Bob Lefsetz: Live Nation/DOJ – CelebrityAccess

It’s not going to make ticket costs any decrease.

Assuming that Stay Nation and Ticketmaster are damaged up, or ticketing isn’t unique at venues. Ticket costs don’t have anything to do with Ticketmaster. If something, a treatment will assist different promoters, who will be capable to take part in ticket resale by utilizing one other platform. However for those who assume any change goes to trickle all the way down to the buyer, you’re delusional.

This isn’t as unhealthy because the Amazon Kindle motion, which resulted within the value of e-books GOING UP! Sure, below the aegis of aiding the buyer, the federal government f*cked the buyer. As an alternative of e-books being below ten bucks, they jumped 5 to 10 {dollars} when the mannequin was modified to an company format pioneered by Apple’s iBooks. And all these years later…iBooks has a sliver of the general e-book market. Amazon’s ecosystem was simply too good. And the Seattle firm had a primary mover benefit. You possibly can obtain e-books to your Kindle. Apple didn’t have a competing gadget. Though you possibly can obtain e-books to your iPad, the place you’d have an almost indistinguishable expertise between Apple and Amazon. Truly, I’d say the iBooks app on the iPad is only a tiny bit higher than the Kindle app on the iPad, however the enchancment is almost irrelevant. It’s akin to the battle between VHS and Beta. Though on this case, Beta, i.e. Apple, got here later. Backside line, folks now had an possibility to purchase e-books for a similar value at Apple and nearly nobody did. I don’t see Apple even selling iBooks anymore.

The silver lining was reserved for publishers, who needed the e-book lifeless. They didn’t like the truth that Amazon bought books for under wholesale, to construct a enterprise, to develop the general guide enterprise, regardless of paying wholesale value to the writer. E-books in lots of instances ended up costing as a lot because the bodily guide, and nobody may fathom that, similar to they’ll’t fathom all of the charges that include buying a live performance ticket.

All these charges exist so as to have a pot of cash that acts can’t fee, so the promoter and the ticket firm can revenue. And the soiled little secret is the acts even share within the charges whereas in lots of instances railing in opposition to them.

It’s good for the acts. They offer the impression that they’re on the followers’ aspect, in opposition to evil Ticketmaster, when in reality they love passing the blame for prime ticket costs, which they need and authorize, on to another person.

So that you hate the charges. With out the charges, there aren’t any reveals. Interval.

So let’s simply bake the charges into the general ticket value. Which Stay Nation has begun to do. Let’s be clear, it’s the acts who’ve resisted all-in ticket pricing as a result of as soon as once more, they wish to make it seem like it’s not their fault that the ticket value is excessive.

So let’s say we do away with unique constructing contracts. Then the constructing gained’t have that assured cash that goes straight to its backside line. That means they’re going to should get it someplace else, in any case it’s a enterprise. That means the cash’s simply going to be shifted round, however it can all be behind the scenes, and also you’ll find yourself paying the identical. Not a penny much less.

And also you hate the so-called Taylor Swift ticketing “debacle.” I hate to inform you this, however Ticketmaster is one of the best at what it does. Solely Ticketmaster has the computing energy to promote this many tickets. As for the glitches… Blame them on the bots, the secondary market.

And the secondary market has accomplished a genius job of selling. Convincing customers and lawmakers that followers personal the ticket and might do no matter they need with it. Sounds good in precept, however the finish result’s tickets within the secondary market are oftentimes astronomically priced. And the act doesn’t share in a penny of this uplift. So, acts are charging increasingly, what the tickets are actually price, so that they seize that cash. And the buyer complains. The identical shopper that likes the secondary market as a result of they know in the event that they’re prepared to pay the value, they’ll purchase a ticket on the final minute to any present.

If you wish to deal with excessive ticket costs, you’ve acquired to handle the secondary market. That may be a greater effort for the DOJ. However the unsophisticated public incorrectly believes Ticketmaster is chargeable for excessive ticket costs and due to this fact have to be hobbled.

