Moderator: Marc Geiger William Morris Agency
Adam Friedman Nederlander of California
David Goldberg Ticketmaster
Nathan Hubbard Musictoday / Red Light Mgmt.
Bryan Perez Live Nation Interactive

A big topic at the February 15th Concerts 2.0: New Ways to Make Old Money panel was ticket auctions.

“People are out there paying ridiculously high prices to see live entertainment,” Dave Goldberg said in the panel’s opening minutes. “Oftentimes, they’re not paying it to the people who actually put on the shows. ... They’re buying it through secondary markets like eBay, RazorGator and (Web) sites like that.”

A couple of years back, a TM initiative was to create a system that allowed customers to decide what they’d be willing to pay for tickets in primary markets, Goldberg said. That way, the upside on the price stays in the industry and doesn’t go to a disinterested third party.

“One of the easiest ways I see for us to grow as an industry is for us to take the revenue that already exists in the secondary market and transfer it to the primary market,” he explained. “If we do that, we’ll probably have enormous growth this year and probably the year after, and we can all rest for a little while.

“The fans are already paying the money; they’re just paying other people that don’t have anything to do with our industry. So, you’re not asking fans to shell out money they’re not already paying.”

Adam Friedman said it’s also about appropriately pricing the entire house.

“What’s happening now, with talent cost being so expensive, we’re seeing very high prices in the first section of the house to cover that guarantee,” he said. “To also cover that guarantee, we’re pricing the back of the house
at much too high of a rate.”

As a result, shows don’t sell out, he explained. But if some concertgoers are willing to pay more for premium seating, that will allow for back of the house tickets to be cheaper.

“It’s a free market concept,” Friedman added. “Overall, the gross potential is going to go up, you’re going to have more turnstiles and the artist, promoter and venue are all going to be happier.”

But Musictoday and Red Light Management’s Nathan Hubbard said if the good seats are sold only at high prices, “real fans” might feel they can’t get a good seat. Goldberg agreed, saying, “You have to be careful on how you scale the houses, and how much inventory you allocate to auctions.”

In the end, both Friedman and Goldberg said their respective companies would focus heavily on the dynamic pricing model in 2006.

“We’re going to try and do as many as possible,” Friedman said. “It’s all about capturing the majority of the dollars that are associated with the ticket throughout its sale life.”

Other topics on “new ways to make old money” focused on the utilization of databases, fan sites and viral marketing.

Goldberg said that last year, TM sent out more than 1 billion e-mails to people in its database who opted to receive those communications, but warned that companies shouldn’t “pimp out your list.”

“You have to give these people something true to what they signed up to receive from you,” he said.

As far as fan sites go, Hubbard feels they aren’t as powerful as they ought to be.

“At the end of the day, does the fan want to communicate with Musictoday or Best Buy, or do they want to hear from the artist directly?” he asked. “We funda-mentally believe that the artist/fan relationship is more loyal, longer lasting and ultimately more profitable for everybody involved.”

Bryan Perez said that in this day and age, viral marketing is cheap and effective, suggesting that ticket buyers themselves can be used as marketers. He gave the example of giving a free ticket to a customer who can convince two of their friends to purchase a ducat. That way, each individuals’ information is entered into a database.

But overall, Perez said the concert industry has to take the time and try new business.

“This year, we should all throw a lot of ideas against the wall,” he suggested. “The consumer is the one who’s going to win every single time. They’re going to tell us what works and what doesn’t. All we have to do is try and cater to that.”