Field Dispatch
LiveNation vs. Ethics | Matt Connarton Unleashed
Speaker 1: We have time to do at least one more music
Speaker 1: news story. Always so many interesting things going on in
Speaker 1: the industry.
Speaker 2: Let's see.
Speaker 1: This is from Music Business Worldwide dot com, one of
Speaker 1: my favorite sites. You know, we were talking about it
Speaker 1: was it last week or the week before, we were
Speaker 1: talking about Ticketmaster and Live Nation. They're being sued by
Speaker 1: the Federal Trade Commission for unfair practices with you know,
Speaker 1: they have these these resellers on the secondary market, some
Speaker 1: of whom are owned or at least controlled by Live
Speaker 1: Nation itself. It's a dirty business to ticketing business. But
Speaker 1: this just went up a couple of days ago. Ticketmaster
Speaker 1: did not use dynamic pricing for Oasis concerts in the UK.
Speaker 1: Will change how it sells tickets in the market, says
Speaker 1: a watchdog group. So dynamic pricing, if you don't know,
Speaker 1: this is where this is a relatively new concept in
Speaker 1: the ticketing industry where prices will change on tickets. So,
Speaker 1: you know, it used to be not long ago when
Speaker 1: a promoter put tickets to a show on sale, the
Speaker 1: price was the price and that was it. You don't
Speaker 1: raise the price if demand seems high, and you don't
Speaker 1: lower the price if demand is too low. And the
Speaker 1: tickets aren't selling. Once you set the price, that's it
Speaker 1: for a promoter to actually adjust prices.
Speaker 2: Whether it be a major.
Speaker 1: Promoter or the biggest promoter of course Live Nation and
Speaker 1: their ticket selling arm Ticketmaster, or as a small local
Speaker 1: promoter just doing local shows, you don't see ticket prices
Speaker 1: being adjusted. But with dynamic pricing, it's like a it's
Speaker 1: almost like like a real time sort of like eBay,
Speaker 1: But well no, that's a that's not a there's a
Speaker 1: better uber would be a much better analogy Uber or lyft.
Speaker 1: You know how, if you go to book a ride,
Speaker 1: the price may vary. It depends on demand. Right. If
Speaker 1: there's if demand is high, that ride, the book is
Speaker 1: going to cost you more money. If demand is low,
Speaker 1: if the app isn't very busy, if the drivers aren't
Speaker 1: very busy, that trip is going to cost you a
Speaker 1: lot less. Right, So the pricing automatically fluctuates based on
Speaker 1: the demand or lack thereof. Dynamic pricing does the same thing.
Speaker 1: So if there's high demand for a show, that dynamic pricing,
Speaker 1: if they're using that model, that's automatically going to inflate
Speaker 1: the prices. If demand is low, the tickets aren't selling,
Speaker 1: it's going to deflate the price and that can swing
Speaker 1: kind of like add the airlines do that right, a
Speaker 1: sort of a form of dynamic pricing with flights for
Speaker 1: airline tickets. That's always been and they've been doing that forever,
Speaker 1: I believe, probably for decades, but this is relatively new
Speaker 1: to the concert industry and Live Nation they're the first
Speaker 1: ones to actively do it that I know of, but
Speaker 1: so we hear. Part of why this is coming up
Speaker 1: again is because when Oasis tickets went on sale in
Speaker 1: the UK for the reunion tour, there was a lot
Speaker 1: of frustration from people and the band was getting a
Speaker 1: lot of bad press, even though they're not in direct
Speaker 1: control of this part of the process, but a lot
Speaker 1: of bad press because of how expensive the tickets had become.
Speaker 1: And at the time Live Nation was being accused of
Speaker 1: using dynamic pricing, but according to this they actually were
Speaker 1: not in this instance. So this is interesting. This is
Speaker 1: part of why this story caught my eye. So the
Speaker 1: UK's competition watchdog says it has secured commitments from Ticketmaster
Speaker 1: to make tickets sales more transparent following an investigation into
Speaker 1: the sale of tickets to the UK and Ireland leg
Speaker 1: of Oasis' reunion tour. The Competition and Markets Authority CMA also,
Speaker 1: if you haven't heard from it again, this is in
Speaker 1: the UK, also said it has not found evidence that
Speaker 1: Ticketmaster used dynamic pricing in the sale of Oasis tickets.
