Ticketmaster Interview Part 3

Golden Circle (continued)

See that act at $150. Maybe at $60 or $50 they would. And the
problem is not every act can draw that kind of money. So you know,
that's a different set of issues, but that was the beginning. That was
when people started to think of this as, maybe it's a business. Maybe
it's something we have to look at.

It used to be you made the record and toured to support the record,
right? Now, you know, I think Madonna's tour was $190 million
dollars - or the Stones - or somewhere in that level. Now you tour to
make money, because pricing caught up to value and the albums
don't sell on the same level. It's a different dynamic. Then came
merchandise and then came ancillary rights (none of which has
anything to do with ticketing, but it really was the progression). When
I got in the business, people were genuinely concerned about being
able to sell tickets orderly, have accurate accounting, not have
duplicates, and have a real straight up business. And as we dealt with
all those concerns (rapid speed of selling), you sell a show out
quickly, you can roll and do another show. And when you could do
three or four or five stadium shows in a day (which was unheard of
when I got in the business in the 80s, because we just couldn't
physically get it done), the more the technology allowed you to do
that. The more people started to take it for granted. Near the end,
people assumed we had no technology because it all looked
effortless. The line was, all you did was print the ticket, but people
don't understand the issue of thru-put and they don't understand the
issue of orderly distribution.

The first big event we did was White Sox - this is a true story - was a
White Sox game, and I remember I went to opening day of the White
Sox in 1983 and I had a dream the night before, that everybody was
in the same seat and the system didn't work - because I was never
technical and I never learned the system. I understood the economics
of the business (or I thought I did), and it was a lot of fun. You have
to understand it was a lot of fun because you were changing rules
and you were meeting needs. And from a manager's point of view
and a band's point of view, if they could sell three shows instead of
two, that was good for them, right? And if you could do it orderly and
not have counterfeits, and not have duplicates, you could really make
a better business, and it ultimately helped everybody.

Orderly Distribution & Thru-Put

Distribution is you'd have - for some shows you'd have 100

operators, and you'd have 100 outlets (75 outlets in a big region),
and thru-put was how fast you could print a ticket and do a
transaction. So we could do 2,000 tickets a minute and when you're
talking about - maybe in an 18,000 seat building depending on the
configuration - in those days you'd probably sell 90 percent of the
house. Not taking into account: band holds; sponsor holds;
advertising holds; VIP holds; all those. If you could sell it out in less
than ½ an hour, that was unheard of. And so gee, we're out in a ½
an hour, when do we roll? And it had an impact because what
creating these systems did, facilitated concert buyers to get the
tickets more rapidly - which led to more shows.

Rolling over in other wards - because you sold out so quickly - maybe
you do a third show in a market instead of a second. When tours
went on sale (going back 20 years), they'd go, well, we're gonna do
one date here, and maybe two dates here.but we don't know. And
then maybe three dates here.but we don't know. Because as they'd
lay it out, they'd leave room to move it from city to another, and so if
you sold out a show quickly, and rolled in to a second, then they
knew they had two dates, and then a lot of these shows would go on
sale the same day. So you'd have a grid basically, where you knew
what was going on all over America. And you were in touch with the
managers, agents, and the buildings, and they would tell you whether
to roll (in other wards, go into the next show). The managers,
agents, and buildings made those decisions. We didn't; we just gave
them the information to make the decisions.

One of the things that's of great confusion, was that Ticketmaster's

not involved in pricing the face value of tickets; not involved in
determining whether shows - more than one or two shows - go in a
marketplace. The representatives of the band and the building, or the
venue, make those decisions. We gave them the information so that
they had access. You go, well, let's see -first show I've sold out all
the tickets except maybe some singles, and maybe 500 seats in the
rafters. Well you know from the business you're going to sell those
out because the closer you get to the date people just buy them - you
know, because they want to be part of the experience. So maybe you
roll into a second show, and then maybe you cleaned up everything
(but maybe some singles, and maybe a thousand tickets in the
second show).

You can see the demand on the phones because remember, the
reason people got busy signals - this is truly funny - the reason
people got busy signals is you had 100 operators and hundreds of
thousands of attempts. So the dynamic was, of course everybody
couldn't get through - it was a pipe. It was an orderly pipe. And if you
had 100 operators or even 200 operators. people learned about
speed dialing and rotary phones - because rotary phones were
disappearing. And so you sit there, and you keep hammering it, and
then if you got through, you could order 6 or 8 tickets [the limit].

Now what's interesting is that today, online for concerts, people will
spend sometimes (and especially for theater), more time searching
for good seats than they would on the phone. If they were on the
phone for 10 or 15 minutes they would complain. But if they're sitting
at their computer for ½ hour, it's their time, so they can pick the
show they want to go see and they feel they're more in control of
their own destiny, as opposed to a third party. So all of that was
going on in the 80s and basically up until the mid 90s.

It was different because managers never got the tools. The agents
never knew, How many tickets have we sold? Where are they?
What's left? How do you figure it out? Where are you selling? Even in
the basis that you could pull an outlet report online - you'd say, now
where is my strength coming from? It's not coming from - if the
show's in Indiana, it's not coming from Los Angeles, we know that.
Which are the strongest outlets? Then you could look at that, and are
there lines? So you'd call the outlets and you'd speak to people in the
outlets and say, Do you have lines? [Enough phone lines to handle
the demand]. We've added a first show and still have 100 people
[operators.] You'd call and you'd have polling and you'd be figuring
that out. And so, I don't think anybody understood what we did - but
I didn't think anybody needed to understand what we did. I think
when I say that, the public didn't understand what was going on. I
think the managers and agents got to use it and I think it was helpful
to them. You know, they would have loved it if we had the system for
free, but that wasn't the case.

The Markup

What happened was, we had a policy called cash only at the outlet
center. You could use a credit card on the phones. And in those days,
there were different service charges (outlets were less than phones,
which I understand has changed). My thinking at that time was that:
if you go to an outlet, you're making an overt effort to go
somewhere, so while it's a convenience, it's still different. The
ultimate form of convenience is not leaving your house, and calling
on the phone. What would happen is - and the reason it was cash
only at the outlets, was not because of any great technology issue,
it's that no band would pay the credit card. So the very essence of
what happened was: we felt as a ticket company, you're a guest in
the department store; you're a guest in the music store. They don't
want to spend all day with 200 people in line. They want to get 'em
in, and get 'em out, and get the tickets sold. So, everybody could
access cash. ATM's are near every store and people knew that. That
wasn't an issue and basically what happened over the years is that
the inside charge went from - put it this way - it went from significant
to minimal. And the outside charge went from minimal to significant,
lol. In a lot of these cases, even today when people go, well
Ticketmaster's not reasonable -they're not cutting there - I'm trying
to lower the price of the tickets - but Ticketmaster's not being
reasonable. It's sort of disingenuous because Ticketmaster's cut is
always the same. It's 15 - 20 percent of the face value of the ticket
up to a certain price. It's not 15 - 20 percent of $100.