LiveNation vs. Ethics | Matt Connarton Unleashed

0:00 Speaker 1: We have time to do at least one more music news story. Always so many interesting things going on in the industry.

0:06 Speaker 2: Let's see.

0:06 Speaker 1: This is from Music Business Worldwide dot com, one of my favorite sites. You know, we were talking about it was it last week or the week before, we were talking about Ticketmaster and Live Nation. They're being sued by the Federal Trade Commission for unfair practices with you know, they have these these resellers on the secondary market, some of whom are owned or at least controlled by Live Nation itself. It's a dirty business to ticketing business. But this just went up a couple of days ago. Ticketmaster did not use dynamic pricing for Oasis concerts in the UK.

0:36 Speaker 1: Will change how it sells tickets in the market, says a watchdog group. So dynamic pricing, if you don't know, this is where this is a relatively new concept in the ticketing industry where prices will change on tickets. So, you know, it used to be not long ago when a promoter put tickets to a show on sale, the price was the price and that was it. You don't raise the price if demand seems high, and you don't lower the price if demand is too low. And the tickets aren't selling. Once you set the price, that's it for a promoter to actually adjust prices.

1:14 Speaker 2: Whether it be a major.

1:15 Speaker 1: Promoter or the biggest promoter of course Live Nation and their ticket selling arm Ticketmaster, or as a small local promoter just doing local shows, you don't see ticket prices being adjusted. But with dynamic pricing, it's like a it's almost like like a real time sort of like eBay, But well no, that's a that's not a there's a better uber would be a much better analogy Uber or lyft. You know how, if you go to book a ride, the price may vary. It depends on demand. Right. If there's if demand is high, that ride, the book is going to cost you more money.

1:54 Speaker 1: If demand is low, if the app isn't very busy, if the drivers aren't very busy, that trip is going to cost you a lot less. Right, So the pricing automatically fluctuates based on the demand or lack thereof. Dynamic pricing does the same thing. So if there's high demand for a show, that dynamic pricing, if they're using that model, that's automatically going to inflate the prices. If demand is low, the tickets aren't selling, it's going to deflate the price and that can swing kind of like add the airlines do that right, a sort of a form of dynamic pricing with flights for airline tickets.

2:27 Speaker 1: That's always been and they've been doing that forever, I believe, probably for decades, but this is relatively new to the concert industry and Live Nation they're the first ones to actively do it that I know of, but so we hear. Part of why this is coming up again is because when Oasis tickets went on sale in the UK for the reunion tour, there was a lot of frustration from people and the band was getting a lot of bad press, even though they're not in direct control of this part of the process, but a lot of bad press because of how expensive the tickets had become.

2:57 Speaker 1: And at the time Live Nation was being accused of using dynamic pricing, but according to this they actually were not in this instance. So this is interesting. This is part of why this story caught my eye. So the UK's competition watchdog says it has secured commitments from Ticketmaster to make tickets sales more transparent following an investigation into the sale of tickets to the UK and Ireland leg of Oasis' reunion tour. The Competition and Markets Authority CMA also, if you haven't heard from it again, this is in the UK, also said it has not found evidence that Ticketmaster used dynamic pricing in the sale of Oasis tickets.

3:38 Speaker 1: Dynamic pricing adjust tickets prices in real time based on demand and has proven controversial among some concert goers due to sudden spikes in prices. In a statement released on Thursday, September twenty five, the CMA said Live Nation owned Ticketmaster committed to telling fans twenty four hours in advance if it's using a teared pricing system. By the way, and we've covered this on the show, Live Nation and Ticketmaster they have a little bit of a history. This will come as a shock to precisely know what, I'm sure of making certain statements about commitments to their customers in terms of transparency and so forth, and then not following through on much or any of it.

