LiveNation vs. Ethics | Matt Connarton Unleashed

0:00 Speaker 1: We have time to do at least one more music

0:01 Speaker 1: news story. Always so many interesting things going on in

0:04 Speaker 1: the industry.

0:06 Speaker 2: Let's see.

0:06 Speaker 1: This is from Music Business Worldwide dot com, one of

0:09 Speaker 1: my favorite sites. You know, we were talking about it

0:11 Speaker 1: was it last week or the week before, we were

0:12 Speaker 1: talking about Ticketmaster and Live Nation. They're being sued by

0:15 Speaker 1: the Federal Trade Commission for unfair practices with you know,

0:20 Speaker 1: they have these these resellers on the secondary market, some

0:23 Speaker 1: of whom are owned or at least controlled by Live

0:25 Speaker 1: Nation itself. It's a dirty business to ticketing business. But

0:29 Speaker 1: this just went up a couple of days ago. Ticketmaster

0:32 Speaker 1: 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

0:39 Speaker 1: a watchdog group. So dynamic pricing, if you don't know,

0:43 Speaker 1: this is where this is a relatively new concept in

0:46 Speaker 1: the ticketing industry where prices will change on tickets. So,

0:51 Speaker 1: you know, it used to be not long ago when

0:55 Speaker 1: a promoter put tickets to a show on sale, the

0:58 Speaker 1: price was the price and that was it. You don't

1:01 Speaker 1: raise the price if demand seems high, and you don't

1:06 Speaker 1: lower the price if demand is too low. And the

1:08 Speaker 1: tickets aren't selling. Once you set the price, that's it

1:12 Speaker 1: 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

1:19 Speaker 1: their ticket selling arm Ticketmaster, or as a small local

1:22 Speaker 1: promoter just doing local shows, you don't see ticket prices

1:27 Speaker 1: being adjusted. But with dynamic pricing, it's like a it's

1:31 Speaker 1: almost like like a real time sort of like eBay,

1:35 Speaker 1: But well no, that's a that's not a there's a

1:38 Speaker 1: better uber would be a much better analogy Uber or lyft.

1:44 Speaker 1: You know how, if you go to book a ride,

1:48 Speaker 1: the price may vary. It depends on demand. Right. If

1:50 Speaker 1: there's if demand is high, that ride, the book is

1:53 Speaker 1: going to cost you more money. If demand is low,

1:55 Speaker 1: if the app isn't very busy, if the drivers aren't

1:57 Speaker 1: very busy, that trip is going to cost you a

2:00 Speaker 1: lot less. Right, So the pricing automatically fluctuates based on

2:04 Speaker 1: the demand or lack thereof. Dynamic pricing does the same thing.

2:07 Speaker 1: So if there's high demand for a show, that dynamic pricing,

2:10 Speaker 1: if they're using that model, that's automatically going to inflate

2:13 Speaker 1: the prices. If demand is low, the tickets aren't selling,

2:16 Speaker 1: it's going to deflate the price and that can swing

2:19 Speaker 1: kind of like add the airlines do that right, a

2:22 Speaker 1: sort of a form of dynamic pricing with flights for

2:26 Speaker 1: airline tickets. That's always been and they've been doing that forever,

2:30 Speaker 1: I believe, probably for decades, but this is relatively new

2:33 Speaker 1: to the concert industry and Live Nation they're the first

2:35 Speaker 1: ones to actively do it that I know of, but

2:37 Speaker 1: so we hear. Part of why this is coming up

2:39 Speaker 1: again is because when Oasis tickets went on sale in

2:44 Speaker 1: the UK for the reunion tour, there was a lot

2:46 Speaker 1: of frustration from people and the band was getting a

2:49 Speaker 1: lot of bad press, even though they're not in direct

2:51 Speaker 1: control of this part of the process, but a lot

2:53 Speaker 1: 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

2:59 Speaker 1: using dynamic pricing, but according to this they actually were

3:03 Speaker 1: not in this instance. So this is interesting. This is

3:05 Speaker 1: part of why this story caught my eye. So the

3:08 Speaker 1: UK's competition watchdog says it has secured commitments from Ticketmaster

3:12 Speaker 1: to make tickets sales more transparent following an investigation into

3:18 Speaker 1: the sale of tickets to the UK and Ireland leg

3:21 Speaker 1: of Oasis' reunion tour. The Competition and Markets Authority CMA also,

3:28 Speaker 1: if you haven't heard from it again, this is in

3:29 Speaker 1: the UK, also said it has not found evidence that

3:33 Speaker 1: Ticketmaster used dynamic pricing in the sale of Oasis tickets.