As soon as once more, if one other promoter desires to make use of a unique ticketing firm, even their very own… That provides them many benefits. Primarily due to the uplift on resale. Sure, go to the Ticketmaster web site and also you’ll see that many tickets for reveals are being resold by the first purchaser. And Ticketmaster takes a share of that, even when it’s not a Stay Nation present. And the act decides whether or not to activate Ticketmaster resale or not. However there’s an enormous pool of cash there, and third occasion promoters are indignant they don’t have entry to it.

As for Stay Nation routing excursions to buildings the place they’ve ticketing contracts… That is hazy. They’ve already been slapped by the federal government as soon as for leveraging this relationship. Nevertheless it makes good enterprise sense. If in case you have the choice between two buildings, why not select your personal, the place you may make extra money? Stay Nation says it isn’t doing this, however how can one show this? You’ll be able to take a look at each date on each tour and it nonetheless may not be clear.

But when Stay Nation places a present in a constructing that has an unique contract with Ticketmaster, the corporate finally ends up making extra money.

Let’s be very clear, live performance promotion is a license to lose cash. Ensures are massive and margins are slim, which is why there’s not an enormous indie sphere. A nasty present or two can put you out of enterprise, whereas Stay Nation can endure a loss. Additionally, Stay Nation pays. It’s not the wild west, for those who make a take care of Stay Nation you’ll get your cash, in contrast to within the outdated days of money and weapons and…

So, if Stay Nation doesn’t have the benefit of Ticketmaster, that may make it a bit simpler for third events to bid for expertise. However Stay Nation can oftentimes nonetheless pay extra, due to sponsorship and different income streams. Some acts would possibly shift their excursions to a 3rd occasion, however that’s assuming the third occasion can pay them as a lot and is nearly as good. And for those who’re a growing act, Stay Nation would possibly even make you a deal for the longer term. You need to use that cash to your benefit whilst you develop your online business. The ticket value isn’t the one income stream. There’s merch, meals, parking… Nearly nobody goes to a present and pays for a ticket and nothing extra.

So, antitrust legislation is about making change to the benefit of the buyer. Nothing the DOJ can do will decrease costs for customers, NOTHING! Since you, the buyer, are prepared to pay the excessive costs to see your favourite acts. One individual would possibly keep at residence, however one other will pony up, in lots of instances even when they’re not wealthy. In any case, IT’S THEIR FAVORITE ACT!

So there will probably be hosannas within the market on Thursday, or each time the DOJ recordsdata their motion. Lastly, somebody is standing as much as Ticketb*stard. Nevertheless it’s a pyrrhic victory. As a result of Ticketmaster isn’t chargeable for excessive costs, not in anyway. As a matter of truth, Ticketmaster takes a de minimis quantity of the general charges.

As for charges which can be equal to the face value… I imply come on, you assume you’ll be able to see these main acts for twenty 5 or fifty bucks? It doesn’t make monetary sense. The act makes it seem like they’re doing the fan a strong and it’s Ticketmaster’s fault costs are excessive. However that’s full b.s. As soon as once more, with out the charges there isn’t a present, they pay for the promoter, the constructing, the staffing…the act doesn’t carry any of those with it.

So we now have to see what the DOJ is asking for. And no matter it’s, there’s no assure they’ll win. Stay Nation may decide on essentially the most advantageous phrases attainable or it may combat the motion in court docket, which may take years!

And in reality, ticketing is a low margin enterprise. Don’t anticipate a plethora of latest opponents to Ticketmaster, it wouldn’t be price efficient, there’s simply not sufficient cash in it.

So, there are true benefits to 3rd half promoters if Ticketmaster is separated from Stay Nation, or unique contracts with buildings are prohibited, however no benefits to the general public in anyway.

And the DOJ’s monitor file isn’t good. They’ll file, however it doesn’t imply they’ll win. Rulings should not based mostly on emotion, however legislation, statutes. There are burdens of proof, can the DOJ attain them?

If you’d like decrease ticket costs deal with the secondary market. Enable the act and promoter to regulate the ticket versus the fan. However the fan doesn’t need this. The fan desires to have the ability to resell their ticket and make a revenue. Somebody’s acquired to endure so as to carry ticket costs down. And Stay Nation and Ticketmaster should not the perpetrator.

Try Bob’s current look on CNBC’s Final Name: (begins at 5m)