Exclusive Q&A: Michael Rapino CEO of Live Nation on the Ticketing Crisis
Exclusive Q&A: Michael Rapino CEO of Live Nation on the Ticketing Crisis

A screen shot of Bruce Springsteen's StubHub page for his April 6 Madison Square Garden show where tickets ranged from $185 - $,4000.

There is a lot of frustration out there in the ticket buying world as thousands of fans virtually line up at primary sites like Ticketmaster.com for tickets to hot shows and, for a variety of reasons, come away empty handed. For many, that frustration increases exponentially when they see those tickets on secondary sites, often at prices several times face value.

Artists, fans, venues, promoters and ticketing companies like Ticketmaster blame certain ticket resellers for gumming up the works by hammering the primary ticketing sites with automated bots that cut "line" and shut out fans; selling "spec" tickets on secondary sites that they don't even have and might never get; and/or joining artist fan clubs or other pre-sale avenues to get choice tickets artists intend to go to fans and reselling those at a price much higher than the artist intended.

TO READ BILLBOARD MAGAZINE'S COMPLETE TICKETING PACKAGE PICK UP THE ISSUE HERE.

We spoke with Michael Rapino, CEO of Live Nation Entertainment, which owns Ticketmaster, about the problems concert fans are facing in buying tickets, and what his company is doing about it.

Read part two of Billboard's interview with Michael Rapino on Billboard.biz here.

Billboard.biz: When it comes to fans buying tickets these days, what's the problem as you see it?
Michael Rapino: This isn't just a Madonna problem, this is a general problem on all levels of shows. If you put a Kid Rock in a House Of Blues they end up on [secondary] sites. This is a technology challenge. There is this incredibly sophisticated network of scalpers or 'bots' as we call them, around the world who have figured out the price of a ticket may have a higher value on the secondary exchange. That's the over-riding economics driving the problem.

The core challenge is the bots are hitting the systems of all ticket buyers and all ticket companies and all shows and have been able to reserve seats and buy seats and put them on the exchange. If Kid Rock wants a $79 ticket going to a fan in a fair, direct manner, there's still going to be an immense amount of demand for that ticket, and a lot of consumers still may not end up getting a seat, but we'd like to make sure that the even if you couldn't buy a ticket, you had a damn good shot at getting a ticket and you were not competing against bots.

Billboard Power 100: Michael Rapino

For certain shows, there is enough demand without the bots where a lot of fans come away empty-handed, at least for the best seats.
Unfortunately we're in an industry that, unlike any other industry, we do not just run pricing of a product directly in correlation to market demand at all times. In any other industry if [a business] figures out a product can be sold at a certain level, they price it at that level. But we are in an industry where we work for the artist, and an artist has varying views, and balances the economics versus what he believes is the right price for his fan to pay, and that sets the price.

Whether we believe it should be a bit higher or not, that's the price the artist wants to deliver his fans, so our job is to figure out the most secure, legal, environment where their fans have a shot to get that ticket. The front row isn't five miles long, so we're not going to make everybody happy. But we've all learned that in life if you feel you have a fair shot at the lottery, if you don't win, you walk away disappointed, but at least believing you have a shot next time. Right now, all the illegal bots and the speculative selling are getting in the way of the artist-fan relationship and creating this whole new layer of a pissed off consumer that doesn't feel he had a shot at a ticket.

Confessions of a Ticket Scalper: A Candid Q&A

Do they wind up pissed off at the wrong people?
It's very frustrating. The ultimate end consumer doesn't see that bot sitting in Eastern Europe reserving seats and placing them on secondary. He just sees an artist's ticket not [available] at Ticketmaster, so he's mad at us, and can't understand why that other site does have the seat. There's mass confusion in the market as to primary versus secondary, and we have to work hard to bring tighter legislation and standards to give the consumer a fair shot at onsale at the price the artist wants. Many times it's going to be much lower than what the market can bear, but that's Bruce Springsteen's prerogative.

Artists know that the front row is probably worth a lot more than what they're selling them for, but they're trying to find that fine balance between the economics and the affordability to their fans. The end goal is for the artist to have all the control, and we want to be able to give them all the different ways they can price the house to meet all the different segments.

Does paperless ticketing hamper ticket reselling?
We think it is one tool that has now been proven. We know when we did it in New York versus New Jersey -- where in New Jersey we could do paperless and New York we couldn't -- you compare it a day later how many tickets were on the secondary site, it was 500 seats in New York where they didn't have paperless, and across the river at the Izod where they used paperless there was nine tickets, it was that kind of extreme difference.

CONTINUED ON PAGE 2

Questions? Comments? Let us know: @billboardbiz

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