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Ticketmaster
From Wikipedia, the free encyclopedia
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This article or section may contain original research or unverified claims. Please improve the article by adding references. See the talk page for details. (October 2007) |
| Ticketmaster | |
|---|---|
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| Type | Subsidiary |
| Founded | |
| Headquarters | West Hollywood, California, USA |
| Industry | Ticketing |
| Parent | IAC/InterActiveCorp |
| Website | www.ticketmaster.com |
Ticketmaster is a ticket sales and distribution company based in West Hollywood, California, USA, with operations in many countries around the world. Typically, Ticketmaster's clients (arenas, stadiums, and theatres) control their events, and Ticketmaster simply acts as an agent, selling the tickets that the clients make available to them.
One of the first ticketing companies to sell tickets on the Internet, Ticketmaster now sells a large percentage of its tickets online, some via phone, and a percentage through its many ticket outlets.
Ticketmaster has recently devoted significant resources to counter fraud and offers the usual variety of options available for consumer goods. Other technology includes barcoded tickets, which offers the ability for counterfeit ticket to be refused at the point of entrance.
Ticketmaster's market share remains over 50% of total sales for tickets in the United States. Despite the ready availability of web-based ticketing software, Ticketmaster continued to see revenue growth in 2006 & 2007.
Major League Baseball's acquisition of rival Tickets.com in 2005 marks the most significant organization moving away from using Ticketmaster's services.
Ticketmaster is currently owned by IAC/InterActiveCorp, but on November 5, 2007, IAC announce plans to spin Ticketmaster off into a publicly held, independent entity.
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Ticketmaster collects no part of advertised ticket prices. Instead it adds services fees to recoup its costs. Consumers often find these markups excessive, especially because there are many instances where no alternative purchase method is offered (allowing the purchase tickets without incurring fees). This seemingly unfair business practice, along with a dearth of competitors has lead many to view Ticketmaster as monopolistic. However, alternative ticketing companies have entered the marketplace, alleviating Ticketmaster's perceived "monopoly" brand status for most consumers. But because most of their competitors use much the same pricing structure, ticket buyers often find little comfort in the presence of Ticketmaster's competition. Not all events generate the same consternation. Many ticket buyers have the option of purchasing tickets directly from venue box offices, thereby avoiding service fees from any ticketing agent. The typical fees in addition to a ticket's face value include:
- Ticketmaster Service Charge
This is Ticketmaster's charge for the general service they provide and maintain. You will pay this charge no matter which way you buy the tickets through Ticketmaster (Phone, online or in person at a ticket center).
- Building Facility Charge
This is determined by the venue, and not Ticketmaster.
- Processing Charge
This is Ticketmaster's charge for processing your order and making the tickets available to you (mail, etc.) This is usually not a per ticket charge, but rather a per order charge.
- Shipping, E-Ticket Convenience, or Will Call Charge
Ticketmaster charges a fee for ticket delivery, even if the ticket is in the form of an automatically generated virtual "e-ticket", which buyers must then print out themselves, at their own expense. Buyers may also be charged an extra fee to collect the ticket(s) from the venue.
As an example of a fairly typical markup, a ticket to see Motörhead at Brixton Academy, London 2006, will cost £25, plus £3.75 per ticket service charge, plus £4.95 postage and packing per order. In this example, the fees are approximately an additional 35% of the cost of the ticket. Tickets to see the Westminster Dog Show in New York in 2007 are $40, plus a $10 "convenience fee", plus postage. More expensive tickets would have higher charges, but generally proportionately less relative to the total: tickets to see Pavarotti at Chatsworth House were selling for £85 for the ticket, £8 service charge per ticket, and £2.50 per order for either postal delivery or box office collection.
While 35% is typical, it can considerably more. Take for example, a $25.00 ticket to see Symphony X at the Pearl Room, just outside Chicago, has a $7.25 service charge, no option for will call or printable ticket, and $14.50 as the least expensive method of delivery. With the final processing charge of $2.40, this makes the total $49.15. With not even a "building facility charge" at the Pearl Room, this is a 97% increase in the cost of the ticket.
Another charging practice is Parking Fees and excessive shipping. Although Ticketmaster reports this as being charged by the vendor, this is rarely the case. One example of this being a $25.00 ticket to a 2007 Dream Theater concert at the Fillmore in Detroit, MI including an $8.60 service charge, a $9.65 shipping fee (the ticket coming in an envelope with a 23.5 cent bulk stamp), and a $5 parking fee at a venue that doesn't have parking.
Ticketmaster frequently obtains agreements to become the sole provider of tickets for large venues, in keeping with a business strategy it has used since the 1980s when it consolidated regional ticketing services into a single entity. In many cases, acquiring this exclusivity requires Ticketmaster to pay substantial "signing bonuses" to venues, sometimes millions of dollars. Although this practice can significantly reduce the profitability to Ticketmaster of these exclusive relationships, to date using these bonuses has enabled them to maintain venue exclusivity as a competitive strategy, though the future viability of this strategy is unclear as the Internet as the primary sales channel for tickets makes exclusivity a less attractive option for venues.
