Ticketing: A Statement From Live Nation's COO Paul Latham

04 Dec 2012

A keen contributor to music industry planned discussions Paul Latham was unfortunately unavailable to attend MusicTank’s ticketing summit 05.12.12.  He has kindly supplied this statement in lieu of his absence:

Promoters have argued for several years that secondary ticketing needs legislation.  The rampant proliferation of the secondary market has created a parasitic business for profiteers who have no investment in the music industry.

This creates a huge problem for those who have long-term interests in the financial stability of the business. If this high-tech touting prevails unchecked how do those, with juice in the game, either control it or take a piece of it?  Why should artists that put their creativity on display, or promoters that risk millions in artist guarantees, not try to harness some of that grey market?

It is a matter of fact that in the UK, Live Nation places less than 1% of its controlled tickets directly into the secondary market with one or other of the platforms.  Other than in the odd proprietary event these are invariably at the behest of artist management/ agents and settlement is in the same ratio as the artists contract. 

On the odd occasion (Kings of Leon notably), we have put considerably higher allocations across all platforms to dilute the price and mitigate profiteering.  On more occasions we have listed tickets at below face value as a form of dynamic pricing. 

The problem does not necessarily lie within the immediate control of artists/ promoters.  Every major on-sale sees primary ticketing company websites attacked by bots seeking to claim as much inventory as possible by these resellers.  It is no coincidence that minutes after a public on-sale, or indeed pre-sale, that the sold-out signs go up on primary sales and hundreds of tickets are posted on the secondary platforms.

Any home-spun theories by past Government officials that it is a free market and people must be able to resell their tickets if they cannot go to events is blown out of the water by the fact that more than 70% of these tickets posted are by “power-sellers”.  They have no other connection to the music business other than they are tech-savvy enough to gain access to vast swathes of tickets.

In some circumstances they post “futures” whereby they flog tickets they do not have in their possession, on the basis that if they get a high enough price they will eventually be able to source real tickets at a lesser price to serve their customer, if not they just stiff the customer and disappear into the ether!!

At least Get Me In, Viagogo and Seatwave have customer guarantees to provide the tickets. There are many more nefarious sites that use their lack of infrastructure and overhead to buy Google ad-words to push unsuspecting desperate fans to virtual extortion.

The technology does exist to make it harder for tickets to be re-sold, with non-transferable bar-codes rather than hard tickets, but at the moment that may not be the greatest customer experience, in particular at venue.

Those ticket companies that have worked with venues and promoters for many years, and are playing the long game, will improve security, both against the bots and in ticket distribution, but this can be at huge development cost and is sometimes difficult to justify while money pours out of the business due to the lack of supporting legislation.

We in the industry cannot be naïve to think that our customers wake up each day and think they must buy a primary/ secondary ticket…those are our terms.  The call to action and the passion derives from wanting to see their favourite artists/ festival and they have to be comfortable paying the price they can afford.

If we are to keep the prices affordable so that our audiences don’t just comprise of the “prawn-sandwich brigade” we need to find a way of keeping the money in the industry and letting those who do want to pay extra subsidise those that cannot who are the majority and are the lifeblood of our live music industry.  We are all in this together.

 

Paul Latham, COO International, Live Nation Entertainment