Speaker 1: Dynamic pricing adjust tickets prices in real time based on
Speaker 1: demand and has proven controversial among some concert goers due
Speaker 1: to sudden spikes in prices. In a statement released on Thursday,
Speaker 1: September twenty five, the CMA said Live Nation owned Ticketmaster
Speaker 1: committed to telling fans twenty four hours in advance if
Speaker 1: it's using a teared pricing system. By the way, and
Speaker 1: we've covered this on the show, Live Nation and Ticketmaster
Speaker 1: they have a little bit of a history. This will
Speaker 1: come as a shock to precisely know what, I'm sure
Speaker 1: of making certain statements about commitments to their customers in
Speaker 1: terms of transparency and so forth, and then not following
Speaker 1: through on much or any of it. Just to be clear, okay,
Speaker 1: but apparently they made this commitment tell fans twenty four
Speaker 1: hours in advance if they're going to be using dynamic
Speaker 1: pricing or some sort of tiered pricing system. CMA said, quote,
Speaker 1: this means fans will know beforehand if there are multiple
Speaker 1: prices for the same type of ticket, and that more
Speaker 1: expensive ones will be released once the cheapest sell out unquote,
Speaker 1: by the way, just to be clear if it's the
Speaker 1: same type of ticket. In other words, because there's always
Speaker 1: some form of tiered pricing in that if you're buying
Speaker 1: tickets for a show at an arena, you know, front
Speaker 1: row tickets are going to be more expensive than the
Speaker 1: middle middle row are going to be more expensive than
Speaker 1: you know, they call them the cheap seats way in
Speaker 1: the back, right. But what they're saying here is the
Speaker 1: same type of ticket, there will not be multiple tiers.
Speaker 1: So in other words, a front row ticket won't cost, however,
Speaker 1: many hundreds or thousands of dollars for one person and
Speaker 1: even more money for another person for that same type
Speaker 1: of ticket. So because there's there's always a tier system
Speaker 1: of sorts, but but but not a predatory and abusive one,
Speaker 1: necessarily should they be using if you want to frame
Speaker 1: it that way, I have a lot of mixed feelings
Speaker 1: about it myself. Okay, So it says your ticketmaster will
Speaker 1: also inform ticket buyers who join a queue of the
Speaker 1: range of ticket prices available and will inform those in
Speaker 1: line when cheaper tickets sell out.
Speaker 2: The company also committed.
Speaker 1: To not using any misleading ticket labels, the CMA said.
Speaker 1: The Watchdog launched its investigation into Ticketmaster in September twenty
Speaker 1: twenty four following the sale of Oasis tickets, which some
Speaker 1: news reports say involved dynamic pricing and saw large spikes
Speaker 1: and the prices of tickets during the sale. Yeah, so
Speaker 1: that was a year ago, and I remember we talked
Speaker 1: about it on this show. In fact, it was a
Speaker 1: very popular segment. If you just want to find the segment,
Speaker 1: you can find it on YouTube on the IPM Nation
Speaker 1: YouTube channel. But we put that up because you know,
Speaker 1: something people were very interested about. And at that time
Speaker 1: it was being reported that they were using dynamic pricing.
Speaker 1: But according to this this watchdog group is saying that
Speaker 1: actually they did not in that instance. So that's interesting.
Speaker 1: So the sale was marred again. Talking about the Oasis
Speaker 1: tickets that went on sale in the UK a year ago.
Speaker 1: The sale was marred by technical problems which may have
Speaker 1: been linked to a large number of bots attempting to
Speaker 1: buy up the available tickets. And we've talked about that
Speaker 1: a lot on the show too. These bots that buy
Speaker 1: up tickets on behalf of the secondary market, who then
Speaker 1: take those their scalpers. They're scalpers, these secondary market ticket sellers.
