Music: March 2009 Archives

Secondary Ticketing Redux

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The other day I was talking about secondary ticketing and my despising of the general dishonesty of it all.

Well now Trent Reznor of Nine Inch Nails has explained the situation from a band's side of things. He doesn't like secondary ticketers, or "re-sellers" as they're known. Like me, he considers them touts, or scalpers in US-speak.

It sounds like NIN are doing their level best to avoid it, but the forces of exclusive agreements and venues means that they're limited in what they can do. In their instance, they get 10% of tickets for a fan pre-sale with per-customer limits and printed names on tickets which will need to match ID at the venue. Fans will use their own entrance for this check.

Live Nation and Ticketmaster are merging and he foresees an auction system taking place or market-based system a la airlines.

He says upfront that the demand for some gigs outstrips supply and therefore in a market system, ticket face values are under-priced. There are always fans who'll pay top dollar to get the best seats.

But of course the artist might not actually want the very wealthy getting all the best seats. Bruce Springsteen doesn't and raised merry hell recently when Ticketmaster sent fans through to their secondary ticketing outlet in the US Ticket Now. Madonna hilariously complained in her film In Bed With Madonna about the dull fans at the front. Then she does a deal with a secondary outlet for her next tour (or Live Nation) does meaning that only the very wealthiest of fans will be at the front. Of course, she's 50+ these days, so probably wouldn't get quite as many screaming fans up the front. But she can't moan if they don't want to get up and dance. They've spent a lot of money - and it's like sitting in a box at the theatre.

Over at Techcrunch, Michael Arrington disagrees. And of course in a purely capitalist system - he's right. If there's a market, then so be it if the best tickets command the very highest prices.

But if bands want to pursue that route, then some of their fans might voice their displeasure.

U2 tickets go on sale this Friday for their latest UK tour. They've promised a set number of "cheaper" £30 tickets for each gig. But their top price tickets are some in the high £160s! Really. And I quite expect those tickets to immediately get sold for even higher prices when they reach the Seatwaves and Viagogos of this world. Will U2 themselves profit? I don't know. At the moment I've only seen Live Nation and Ticketmaster as promoted sites. It's a fascinating subject, and one I still have strong feelings about.

Ane Brun

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Ane Brun (7 of 12)

For some reason - two weeks after I went to see the gig, I haven't mentioned that I saw Ane Brun at the always wonderful Union Chapel.

It was absolutely superb - it's really hard to explain how wonderful the sound was. Brun has a recent album out, possibly re-released recently with a couple of extra cover tracks.

Anyway, I can only recommend that you get hold of a copy of Changing Seasons.

And check out the session she did for Geoff at Absolute Radio.

Secondary Ticketing

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What a foul expression "secondary ticketing" is. It's the terminology used to refer to those sites that let the "fans" resell their tickets.

Sites such as Seatwave and Viagogo allow you to buy and sell tickets safely and securely. They've grown out from the eBay ticket selling business. But are they really for the "fans"?

Seatwave calls itself the "fan to fan ticket exchange" while Viagogo offers "real tickets for real fans."

But this is just formalised touting. Undoubtedly you have more recourse to buying duds and fakes than perhaps you would on eBay, but the sites would have you think that they're doing the fans a service.

They're not. They're letting everyone become a tout.

Case in point: Michael Jackson.

Jacko is about to embark on what we are told will be his final UK (or at least O2) tour, and more dates are being announced by the minute. At time of writing, there are 28 dates available.

Tickets are selling briskly even during the "presale" period open to people who've pre-registered their interest or are O2 customers. The general sale doesn't even begin until Friday via Ticketmaster.

Tickets have only been on presale for a day or two, yet a cursory glance at Seatwave reveals hundreds of tickets already on sale. Goodness - haven't a lot of fans been buying tickets and then realising they've inadvertently bought more than they need, or perhaps their purchase clashes with a holiday?

Of course they haven't. The "fan to fan" ticket exchange is allowing "fans" to sell on their tickets for several hundred pounds - well above the top price of £75 that's being charged.

Viagogo, if anything, is worse. That's because it's the official secondary ticketing outlet. The official site has a link to Ticketmaster and Viagogo for each date. Ticketmaster is there for "pre-sale tickets" while Viagogo is the outlet for the "fan to fan ticket exchange."

What this really means is that the promoters/Jackson is getting some of the backend of that secondary sales.

It's really annoyed promoters/artists that they're not getting a piece of that backend, and suddenly secondary ticketing outlets are allowing it.

I'd like to know whether Viagogo, as was the case for the upcoming Madonna tour, is actually selling a batch of tickets that were never made available for public sale at all.

If an artist wants to essentially auction tickets to the highest bidder, then that's fine, but be honest about it. Say something like "all the best tickets will be sold to the highest bidder."

But of course an artist who says that is a brave man or woman.

Another option is the premium package with hotels, top seats, pre and post drinks, and perhaps even "meet and greets". But at that's all up front. If one of my favourite groups does that I might think: wow what a great opportunity to meet my favourite artist - something I'd never otherwise get the opportunity to do. Or I might think: cash in...

Of course "live" is where the action is these days. And given the decline in recorded music sales, maximising that revenue is fine. But be honest about it.

