Price adjustments on Stones shows in L.A. and elsewhere reflect a “flex pricing” strategy and attempts by promoter AEG Live and the Stones to keep tickets out of the hands of brokers, according to John Meglen, co-president of AEG Live subsidiary Concerts West, promoter of the Stones’ 50 & Counting tour.
Meglen adds that reports of deep discounting and sluggish sales are inaccurate, and the shows are coming off well. “It’s unfortunate in our business that everybody wants to be cynics,” he tells Billboard.biz. “The fact is, the tour is doing great and we have no problems whatsoever.”
The tour is on a pace to gross close to $100 million from 18 shows. Meglen, calling from the Oakland airport following the second of two Stones sellouts in the city, says that, as opposed to discounting (Meglen has long expressed his distaste for the practice), certain tickets in the lower bowl are “flex priced,” going up at the top P1 price of $600 at on-sale and moving to the second tier of $450 when and if sales stall.
The strategy is designed to gauge what the market will bear for lower bowl seats and to keep those tickets off the secondary market by upping the risk and cutting into the profit margins for brokers. The practice is not new, particularly with the Stones, but this time out has the added dimension of the flex pricing element for tickets in the back half of the lower bowl.
“[Our] philosophy was, if we would’ve charged $200 a ticket for every seat in the house, everybody would have said, ‘OK, that’s fair.’ We’re selling 240- 260- degrees, about 15,000 tix (per), and that would have been about a $3 million gross [per show],” Meglen explains “But when you showed up that night, the actual gross would have been well over $5 million because of what the brokers got. So if I had 15,000 tickets out there at $200, if the brokers could take 6,000 of my seats that I charge $200 for and charge $750, that’s $3 million [per show]. Why should they get that money?”
In the current pricing model, brokers are still getting $750 for a $600 ticket, Meglen points out, and more than $1,000 for the best seats, but the band is capturing a larger percentage of face value. “We flex $450 [tickets] up to $600 on the on-sale,” he says. “When every single one of them doesn’t sell, you have to rescale some of them, there’s nothing wrong with that.”
Meglen says more than 20,000 $600 tickets sold in Los Angeles across the four shows. “Did we hit a point where we ran out of people that would buy at $600? Yeah,” he says. “But why can’t we do the ‘market value’ thing? Why do we have to let the market value proposition live with the scalpers? Why should, in my estimation, $3 million go to the brokers, instead of the artists, in every one of these markets?”
In another strategic move, 1,000 paperless tickets per show were available at onsale on rollingstones.com and the band’s social sites priced at $85, with those seats largely located in the upper bowl but “peppered” with prime seats in the GA “tongue and lips” pit up front. In L.A., production kills from the first shows were added to that mix, which “had nothing to do with our $600 tickets,” Meglen says.
So despite reports of mass discounting, “there are no $600 tickets turning into $85 tickets, I can assure you of that,” Meglen says. “We’re smart enough to know that you re-scale. And you know our feelings on discounting, we will not discount a ticket, and we’re holding to that.”
Meanwhile, Meglen says the intention of putting a dent in the secondary market is working. “Bottom line is we wanted to take the brokers out and get to what the real gross is in a venue,” Meglen says. “If you go on line and see what the brokers are selling tickets for, we took the lion’s share of the money from them, and we’re giving it to the artists. Personally, I want the brokers pissed off. I want that money going to the artists. And, by the way, we have not put a single ticket on the secondary market on this tour, and we don’t need to, because we went and took the brokers’ margin out, and that’s why they’re all screaming and making noise.”