4:22 Speaker 1: Just to be clear, okay, but apparently they made this commitment tell fans twenty four hours in advance if they're going to be using dynamic pricing or some sort of tiered pricing system. CMA said, quote, this means fans will know beforehand if there are multiple prices for the same type of ticket, and that more expensive ones will be released once the cheapest sell out unquote, by the way, just to be clear if it's the same type of ticket. In other words, because there's always some form of tiered pricing in that if you're buying tickets for a show at an arena, you know, front row tickets are going to be more expensive than the middle middle row are going to be more expensive than you know, they call them the cheap seats way in the back, right.

5:04 Speaker 1: But what they're saying here is the same type of ticket, there will not be multiple tiers. So in other words, a front row ticket won't cost, however, many hundreds or thousands of dollars for one person and even more money for another person for that same type of ticket. So because there's there's always a tier system of sorts, but but but not a predatory and abusive one, necessarily should they be using if you want to frame it that way, I have a lot of mixed feelings about it myself. Okay, So it says your ticketmaster will also inform ticket buyers who join a queue of the range of ticket prices available and will inform those in line when cheaper tickets sell out.

5:45 Speaker 2: The company also committed.

5:46 Speaker 1: To not using any misleading ticket labels, the CMA said. The Watchdog launched its investigation into Ticketmaster in September twenty twenty four following the sale of Oasis tickets, which some news reports say involved dynamic pricing and saw large spikes and the prices of tickets during the sale. Yeah, so that was a year ago, and I remember we talked about it on this show. In fact, it was a very popular segment. If you just want to find the segment, you can find it on YouTube on the IPM Nation YouTube channel.

6:15 Speaker 1: But we put that up because you know, something people were very interested about. And at that time it was being reported that they were using dynamic pricing. But according to this this watchdog group is saying that actually they did not in that instance. So that's interesting. So the sale was marred again. Talking about the Oasis tickets that went on sale in the UK a year ago. The sale was marred by technical problems which may have been linked to a large number of bots attempting to buy up the available tickets.

6:45 Speaker 1: And we've talked about that a lot on the show too. These bots that buy up tickets on behalf of the secondary market, who then take those their scalpers. They're scalpers, these secondary market ticket sellers. They buy up the tickets. They use bots to buy up the tickets. Why would you use bots? Why wouldn't you just go in as one person and just buy a whole bunch of tickets, because supposedly ticket Master prevents you from doing that. They put limits supposedly, Again, they don't always keep their word.

7:16 Speaker 1: They don't always follow through on these things, and there are examples where they haven't. But they're supposed to limit how many tickets you can buy at once to prevent scalping. Doesn't always work out. But if you have bots, if you have multiple bots, Ticketmaster doesn't know that all these different bots are buying multiple tickets. Or you know, if you have if you have one hundred bots and they're each buying five tickets because you have a five ticket limit, but you've got one hundred bots, so then you've just bought you know, five hundred tickets, right, or if you have one thousand bots, five thousand tickets.

7:49 Speaker 1: I think, right, I'm bad at math, but anyway, you get my point. So in March of this year, the CMA said it had identified two key problems with Ticketmaster's sale of Oasis tickets. Okay, so so again not the dynamic pricing the watch this watchdog group CMA is saying they didn't do that.

8:08 Speaker 2: But here's what went wrong. Two things.

8:10 Speaker 1: One, the watchdog claimed Ticketmaster labeled certain seats tickets as platinum and sold them for nearly two and a half times the price of equivalent standard tickets quote without sufficiently explaining that they did not offer additional benefits and were often located in the same area of the stadium unquote. So in other words, so that's I think is pretty deceptive. Right, So they offered you a platinum ticket that was two and a half times more money, but you didn't actually get anything extra.

8:38 Speaker 1: It's the same it's the same seat. You're literally you know that expression when you buy a brand name product instead of instead of the generic version. You're just paying for the name, and this this is an example of that. You're literally paying for the name you're playing for. You're paying for something that's quote unquote platinum, but it's actually the exact same thing. So that's pretty sketchy. And the second thing that CMA said went wrong. They alleged that Ticketmaster quote did not inform consumers that there were two categories of standing tickets at different prices, with all of the cheaper standing tickets sold first before the more expensive standing tickets were released unquote.