Secondary ticketing really is no better to me than the guy outside the venue. I might have slightly more of a guarantee that the ticket is genuine, and I'll happily concede that internet rip-offs are a massive problem.

A recent Word Magazine podcast addressed this to an extent and mentioned that the FT's Undercover Economist Tim Harford had addressed this problem recently and had summised that from an economic point of view, artists simply weren't charging the market prices. If they were, then many tickets for a concert series like this would be in the multiple hundreds of pounds.

I guess that the airline ticketing model is an interesting one with elastic pricing adjusted according to demand. Of course, there's not a great market in me selling my 1p Ryanair flight on to someone else the day before the flight who might otherwise have to pay £100. Airlines tend to charge if you want to change a name, and they probably wouldn't be happy with me putting my ticket on eBay.

But if an artist is honest, then perhaps these foul sites wouldn't exist.

[UPDATE]

I see that the Michael Jackson site now titles the two ticket purchasing options as "Ticket Option 1" and "Ticket Option 2".

I'd still be very curious to learn the details of this deal - especially as there are now upwards of 50 concerts being sold.

YouTube and PRS

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Wherever music collection agencies and internet sites exist, there are problems.

The latest disagreement is the very public falling out between Google, owners of YouTube and PRS the UK collection agency. And when that story reaches the Ten O'Clock News, you know that it's a significant one.

When thousands of music videos start to disappear from YouTube, you know they have a serious disagreement.

My natural inclination is to think it's the music companies being stupid and to side with YouTube, but nothing's ever quite that simple.

It's clear from what PRS is saying that Google has decided unilaterally to pull the music videos:

PRS for Music is outraged on behalf of consumers and songwriters that Google has chosen to close down access to music videos on YouTube in the UK...

This action has been taken without any consultation with PRS for Music and in the middle of negotiations between the two parties. PRS for Music has not requested Google to do this and urges them to reconsider their decision as a matter of urgency.

I can't find a Google press release - only what they've said in news stories. [UPDATE] The YouTube statement is here.

Our previous licence from PRS for Music has expired, and we've been unable so far to come to an agreement to renew it on terms that are economically sustainable for us. There are two obstacles in these negotiations: prohibitive licensing fees and lack of transparency. We value the creativity of musicians and songwriters and have worked hard with rights-holders to generate significant online revenue for them and to respect copyright. But PRS is now asking us to pay many, many times more for our licence than before. The costs are simply prohibitive for us - under PRS's proposed terms we would lose significant amounts of money with every playback. In addition, PRS is unwilling to tell us what songs are included in the license they can provide so that we can identify those works on YouTube -- that's like asking a consumer to buy an unmarked CD without knowing what musicians are on it.

Now perhaps Google believes that those negotiations were going nowhere which is why they've pulled the videos. Google is big and powerful enough to be able to do that and the record companies are the ones who are most affected by the fallout.

It's not in the interests of record companies to have their music unavailable at YouTube. It's the go-to place for finding a song or video that you suddenly have an urge to see. Think of artists with albums coming out in the coming weeks. If I was a record company I'd have the video of any singles or songs from that album up there and would be watching the stats very closely to see how the buzz was. How many plays is the song getting? And so on...

I'd have thought Michael Jackson's people would be closely watching the video play stats for his music right now as well to see how well his O2 concerts are likely to go down.

For the record industry, YouTube is important, in the same way that radio's important. Of course the collection agencies want to maximise their revenues from these outlets, particularly in light of an overall declining market, but playing Russian Roulette with Google is a dangerous game. These negotiations are big, and they've seemingly gone on for months.

Like iTunes, YouTube is an important arena where record companies are essentially held over a barrel - they are nearly completely reliant on others. And basically YouTube still costs Google lots of cash rather than being a cash cow.

Could the record companies set up their own platform for their videos? The must-visit destination for music videos? They could. It's not too late. Ironically, they might get stung my the Competition Commission if they did and locked out others (as Project Kangaroo recently discovered). But as sites like Hulu in the US has discovered, if you have the right mix, people will come. Include all the features that YouTube has like allowing embedding, including adverts (ironically, Google is the biggest player here), and links to allow you to actually buy the music or videos alongside (something YouTube's only recently really added in). You might be able to get a replacement service into the wild.

Fundamentally, YouTube is still costing Google rather than generating significant cash, and as such they don't want to pay very much for their music videos. PRS is trying to maximise revenues for its members as CD revenues fall faster than digital revenues make up for it.

Catch 22.

Seeing how it pans out will be interesting.

[UPDATE]

A nice piece by Mark Mulligan, better worded, but arguing similar points here. But he also addresses the issue that Google wants to know exactly which artists PRS represents.

As Mulligan notes, this whole arena is getting very fragmentary, and not every musician is represented by PRS in every arena.

Indeed there are some very interesting developments at a European level that may mean that going to a different collection agency altogether is an option.

Of course if Google is to pay for every play of every song on their system, then it's only fair that PRS lets them know precisely which ones it should be earning cash from and which it shouldn't.

[UPDATE 2] Amended further to include a link to the YouTube statement on the disagreement as well as quotation from that statement.

About this Archive

This page is a archive of entries in the Music category from March 2009.

Music: February 2009 is the previous archive.

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