likes the secondary market as a result of they know in the event that they’re prepared to pay the value, they’ll purchase a ticket on the final minute to any present.

If you wish to deal with excessive ticket costs, you’ve bought to handle the secondary market. That might be a greater effort for the DOJ. However the unsophisticated public incorrectly believes Ticketmaster is accountable for excessive ticket costs and subsequently should be hobbled.

As soon as once more, if one other promoter needs to make use of a distinct ticketing firm, even their very own… That offers them many benefits. Primarily due to the uplift on resale. Sure, go to the Ticketmaster web site and also you’ll see that many tickets for exhibits are being resold by the first purchaser. And Ticketmaster takes a share of that, even when it’s not a Reside Nation present. And the act decides whether or not to activate Ticketmaster resale or not. However there’s a giant pool of cash there, and third occasion promoters are indignant they don’t have entry to it.

As for Reside Nation routing excursions to buildings the place they’ve ticketing contracts… That is hazy. They’ve already been slapped by the federal government as soon as for leveraging this relationship. But it surely makes good enterprise sense. If in case you have the choice between two buildings, why not select your individual, the place you may make more cash? Reside Nation says it’s not doing this, however how can one show this? You may take a look at every date on every tour and it nonetheless won’t be clear.

But when Reside Nation places a present in a constructing that has an unique contract with Ticketmaster, the corporate finally ends up making more cash.

Let’s be very clear, live performance promotion is a license to lose cash. Ensures are massive and margins are slim, which is why there’s not an enormous indie sphere. A foul present or two can put you out of enterprise, whereas Reside Nation can endure a loss. Additionally, Reside Nation pays. It’s not the wild west, in the event you make a take care of Reside Nation you’ll get your cash, in contrast to within the outdated days of money and weapons and…

So, if Reside Nation doesn’t have the benefit of Ticketmaster, that can make it a bit simpler for third events to bid for expertise. However Reside Nation can oftentimes nonetheless pay extra, due to sponsorship and different income streams. Some acts would possibly shift their excursions to a 3rd occasion, however that’s assuming the third occasion can pay them as a lot and is nearly as good. And in the event you’re a creating act, Reside Nation would possibly even make you a deal for the long run. You should utilize that cash to your benefit whilst you develop your online business. The ticket value just isn’t the one income stream. There’s merch, meals, parking… Virtually nobody goes to a present and pays for a ticket and nothing extra.

So, antitrust legislation is about making change to the benefit of the patron. Nothing the DOJ can do will decrease costs for customers, NOTHING! Since you, the patron, are prepared to pay the excessive costs to see your favourite acts. One particular person would possibly keep at dwelling, however one other will pony up, in lots of circumstances even when they’re not wealthy. In spite of everything, IT’S THEIR FAVORITE ACT!

So there will likely be hosannas within the market on Thursday, or at any time when the DOJ recordsdata their motion. Lastly, somebody is standing as much as Ticketb*stard. But it surely’s a pyrrhic victory. As a result of Ticketmaster just isn’t accountable for excessive costs, not in any way. As a matter of truth, Ticketmaster takes a de minimis quantity of the general charges.

As for charges which are equal to the face value… I imply come on, you assume you possibly can see these main acts for twenty 5 or fifty bucks? It doesn’t make monetary sense. The act makes it appear to be they’re doing the fan a stable and it’s Ticketmaster’s fault costs are excessive. However that’s full b.s. As soon as once more, with out the charges there isn’t any present, they pay for the promoter, the constructing, the staffing…the act doesn’t convey any of those with it.

So now we have to see what the DOJ is asking for. And no matter it’s, there’s no assure they’ll win. Reside Nation may decide on probably the most advantageous phrases potential or it may combat the motion in court docket, which may take years!

And in fact, ticketing is a low margin enterprise. Don’t anticipate a plethora of recent rivals to Ticketmaster, it wouldn’t be value efficient, there’s simply not sufficient cash in it.

So, there are true benefits to 3rd half promoters if Ticketmaster is separated from Reside Nation, or unique contracts with buildings are prohibited, however no benefits to the general public in any way.

And the DOJ’s monitor document just isn’t good. They’ll file, but it surely doesn’t imply they’ll win. Rulings are usually not based mostly on emotion, however legislation, statutes. There are burdens of proof, can the DOJ attain them?

If you need decrease ticket costs deal with the secondary market. Permit the act and promoter to manage the ticket versus the fan. However the fan doesn’t need this. The fan needs to have the ability to resell their ticket and make a revenue. Somebody’s bought to endure in an effort to convey ticket costs down. And Reside Nation and Ticketmaster are usually not the wrongdoer.

Take a look at Bob’s latest look on CNBC’s Final Name: (begins at 5m)

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