3:38 Speaker 1: Dynamic pricing adjust tickets prices in real time based on

3:41 Speaker 1: demand and has proven controversial among some concert goers due

3:46 Speaker 1: to sudden spikes in prices. In a statement released on Thursday,

3:51 Speaker 1: September twenty five, the CMA said Live Nation owned Ticketmaster

3:55 Speaker 1: committed to telling fans twenty four hours in advance if

3:58 Speaker 1: it's using a teared pricing system. By the way, and

4:04 Speaker 1: we've covered this on the show, Live Nation and Ticketmaster

4:06 Speaker 1: they have a little bit of a history. This will

4:09 Speaker 1: come as a shock to precisely know what, I'm sure

4:11 Speaker 1: of making certain statements about commitments to their customers in

4:17 Speaker 1: terms of transparency and so forth, and then not following

4:20 Speaker 1: through on much or any of it. Just to be clear, okay,

4:25 Speaker 1: but apparently they made this commitment tell fans twenty four

4:28 Speaker 1: hours in advance if they're going to be using dynamic

4:31 Speaker 1: pricing or some sort of tiered pricing system. CMA said, quote,

4:36 Speaker 1: this means fans will know beforehand if there are multiple

4:39 Speaker 1: prices for the same type of ticket, and that more

4:42 Speaker 1: expensive ones will be released once the cheapest sell out unquote,

4:46 Speaker 1: by the way, just to be clear if it's the

4:49 Speaker 1: same type of ticket. In other words, because there's always

4:51 Speaker 1: some form of tiered pricing in that if you're buying

4:54 Speaker 1: tickets for a show at an arena, you know, front

4:57 Speaker 1: row tickets are going to be more expensive than the

4:59 Speaker 1: middle middle row are going to be more expensive than

5:02 Speaker 1: you know, they call them the cheap seats way in

5:03 Speaker 1: the back, right. But what they're saying here is the

5:07 Speaker 1: same type of ticket, there will not be multiple tiers.

5:10 Speaker 1: So in other words, a front row ticket won't cost, however,

5:13 Speaker 1: many hundreds or thousands of dollars for one person and

5:16 Speaker 1: even more money for another person for that same type

5:18 Speaker 1: of ticket. So because there's there's always a tier system

5:22 Speaker 1: of sorts, but but but not a predatory and abusive one,

5:28 Speaker 1: necessarily should they be using if you want to frame

5:30 Speaker 1: it that way, I have a lot of mixed feelings

5:32 Speaker 1: about it myself. Okay, So it says your ticketmaster will

5:34 Speaker 1: also inform ticket buyers who join a queue of the

5:39 Speaker 1: range of ticket prices available and will inform those in

5:42 Speaker 1: 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.

5:50 Speaker 1: The Watchdog launched its investigation into Ticketmaster in September twenty

5:54 Speaker 1: twenty four following the sale of Oasis tickets, which some

5:58 Speaker 1: news reports say involved dynamic pricing and saw large spikes

6:03 Speaker 1: and the prices of tickets during the sale. Yeah, so

6:06 Speaker 1: that was a year ago, and I remember we talked

6:07 Speaker 1: about it on this show. In fact, it was a

6:09 Speaker 1: very popular segment. If you just want to find the segment,

6:11 Speaker 1: you can find it on YouTube on the IPM Nation

6:14 Speaker 1: YouTube channel. But we put that up because you know,

6:17 Speaker 1: something people were very interested about. And at that time

6:20 Speaker 1: it was being reported that they were using dynamic pricing.

6:25 Speaker 1: But according to this this watchdog group is saying that

6:28 Speaker 1: actually they did not in that instance. So that's interesting.

6:32 Speaker 1: So the sale was marred again. Talking about the Oasis

6:36 Speaker 1: tickets that went on sale in the UK a year ago.