9:14 Speaker 1: The CMA then appeared to put pressure on Ticketmaster, writing in a letter in July that it had quote discharged its obligation to consult with Ticketmaster as no undertakings have been offered or agreed unquote. That appears to have now changed, with the CMA saying that Ticketmaster had agreed to several undertakings in response to the CMA probe. Okay, so this progress, CMA said, quote. These undertakings have been provided to the CMA voluntarily and without any admission of wrongdoing or liability.

9:43 Speaker 1: Ticketmaster has stopped using platinum labels in the UK, separate to providing undertakings. Fans who spend their hard earned money to see artists say love deserve to see clear, accurate information. We can't ensure every fan gets a ticket for events as popular as the Oasis, but we can help ensure the next time an event like this comes along, fans have the information they need when they need it unquote. According to Sarah Cardell, a CMA Chief executive, the CMA also indicated that dynamic pricing was not used in the Oasis on sale.

10:17 Speaker 1: This is an important detail because at the time it was being reported that yes, they were using dynamic pricing, and that was the crux of the issue. But this watchdog group actually clears Live Nation on this and says, quote, we welcome the CMA's confirmation. Oh I'm sorry, Ticketmaster. Oh let me back up, let me back up. Okay, Here's here's what CMA said. And then Ticketmaster responded, So, CMA said, quote, While many fans were under the impression that Ticketmaster used an algorithmic pricing model during the Oasis sale, with ticket prices adjusted in real time according to changing conditions like high demand, also known as dynamic pricing, the CMA has found no evidence that this was the case.

10:55 Speaker 2: Unquote. Okay.

10:57 Speaker 1: So then and Ticketmaster responded with a statement saying, quote, we welcome the CMA's confirmation that there was no dynamic pricing, no unfair practices, and that we did not breach consumer law. To further improve the customer experience. We voluntarily committed to clearer communication about ticket prices in queues. This builds up our capped resale. This builds on our capped resale, strong bought protection and clear pricing displays. And we encourage the CMA to hold the entire industry to these same standards.

11:25 Speaker 1: Unquote in comments earlier, well actually hold on, wait, let me stop on that quote for just a second. So they're saying, I mean, it's great that they're making all these commitments. We'll see if they follow through, but it's kind of interesting that one little last part we encouraged CMA to hold the entire industry to these same standards. What's funny about that to me is so that sounds like, Okay, you know we're going to agree to this, but you better.

11:48 Speaker 2: Make sure you hold everyone else to that same standard. Well, but who else is there.

11:53 Speaker 1: You gotta I mean, just keep in mind Live Nation and ticket Master, it's the same company. They they can control. They controlled the concert industry. I mean, obviously they are independent, smaller promoters throughout the country, throughout the world, throughout the UK. But this is a monopoly. This is absolutely a monopoly. So that sounds a little petty. Oh, we hope you hold everyone to the same standards. Yeah, okay, but you guys are the ones that we're concerned with because.

12:26 Speaker 2: You guys are the ones who control everything, right, So I just thought that was interesting.

12:32 Speaker 1: In comments earlier this year, Live Nation CEO Joe birch Told said that more often than not, dynamic pricing results in lower, not higher.

12:42 Speaker 2: Ticket prices.

12:44 Speaker 1: I'm skeptical about that, although I can see how that might be the case if a show, I mean, if a show isn't selling very well, then dynamic pricing would of course make for lower prices.

12:54 Speaker 2: But that's not where we get concerned. A show that isn't well. I don't know.

13:00 Speaker 1: Sometimes sometimes big tours end up underperforming. But birch Told said at a JP Morgan Chase conference in May, quote, most of our so called dynamic pricing is actually I'm reducing the price of tickets that haven't sold yet, because I see that the market clearing price. I'm not quite there. By definition, you can never raise the price of a ticket you've already sold. So that's why most of your dynamic pricing is actually lowering the price.

13:27 Speaker 2: Unquote.

13:28 Speaker 1: I'm open to that. I mean, there might be math that supports that. I understand his argument. I'm skeptical, I'm always skeptical of these people, but I understand his argument.