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SXSW Dispatch #6: The Ticket Master speaks, and debating ethics in the blogosphere

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AUSTIN, Texas —Truer words have never been spoken at a SXSW panel than when Wall Street Journal reporter Ethan Smith introduced Ticketmaster CEO and president Sean Moriarty on Friday afternoon as the head of a company that more than any other “makes music fans’ blood boil.”

Moriarty sat down for this rare public session at a time when his company — the dominant (some would say monopolistic) force in concert ticking for the last 32 years — is on the ropes, as Live Nation, the dominant (some would say monopolistic) force in concert promotion, ends its relationship with Ticketmaster and not only directly begins selling tickets to its own events, but to those of other promoters seeking an alternative to Ticketmaster. (Live Nation is 15 percent of Ticketmaster's business, Moriarty said.)

Even as Moriarty claimed that Ticketmaster is trying to enter a new era of transparency in its business practices, the embattled executive dodged direct questions such as “Why do Ticketmaster service fees cost so much?” by hiding behind an obfuscatory cloud of friendly but Orwellian corporate doublespeak.

Ticketmaster is “one of the most misunderstood well-known companies out there,” Moriarty said.

“I think any service business that charges a fee for services faces challenges. If you look at service fees for cable companies, for example, or banks’ ATM networks, people on one hand are pretty quick to criticize the price, but if you ask them if they’d like to live in a world without the access that they have to cable television or a world where they aren’t able to walk up to any ATM and take money out, they’d probably say ‘no.’ Our service is actually much more complex than people know.”

Fair enough: In the new millennium, it really is pretty amazing that we can log on and purchase tickets to an event anywhere in the world in a matter of a minute or two, printing those tickets out on our own computer (for an added “delivery charge,” of course). But that has never been the issue. At the center of consumers’ rampant dissatisfaction with Ticketmaster fees, which can add a third or more of the face price to each ticket purchased during one transaction, is the question of how much it really costs the company to provide that service, and the “pie chart” of how those fees are divided between the promoter, the artist, the venue and Ticketmaster.

Smith suggested that part of what Ticketmaster does is to act as the “bad cop” or “lightning rod,” absorbing customer anger at steep fees while sheltering the promoters and artists, who get to make extra money thanks to rebates (some would say kickbacks) of extra cash from the service fee. (In other words, the promoters and artists get to look like the good guys by charging one price on the face of the ticket while pocketing extra cash by also collecting a share of the service fee.)

Moriarty: “I would say that in a world where the brand and your experience in the business is everything, being a lightning rod is not a good service business to be in, because ultimately you’ve got to provide people with a safe and secure and comfortable experience. To the extent that we’re being used as a lightning rod, it comes to the detriment of our brand. That may have been true historically, but as we see the business today, that is not the right way to position the business in any way, shape or form.”

Nevertheless, Ticketmaster’s master declined to explain to Smith, just as he declined to explain when listeners including this reporter later questioned him, exactly how that dreaded service fee is broken down. I’ve been asking that question of a long line of Ticketmaster executives and public relations executives for 14 years now, and I’ve never gotten a clear answer.

“I don’t think it’s appropriate in a world where we’ve got 9,000 clients, Jim, to actually disclose the particulars of any individual client deal, and summarizing or making a sweeping statement is probably not something that’s appropriate, either,” Moriarty said. “You choose to bring it up as fodder for the same conversation over and over, [but that] doesn’t really get you very far. It’s easy to be redundant and it’s easy to talk constantly about rising prices, but it actually takes a little more work to understand the situation in full context.”

Gee, and here I thought that was what I was trying to do. So much for transparency.

Pressed by Smith on Ticketmaster’s plans to compete with major forces in the burgeoning market of secondary resellers (some would say scalpers) through its recent acquisition of Ticketsnow.com, Moriarty stressed that Ticketmaster is a “safe, secure and legal” name that ticket buyers can trust, as opposed to the unknown entities selling tickets on sites such as eBay, Craig’s List and Stub Hub.

“When people go to buy a ticket online, they should have confidence that they’re going to get exactly what they’re paying for,” Moriarty said. “They should have some understanding of the value of the ticket as opposed to just the posted price, and they should know if they’re actually buying tickets or selling tickets in a jurisdiction that actually has laws on the books [prohibiting that],” although all but a handful of states still do that, since resale laws have been altered to accept the realities of the digital age.