6:38 Speaker 1: The sale was marred by technical problems which may have

6:41 Speaker 1: been linked to a large number of bots attempting to

6:44 Speaker 1: buy up the available tickets. And we've talked about that

6:46 Speaker 1: a lot on the show too. These bots that buy

6:49 Speaker 1: up tickets on behalf of the secondary market, who then

6:54 Speaker 1: take those their scalpers. They're scalpers, these secondary market ticket sellers.

7:00 Speaker 1: They buy up the tickets. They use bots to buy

7:02 Speaker 1: up the tickets. Why would you use bots? Why wouldn't

7:04 Speaker 1: you just go in as one person and just buy

7:07 Speaker 1: a whole bunch of tickets, because supposedly ticket Master prevents

7:11 Speaker 1: you from doing that. They put limits supposedly, Again, they

7:15 Speaker 1: don't always keep their word. They don't always follow through

7:17 Speaker 1: on these things, and there are examples where they haven't.

7:19 Speaker 1: But they're supposed to limit how many tickets you can

7:23 Speaker 1: buy at once to prevent scalping. Doesn't always work out.

7:26 Speaker 1: But if you have bots, if you have multiple bots,

7:30 Speaker 1: Ticketmaster doesn't know that all these different bots are buying

7:33 Speaker 1: multiple tickets. Or you know, if you have if you

7:36 Speaker 1: have one hundred bots and they're each buying five tickets

7:39 Speaker 1: because you have a five ticket limit, but you've got

7:41 Speaker 1: one hundred bots, so then you've just bought you know,

7:45 Speaker 1: five hundred tickets, right, or if you have one thousand bots,

7:48 Speaker 1: five thousand tickets. I think, right, I'm bad at math,

7:51 Speaker 1: but anyway, you get my point. So in March of

7:57 Speaker 1: this year, the CMA said it had identified two key

7:59 Speaker 1: problems with Ticketmaster's sale of Oasis tickets. Okay, so so

8:04 Speaker 1: again not the dynamic pricing the watch this watchdog group

8:06 Speaker 1: 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

8:15 Speaker 1: platinum and sold them for nearly two and a half

8:17 Speaker 1: times the price of equivalent standard tickets quote without sufficiently

8:21 Speaker 1: explaining that they did not offer additional benefits and were

8:24 Speaker 1: often located in the same area of the stadium unquote.

8:28 Speaker 1: So in other words, so that's I think is pretty deceptive. Right,

8:31 Speaker 1: So they offered you a platinum ticket that was two

8:33 Speaker 1: and a half times more money, but you didn't actually

8:37 Speaker 1: get anything extra. It's the same it's the same seat.

8:40 Speaker 1: You're literally you know that expression when you buy a

8:43 Speaker 1: brand name product instead of instead of the generic version.

8:46 Speaker 1: You're just paying for the name, and this this is

8:48 Speaker 1: an example of that. You're literally paying for the name

8:50 Speaker 1: you're playing for. You're paying for something that's quote unquote platinum,

8:54 Speaker 1: but it's actually the exact same thing. So that's pretty sketchy.

8:58 Speaker 1: And the second thing that CMA said went wrong. They

9:01 Speaker 1: alleged that Ticketmaster quote did not inform consumers that there

9:05 Speaker 1: were two categories of standing tickets at different prices, with

9:09 Speaker 1: all of the cheaper standing tickets sold first before the

9:11 Speaker 1: more expensive standing tickets were released unquote. The CMA then

9:15 Speaker 1: appeared to put pressure on Ticketmaster, writing in a letter

9:17 Speaker 1: in July that it had quote discharged its obligation to

9:20 Speaker 1: consult with Ticketmaster as no undertakings have been offered or

9:24 Speaker 1: agreed unquote. That appears to have now changed, with the

9:29 Speaker 1: CMA saying that Ticketmaster had agreed to several undertakings in

9:32 Speaker 1: response to the CMA probe. Okay, so this progress, CMA said, quote.

9:37 Speaker 1: These undertakings have been provided to the CMA voluntarily and

9:40 Speaker 1: without any admission of wrongdoing or liability. Ticketmaster has stopped

9:44 Speaker 1: using platinum labels in the UK, separate to providing undertakings.

