Ticketmaster Auction Will Let Highest Bidder Set Concert Prices

[Dave Farber <dave () farber net>]

> Ticketmaster Auction Will Let Highest Bidder Set Concert Prices
>
> September 1, 2003
>  By CHRIS NELSON
>
>
>
>
>
>
> Three years after Ticketmaster introduced ticketFast, its
> online print-at-home ticketing service, consumers have so
> embraced it that the company now sells a half-million
> home-printed tickets for sporting and entertainment events
> each month in North America. Where ticketFast is available,
> 30 percent of tickets sold are now printed at home, said
> the company, which is by far the nation's largest ticket
> agency.
>
> But consumers - many of whom have complained for years
> about climbing ticket prices and Ticketmaster service
> charges - may be less eager for the next phase of
> Ticketmaster's Internet evolution.
>
> Late this year the company plans to begin auctioning the
> best seats to concerts through ticketmaster.com.
>
> With no official price ceiling on such tickets,
> Ticketmaster will be able to compete with brokers and
> scalpers for the highest price a market will bear.
>
> "The tickets are worth what they're worth," said John
> Pleasants, Ticketmaster's president and chief executive.
> "If somebody wants to charge $50 for a ticket, but it's
> actually worth $1,000 on eBay, the ticket's worth $1,000. I
> think more and more, our clients - the promoters, the
> clients in the buildings and the bands themselves - are
> saying to themselves, `Maybe that money should be coming to
> me instead of Bob the Broker.' "
>
> EBay has long been a busy marketplace for tickets auctioned
> by brokers and others. Late last week, for example, it had
> more than 22,000 listings for ticket sales.
>
> Venue operators, promoters and performers will decide
> whether to participate in the Ticketmaster auctions, Mr.
> Pleasants said. In June, the company tested the system for
> the Lennox Lewis-Vitali Klitschko boxing match at the
> Staples Center in Los Angeles. The minimum bid for the
> package - two ringside seats, a boxing glove autographed by
> Mr. Lewis and access to workouts, among other features -
> was $3,000, and the top payer spent about $7,000, a Staples
> Center spokesman, Michael Roth, said.
>
> Once the auction service goes live, Ticketmaster will
> receive flat fees or a percentage of the winning bids, to
> be decided with the operators of each event, said Sean
> Moriarty, Ticketmaster's executive vice president for
> products, technology and operations.
>
> Along with home printing, auctions are central to "a new
> age of the ticket," Mr. Pleasants said. In the second
> quarter of this year, tickets sold online, with or without
> home printing, represented 51 percent of Ticketmaster's
> ticket sales. The rest were sold by phone or at walk-up
> locations.
>
> Ticket Forwarding allows season ticket holders for several
> sports teams (including the New York Knicks, Rangers and
> Giants) to e-mail extra tickets to other users, with
> Ticketmaster charging the sender $1.95 per transaction.
>
> TicketExchange provides a forum for season ticket holders
> to auction tickets online. The seller and buyer pay
> Ticketmaster 5 percent to 10 percent of the resale price, a
> fee the company splits with the team.
>
> In the case of the ticketFast home-printing service, buyers
> pay an additional $1.75 to $2.50 per order, with the fee
> set by the event operator. Home printing has won converts
> among people who want tickets immediately, instead of
> receiving them by mail or a delivery service or having to
> stand in line at a will-call window.
>
> One satisfied customer is Brian Resnik, 29, of Tampa, Fla.,
> who says the home-printing fee is a bargain compared with
> the $19.50 that Ticketmaster charges for two-day shipping
> through United Parcel Service.
>
> But some other users, who praised the convenience of home
> printing, objected to being charged an extra fee.
>
> "It's kind of mind-boggling to me," said Joe Guckin, 41, of
> Philadelphia, who used ticketFast to buy tickets for a
> Baltimore Orioles home game last season. "You're printing
> up the ticket, on your printer at home, your paper, your
> ink, etc. - and you have to pay for that?"
>
> The company replies that home-printing consumers are
> helping to pay for the technology that makes the service
> possible.
>
> Ticketmaster has spent $15 million to $20 million to outfit
> almost 700 stadiums, arenas, theaters and concert halls in
> this country and Canada with bar-code scanners that read
> and authenticate the tickets and computers that capture
> information such as which seats are filled and which doors
> have the most traffic, Mr. Moriarty said. In 2003, the
> company has sold 400,000 to 600,000 ticketFast tickets each
> month.
>
> Some ticketFast customers, like Diane DeRooy, 52, of
> Seattle, complain that Ticketmaster assesses a lot of fees
> even before levying the print-at-home charge. A ticket to
> see Crosby, Stills & Nash on Friday at the PNC Bank Arts
> Center in Holmdel, N.J., for example, carries $13.80 in
> venue, processing and convenience fees, plus a $2.50 charge
> for the home-printing option. Without the fees, a ticket
> costs $30.25 to $70.25.
>
> Many of those customers are skeptical about Ticketmaster's
> plans to auction the best seats to concerts.
>
> "The band's biggest fans ought to have the best seats, not
> the band's richest fans," said Tim Todd, 47, of Kansas
> City, Mo., who used ticketFast recently to buy tickets for
> a concert by the rock group Phish. Ticketmaster would be,
> in essence, official scalpers, Mr. Guckin said, voicing a
> sentiment expressed by some other customers.
>
> Industry watchers agree that auctions will affect all
> concertgoers. Prime seats are undervalued in the
> marketplace, said Alan B. Krueger, a professor at Princeton
> University's Woodrow Wilson School of Public and
> International Affairs, who has studied ticket prices. He
> predicts that once auctions begin revealing a ticket's
> market value, prices as a whole will climb faster.
>
> Gary Bongiovanni, editor of the concert industry trade
> magazine, Pollstar, predicted that all ticket prices would
> become more fluid. After a promoter assesses initial sales
> from an auction, remaining ticket prices could be raised or
> lowered to meet goals.
>
> The notion of ticket auctions is annoying, Mr. Resnik said,
> but he is resigned to them.
>
> "I guess the capitalist inside me would say, `Hey, if
> that's what they can get for tickets, I guess that's just
> something I can't afford, like a yacht and a Learjet.' "
>
> http://www.nytimes.com/2003/09/01/technology/01TICK.html?ex=1063453157&ei=1&en=d69d6b00561269c7
>
>
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