Smith asked Moriarty about charges that Ticketmaster has been furiously lobbying many states to change the laws so that only the original seller of the ticket — in many cases Ticketmaster — can conduct the auctions for reselling tickets.

“Our focus has been on a level playing field, and we actually believe the market should be an open market,” Moriarty said, expressing an admirable sentiment while dodging Smith’s question about lobbying. But Moriarty did say that Ticketmaster includes its clients in revenue-sharing of the income from reselling tickets — providing those rebates (some would say kickbacks) on service fees from secondary sales the same way it does from primary sales.

Resale is a $3 to $4 billion market on top of original ticket sales, Moriarty said, and he made clear that Ticketmaster hopes to dominate that market and forge ahead to a world where there are no set prices for tickets, with value fluctuating based on demand. “Ultimately, there’s an inevitability to any market, which is to say, you’ve got to let buyers and sellers trade freely in a way that’s unencumbered in a way to really maximize the market, and I think that’s where we’re going.”

Navel-gazing with the navel gazers

The other noteworthy panel Friday, a session called “The Blog Factor,” left as many questions unanswered as the Ticketmaster session. But this was only because the men and women behind the music blogs and Web sites that were represented—Sean Adams of Quietus Group/Drowned in Sound, Maura Johnston of Idolator, Amrit Singh of Stereogum and Jason Gross of Perfect Sound Forever—are trying to answer many of the same questions I posed in my recent interview with Pitchfork founder Ryan Schreiber.

Can blogs play by the rules of traditional journalism and criticism? Should they? And will they be compromised if they expand into other multi-media ventures, such as online video channels, choosing music for films, TV, video games or advertising, hosting music festival or starting record labels?

Gerard Cosloy, co-owner of Matador Records and one of the most extraordinary A&R men or talent scouts in rock history, joined musician and NPR correspondent Carrie Brownstein and the always even-handed moderator Gross to provide the voices of reason as bloggers looked in the mirror and admitted that they just don’t know the answers to those questions — yet.

“The notion of conflict of interest, I’m not sure how you even define that anymore,” Cosloy said. “But as long as there is ever the appearance [of a conflict] — for example, that if you don’t play my festival or buy an ad, you’re not going to get favorable coverage — there is always going to be that element. But it’s not just blogs [that have to deal with these issues].”

While we may disagree on the merits of Times New Viking, I believe that Cosloy and I are on the same page here: The more things change—in the shift of journalism from print to the Web, as in life in general—the more they remain the same. Journalists and critics have been talking about these issue since long before Gutenberg built his famous printing press. And they’ll be discussing them in the future when some new mode of communications (electronic telepathy?) replaces the Internet.

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2 Comments

Hello Jim,
Just a few comments that came to mind after reading last Sunday's column on TicketMaster CEO Sean Moriarty.
So let me get this straight:
1) When it suits his purpose, he's all for monopoly power (exclusive rights at most venues, said venues closing their box offices so TM is the only game in town)
2) When it suits his purpose, he's all for the free market (supports auctions for high-demand tickets)
3) When it suits his purpose, he's all for monopoly power (supports only original seller (ie, TM) doing ticket auctions)

Sean Moriarty is a professional "talk out of both sides of my mouth" kinda guy, as long as TM benefits.

And from my own personal experience, I love how the expensive tickets have higher service and convenience fees, even when they are printed on the same card stock from the same printer from the same...aw, you get it already.

I really hate TM. Thanks for a chance to vent.

Tom Bowden
Lombard, IL

WHEN YOUR'E DEAD SEAN MORIARTY...PEOPLE WILL REMEBER YOU FOR THE RIP OFF ARTIST EXPLOITER YOU ARE. AND THE MONEY YOU TOOK FROM THOSE WHO SUPPORT ARTISTS. YOU ARE THE WORST OF THE WORST. SLEEP WELL IN OYUR LIFE OF LUXURY..YOU LIVE IN A WORLD OF EXCREMENT.

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This page contains a single entry by Jim DeRogatis published on March 14, 2008 4:39 PM.

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SXSW Dispatch #7: Chicago rising: The Frantic, the Cool Kids, and Kid Sister's Pro Nails Salon is the next entry in this blog.

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