Ticketmaster is the subject of frequent complaints in the blogosphere and print media due to high ticket service charges. Notably, in the 1990s, Pearl Jam brought a lawsuit alleging that Ticketmaster is a monopoly, whose anticompetitive practices allow markup prices of more than 30%. Ticketmaster was found to be not guilty of violating antitrust law.
Competitors of Ticketmaster sometimes offer to charge lower service charges, or the ability for clients to keep more of the service charges for themselves. Competitors include Tickets.com, StubHub, TicketLiquidator.com and others. TicketWeb, a Ticketmaster subsidiary also offers lower fees. These companies are typically excluded from primary ticket sales for major-league sports events in the U.S. (with the exception of Major League Baseball, which, as noted below, is now the owner of number 2 competitor Tickets.com).
Ticketmaster is the primary ticket seller for 27 of the 30 NHL teams and 28 of 30 NBA teams, but in 2005, Major League Baseball acquired Ticketmaster rival Tickets.com. Some analysts[attribution needed] expect MLB to stop using Ticketmaster for the sale of its approximately 100,000,000 baseball tickets per year once current contracts with Ticketmaster have expired. Other event promoters are expected to follow suit, as Live Nation is gearing up to sell tickets directly through its site when their Ticketmaster contract expires. Thus, when the Ticketmaster contract ends finding sources for primary or "box office" tickets online may become a difficult task and vertical ticket search engines may become indispensable for finding primary ticket outlets.
Also of concern to the company is declining sales in the highly profitable concert business. Off by double-digit percentages in 2005 from 2004, the summer concert season is a major profit center for the company with its high per-ticket prices and accompanying high service fees.
Ticketmaster has had only limited success in the secondary ticketing market. In September 2003, Ticketmaster announced plans to sell tickets in Internet auctions, which would bring the price of tickets closer to market prices, but its market share compared to that of eBay or Stubhub remains small, and Internet auctions are still a relatively minor part of its business. Indeed, since around the time of the 2003 announcement, Ticketmaster has lost the lead in the secondary ticketing market to new entrants like Stubhub, who have developed a popular and effective person-to-person market for tickets. Recently, Ticketmaster President Sean Moriarty appeared on a story about the ticketing business on NPR and pleaded for legislation that would make the selling of tickets from person to person illegal except through Ticketmaster's own product for this purpose. Ticketmaster established the Ticketmaster Ticketexchange to try to compete with Stubhub, their main tagline being that tickets are 100% guaranteed to be authentic, since they are sold through the season ticket holder's account. (Some NFL teams require people to be on the waiting list in order to use the service. The New England Patriots, New York Giants and New York Jets require waiting list memberships.)
The company's use of personal information is more aggressive than most: a term that users wishing to purchase from their website must agree to is to receive Ticketmaster marketing:
"By completing this registration form you indicate that you consent to Ticketmaster sharing your email address and other information with those who provide the event, and that you consent to those who provide the event using your information to contact you by email or other means to send you marketing or other messages or using or disclosing your information in other ways. By completing this registration form, you also indicate that you consent to Ticketmaster contacting you by email or other means to send you marketing or other messages and using and disclosing the information you submit, as described in the Ticketmaster Privacy
This term is actually somewhat less aggressive than previously, following criticism [1] [2] [3] [4], and accusations of spamming. However, users of the site automatically receive a regular "My Account" email, which comes with the notice "By signing up to Ticketmaster you agreed to receive this email. If you do not want to receive it, you can edit your preferences on the site". In other words, Ticketmaster deliberately does not allow users to opt-out at signup from unwanted email in order to increase the audience for its marketing, and the unsubscribe procedure requires the user to login to a web page: there is no simple unsubscribe link or email address.
In 1994, the rock band Pearl Jam appealed to the Antitrust Division of the Department of Justice, complaining that Ticketmaster adopted monopolistic practices and refused to lower service fees for the band's tickets. At the time, Pearl Jam wanted to keep ticket prices under $20 for their fans, with service charges no greater than $1.80. The company had exclusive contracts with many of the large venues in the United States and threatened to take legal action if those contracts were broken. The Justice Department ruled in favor of Ticketmaster, which culminated in the cancellation of the 1994 Pearl Jam tour. Thereafter, Pearl Jam resumed their relationship with Ticketmaster as well. [5] [6] [7]
On April 28, 1997, Ticketmaster sued Microsoft over its Sidewalk service for allegedly deep linking into Ticketmaster's site. The suit was settled after a two-year legal battle in which Ticketmaster claimed that linking to specific pages on an Internet site without permission was an unfair practice.