Speaker 1: They buy up the tickets. They use bots to buy
Speaker 1: up the tickets. Why would you use bots? Why wouldn't
Speaker 1: you just go in as one person and just buy
Speaker 1: a whole bunch of tickets, because supposedly ticket Master prevents
Speaker 1: you from doing that. They put limits supposedly, Again, they
Speaker 1: don't always keep their word. They don't always follow through
Speaker 1: on these things, and there are examples where they haven't.
Speaker 1: But they're supposed to limit how many tickets you can
Speaker 1: buy at once to prevent scalping. Doesn't always work out.
Speaker 1: But if you have bots, if you have multiple bots,
Speaker 1: Ticketmaster doesn't know that all these different bots are buying
Speaker 1: multiple tickets. Or you know, if you have if you
Speaker 1: have one hundred bots and they're each buying five tickets
Speaker 1: because you have a five ticket limit, but you've got
Speaker 1: one hundred bots, so then you've just bought you know,
Speaker 1: five hundred tickets, right, or if you have one thousand bots,
Speaker 1: five thousand tickets. I think, right, I'm bad at math,
Speaker 1: but anyway, you get my point. So in March of
Speaker 1: this year, the CMA said it had identified two key
Speaker 1: problems with Ticketmaster's sale of Oasis tickets. Okay, so so
Speaker 1: again not the dynamic pricing the watch this watchdog group
Speaker 1: CMA is saying they didn't do that.
Speaker 2: But here's what went wrong. Two things.
Speaker 1: One, the watchdog claimed Ticketmaster labeled certain seats tickets as
Speaker 1: platinum and sold them for nearly two and a half
Speaker 1: times the price of equivalent standard tickets quote without sufficiently
Speaker 1: explaining that they did not offer additional benefits and were
Speaker 1: often located in the same area of the stadium unquote.
Speaker 1: So in other words, so that's I think is pretty deceptive. Right,
Speaker 1: So they offered you a platinum ticket that was two
Speaker 1: and a half times more money, but you didn't actually
Speaker 1: get anything extra. It's the same it's the same seat.
Speaker 1: You're literally you know that expression when you buy a
Speaker 1: brand name product instead of instead of the generic version.
Speaker 1: You're just paying for the name, and this this is
Speaker 1: an example of that. You're literally paying for the name
Speaker 1: you're playing for. You're paying for something that's quote unquote platinum,
Speaker 1: but it's actually the exact same thing. So that's pretty sketchy.
Speaker 1: And the second thing that CMA said went wrong. They
Speaker 1: alleged that Ticketmaster quote did not inform consumers that there
Speaker 1: were two categories of standing tickets at different prices, with
Speaker 1: all of the cheaper standing tickets sold first before the
Speaker 1: more expensive standing tickets were released unquote. The CMA then
Speaker 1: appeared to put pressure on Ticketmaster, writing in a letter
Speaker 1: in July that it had quote discharged its obligation to
Speaker 1: consult with Ticketmaster as no undertakings have been offered or
Speaker 1: agreed unquote. That appears to have now changed, with the
Speaker 1: CMA saying that Ticketmaster had agreed to several undertakings in
Speaker 1: response to the CMA probe. Okay, so this progress, CMA said, quote.
Speaker 1: These undertakings have been provided to the CMA voluntarily and
Speaker 1: without any admission of wrongdoing or liability. Ticketmaster has stopped
Speaker 1: using platinum labels in the UK, separate to providing undertakings.
Speaker 1: Fans who spend their hard earned money to see artists
Speaker 1: say love deserve to see clear, accurate information. We can't
Speaker 1: ensure every fan gets a ticket for events as popular
Speaker 1: as the Oasis, but we can help ensure the next
Speaker 1: time an event like this comes along, fans have the
Speaker 1: information they need when they need it unquote. According to
Speaker 1: Sarah Cardell, a CMA Chief executive, the CMA also indicated
Speaker 1: that dynamic pricing was not used in the Oasis on sale.
