This review was published in the July 4 edition of The Hamilton Spectator.
By Dean Budnick and Josh Baron
I got scalped last month and had a blast.
My wife and I had VIP seats for the June 22 Peter Gabriel and New Blood Orchestra concert at the Molson Amphitheatre. We sat dead centre, about 20 rows from the stage, in padded seats reserved for season’s ticket holders.
Instead of trying my luck with Ticketmaster for the best available seats, I went straight to StubHub and paid a premium for two of the best seats in the house. StubHub is owned by eBay and part of the secondary market where buyers resell concert, sports and theatre tickets and the law of supply and demand rules.
I discovered StubHub after trying to get tickets to Gabriel's show last year at Radio City Music Hall in New York City. After an unsuccessful morning on Ticketmaster, it took all of 5 minutes to get a pair of seats through StubHub.
Not only did I get great seats for the Toronto show. I picked out and paid for my VIP passes before tickets went on sale to the general public.
Yes, I paid a small fortune. But I’d pay big bucks to sit on a milk crate in a rainstorm to hear Gabriel read a phonebook.
And the secondary market is where you’re headed too if you want to get up close and personal with your favourite big-name performer.
That’s because few, if any, of the best seats in the house ever hit the open market. Blocks of tickets first go to VIP packages, exclusive presales, fan clubs, sponsors and season’s ticket holders. And it’s not unheard of for artists and promoters to move tickets straight to the secondary market and pocket the mark-up in prices. When tickets finally go on sale online to the general public, brokers unleash thousands of automated “bots” that buy up and sell out concerts within minutes.
But the glory days may be ending for resellers, according to authors Dean Budnick and Josh Baron, long-time editors of Relix music magazine.
One of the fundamental problems with today’s concert industry is that the best seats are chronically undervalued and the worst seats are overvalued. Die-hard fans don’t want to sit out on lawns or up in nose-bleed seats.
“The multi-billion dollar secondary market is like a large, blinking highway billboard clearly indicating that primary tickets have been inefficiently priced,” says Budnick and Baron. “The tide of primary ticketing is clearly shifting, likely the beginning of a major and overdue pricing correction.”
Dynamic pricing is among the new developments that could be coming to a concert near you. Pricing would be set on a sliding scale, taking into account where you want to sit, when you bought your tickets and overall demand for the show. This is exactly how buyers are setting ticket prices on reselling sites like StubHub.
A decade ago, the Eagles broke the $100 barrier for a concert ticket. Today, artists like Paul McCartney are selling the best seats in the house for $1,000.
“There is no question the business of rock and roll has shifted considerably over the past few decades,” say Budnick and Baron. “Revenue streams once deemed ancillary have become primary to support increasingly debt-ridden corporate entities. It often seems as if the music fans themselves have become mere afterthoughts, their loyalty expected but rarely nurtured.”
A Live Nation Entertainment presentation to Wall Street in the summer of 2010 showed the precarious state of the industry. After paying 30 per cent to show costs and 65 to 90 per cent to the artist and tax, a promoter’s profit on a $55.65 ticket is all of $3. Returns disappear entirely when concerts don’t sell out in a sluggish economy.
“So how do the numbers jibe when a $55 ticket is reduced to a $10 ticket, when by the company’s own admission it owes the artist anywhere from $34 to $47 from it?”
This is where you and I are conscripted to save the day. We shell out $20 for parking, $25 for a beer and a burger. We get dinged with service charges, building facility charges, processing charges, shipping charges and e-ticket charges that quickly add up and rival the base price of a ticket.
The easy solution would be to pay artists less. But venues with high fixed overhead costs are at the mercy of big-name artists who have the power to sell out every seat, fill parking lots and leave long lines at the concession stands.
Budnick and Baron offer a backstage tour of the modern concert industry from its rise in the 1960s to the 2010 merger of Ticketmaster and Live Nation, the world’s dominant live entertainment company with a debtload of $1.7 billion. The chapter on the Grateful Dead’s showdown with TicketMaster over the control of concert ticket sales is worth the price of the book.
Before promising your tween front-row seats to see the next lip-synching starlet that Disney throws up the pop charts, read this book, clear room on your credit card and set up an account on StubHub.
This book should also be required reading for the five city councillors who are now in charge of Hamilton’s own beleaguered entertainment agency. Given the sorry state of the industry, the challenges facing its biggest player and the complex relationships between artists, promoters and ticketing agents, the odds of ever turning HECFI into a money maker are about as good as you and I paying face value for front row tickets to a U2 or Lady Gaga concert. The only question may be how much, if any, of a service charge we’re willing to pay as taxpayers to bring big names to Steeltown