9:49 Speaker 1: Fans who spend their hard earned money to see artists

9:51 Speaker 1: say love deserve to see clear, accurate information. We can't

9:56 Speaker 1: ensure every fan gets a ticket for events as popular

9:59 Speaker 1: as the Oasis, but we can help ensure the next

10:01 Speaker 1: time an event like this comes along, fans have the

10:04 Speaker 1: information they need when they need it unquote. According to

10:08 Speaker 1: Sarah Cardell, a CMA Chief executive, the CMA also indicated

10:13 Speaker 1: 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

10:20 Speaker 1: was being reported that yes, they were using dynamic pricing,

10:23 Speaker 1: and that was the crux of the issue. But this

10:24 Speaker 1: watchdog group actually clears Live Nation on this and says, quote,

10:28 Speaker 1: we welcome the CMA's confirmation. Oh I'm sorry, Ticketmaster. Oh

10:34 Speaker 1: let me back up, let me back up. Okay, Here's

10:36 Speaker 1: here's what CMA said. And then Ticketmaster responded, So, CMA said, quote,

10:39 Speaker 1: While many fans were under the impression that Ticketmaster used

10:42 Speaker 1: an algorithmic pricing model during the Oasis sale, with ticket

10:46 Speaker 1: prices adjusted in real time according to changing conditions like

10:49 Speaker 1: high demand, also known as dynamic pricing, the CMA has

10:52 Speaker 1: 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,

11:00 Speaker 1: we welcome the CMA's confirmation that there was no dynamic pricing,

11:04 Speaker 1: no unfair practices, and that we did not breach consumer law.

11:08 Speaker 1: To further improve the customer experience. We voluntarily committed to

11:11 Speaker 1: clearer communication about ticket prices in queues. This builds up

11:15 Speaker 1: our capped resale. This builds on our capped resale, strong

11:19 Speaker 1: bought protection and clear pricing displays. And we encourage the

11:22 Speaker 1: CMA to hold the entire industry to these same standards.

11:25 Speaker 1: Unquote in comments earlier, well actually hold on, wait, let

11:29 Speaker 1: me stop on that quote for just a second. So

11:31 Speaker 1: they're saying, I mean, it's great that they're making all

11:35 Speaker 1: these commitments. We'll see if they follow through, but it's

11:37 Speaker 1: kind of interesting that one little last part we encouraged

11:39 Speaker 1: CMA to hold the entire industry to these same standards.

11:42 Speaker 1: What's funny about that to me is so that sounds like, Okay,

11:45 Speaker 1: 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,

11:50 Speaker 2: but who else is there.

11:53 Speaker 1: You gotta I mean, just keep in mind Live Nation

11:57 Speaker 1: and ticket Master, it's the same company. They they can control.

12:02 Speaker 1: They controlled the concert industry. I mean, obviously they are independent,

12:06 Speaker 1: smaller promoters throughout the country, throughout the world, throughout the UK.

12:10 Speaker 1: But this is a monopoly. This is absolutely a monopoly.

12:15 Speaker 1: So that sounds a little petty. Oh, we hope you

12:18 Speaker 1: hold everyone to the same standards. Yeah, okay, but you

12:24 Speaker 1: guys are the ones that we're concerned with because.

12:26 Speaker 2: You guys are the ones who control everything, right, So

12:31 Speaker 2: I just thought that was interesting.

12:32 Speaker 1: In comments earlier this year, Live Nation CEO Joe birch

12:36 Speaker 1: Told said that more often than not, dynamic pricing results

12:41 Speaker 1: 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

12:47 Speaker 1: might be the case if a show, I mean, if

12:49 Speaker 1: a show isn't selling very well, then dynamic pricing would

12:52 Speaker 1: of course make for lower prices.

12:54 Speaker 2: But that's not where we get concerned. A show that

12:57 Speaker 2: isn't well. I don't know.

13:00 Speaker 1: Sometimes sometimes big tours end up underperforming. But birch Told

13:06 Speaker 1: said at a JP Morgan Chase conference in May, quote,

13:10 Speaker 1: most of our so called dynamic pricing is actually I'm

13:13 Speaker 1: reducing the price of tickets that haven't sold yet, because

13:16 Speaker 1: I see that the market clearing price. I'm not quite there.

13:20 Speaker 1: By definition, you can never raise the price of a

13:22 Speaker 1: ticket you've already sold. So that's why most of your

13:25 Speaker 1: 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

13:31 Speaker 1: that supports that. I understand his argument. I'm skeptical, I'm

13:35 Speaker 1: always skeptical of these people, but I understand his argument.