Speaker 1: This is an important detail because at the time it
Speaker 1: was being reported that yes, they were using dynamic pricing,
Speaker 1: and that was the crux of the issue. But this
Speaker 1: watchdog group actually clears Live Nation on this and says, quote,
Speaker 1: we welcome the CMA's confirmation. Oh I'm sorry, Ticketmaster. Oh
Speaker 1: let me back up, let me back up. Okay, Here's
Speaker 1: here's what CMA said. And then Ticketmaster responded, So, CMA said, quote,
Speaker 1: While many fans were under the impression that Ticketmaster used
Speaker 1: an algorithmic pricing model during the Oasis sale, with ticket
Speaker 1: prices adjusted in real time according to changing conditions like
Speaker 1: high demand, also known as dynamic pricing, the CMA has
Speaker 1: found no evidence that this was the case.
Speaker 2: Unquote. Okay.
Speaker 1: So then and Ticketmaster responded with a statement saying, quote,
Speaker 1: we welcome the CMA's confirmation that there was no dynamic pricing,
Speaker 1: no unfair practices, and that we did not breach consumer law.
Speaker 1: To further improve the customer experience. We voluntarily committed to
Speaker 1: clearer communication about ticket prices in queues. This builds up
Speaker 1: our capped resale. This builds on our capped resale, strong
Speaker 1: bought protection and clear pricing displays. And we encourage the
Speaker 1: CMA to hold the entire industry to these same standards.
Speaker 1: Unquote in comments earlier, well actually hold on, wait, let
Speaker 1: me stop on that quote for just a second. So
Speaker 1: they're saying, I mean, it's great that they're making all
Speaker 1: these commitments. We'll see if they follow through, but it's
Speaker 1: kind of interesting that one little last part we encouraged
Speaker 1: CMA to hold the entire industry to these same standards.
Speaker 1: What's funny about that to me is so that sounds like, Okay,
Speaker 1: you know we're going to agree to this, but you better.
Speaker 2: Make sure you hold everyone else to that same standard. Well,
Speaker 2: but who else is there.
Speaker 1: You gotta I mean, just keep in mind Live Nation
Speaker 1: and ticket Master, it's the same company. They they can control.
Speaker 1: They controlled the concert industry. I mean, obviously they are independent,
Speaker 1: smaller promoters throughout the country, throughout the world, throughout the UK.
Speaker 1: But this is a monopoly. This is absolutely a monopoly.
Speaker 1: So that sounds a little petty. Oh, we hope you
Speaker 1: hold everyone to the same standards. Yeah, okay, but you
Speaker 1: guys are the ones that we're concerned with because.
Speaker 2: You guys are the ones who control everything, right, So
Speaker 2: I just thought that was interesting.
Speaker 1: In comments earlier this year, Live Nation CEO Joe birch
Speaker 1: Told said that more often than not, dynamic pricing results
Speaker 1: in lower, not higher.
Speaker 2: Ticket prices.
Speaker 1: I'm skeptical about that, although I can see how that
Speaker 1: might be the case if a show, I mean, if
Speaker 1: a show isn't selling very well, then dynamic pricing would
Speaker 1: of course make for lower prices.
Speaker 2: But that's not where we get concerned. A show that
Speaker 2: isn't well. I don't know.
Speaker 1: Sometimes sometimes big tours end up underperforming. But birch Told
Speaker 1: said at a JP Morgan Chase conference in May, quote,
Speaker 1: most of our so called dynamic pricing is actually I'm
Speaker 1: reducing the price of tickets that haven't sold yet, because
Speaker 1: I see that the market clearing price. I'm not quite there.
Speaker 1: By definition, you can never raise the price of a
Speaker 1: ticket you've already sold. So that's why most of your
Speaker 1: dynamic pricing is actually lowering the price.
Speaker 2: Unquote.
Speaker 1: I'm open to that. I mean, there might be math
Speaker 1: that supports that. I understand his argument. I'm skeptical, I'm
Speaker 1: always skeptical of these people, but I understand his argument.
Podbean