Last week, Anschutz Entertainment Group (AEG) announced a global ticketing joint venture with Outbox and Cirque du Soleil. In an interview shortly after, Outbox co-president/CEO (and former Ticketmaster chairman) Fred Rosen told Billboard, “Most of these people fail in this business and have never competed well against Ticketmaster because they sell software as a solution, as opposed to being ticketing people who provide software solutions and have knowledge of the industry.” And while AEG chairman Tim Leiweke insisted launching the new ticketing operation was not a “shot across the bow of Ticketmaster,” it does seem clear that this new venture is set up to provide serious competition in the critical ticketing space and at the least will move AEG’s 10-12 million tickets per year to Outbox, much of it business now held by Ticketmaster. As Rosen puts it, “For the first time in 20 years there will be two serious competitors in the ticketing marketplace, with two distinctly different business models: one a white label model where the building is in control of their destiny and their data, and one a middleman model. This is just competition — no more, no less.”
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Ticketmaster was quiet last week, but yesterday, in an exclusive interview with Live Nation Entertainment chairman Irving Azoff, Billboard naturally asked him his thoughts on what the new competition means for LNE ticketing division and dominant industry player Ticketmaster. Here is what he had to say …
Billboard: How is Ticketmaster competing with all the new models and what would appear to be viable competitors like AEG/Outbox?
Irving Azoff: AEG is a very small part of our [ticketing] business. It represents less than 3% of a contribution margin from our ticketing segment. Outbox, I believe, has a long way to get to scale. We think it will take it at least a couple of years just to get near where we are today, and while they’re doing that, we’re going to be growing globally, and we’ll continue to add inventory worldwide.
My personal opinion is they and us have a very different view of the Web. History shows fans want consolidation, you see it across the web every place. The big players are people like Google, Amazon, eBay, Facebook. The great thing about Ticketmaster is that it’s seen as the comprehensive site for ticketing, artist information, venue information. We’re a marketing platform, not just a technology platform, and we’re going to build on it. From what I understand from all of these announcements, Outbox intends to be in the business of providing tools for venues. We think the game is really about who can sell more tickets. I don’t see how they separate themselves from the myriad of competitors that we already have. How are they different from Paciolan or Veritix, Tickets.com, Ticketfly or any of those sites?
What I don’t understand is, none of them are talking about how to market and sell tickets; they’re just talking about “we’re going to give you a site you can you run yourself.” I think running a bunch of individual sites is inefficient from a marketing perspective. Should every building have their own brand? Yeah, but it confuses fans. [Fans] just want to go on Ticketmaster and find their ticket. We’re about marketing, we’ve got unparalleled distribution, we’re the third largest e-commerce site in the world. We’re going to be in 1,100 kiosks in Wal-Mart by April. Our mobile app with Apple, they’re helping us redesign and fine-tune before we roll it out big, but they’re thrilled with that. Don’t forget, we have a 180-million name database.
We really have over the past year revolutionized the ticket-buying process. We have industry leading interactive seat maps; we have a Facebook integration that makes us one of the most social e-commerce sites on the Web. We’ve changed the rules around refunds, we now refund within three days; we’ve enabled the ability to see other products with the ticket, we’re just trying to fine-tune it, we want to get the shopping cart done right; we’ve changed the way fees are presented, which AEG and others have fought tooth and nail. We’ve done all this testing, all the consumers say is, “we just want to know what the real cost is.” And we’ve opened up the transactional API that powers distribution, from Wal-Mart to our new iphone app. We do tons of research, and at the end of the day fans’ satisfaction with the buying process at Ticketmaster is at an all-time high in the history of the company.
Billboard: You mentioned 180 million names — one of the points of contention for many is who controls those names.
Azoff: That’s a whole other interview! I’m just telling you we have 180 million names.
Billboard.biz will have lots more from our conversation with Irving Azoff all week – and look for even more in our in-depth Q&A appearing in Billboard magazine on Friday!