Perhaps the only topic receiving more attention these days than digital downloading and the unstable footing of the major labels is concert ticketing. As record sales have bottomed out, the revenue accrued from touring has not only remained strong but has in fact increased. This is one reason that “360 deal” has now become a commonly uttered term in the industry. Concert earnings and merchandise sales, which at one point were largely immune to being tapped by the labels, are often included in these umbrella style deals that trade overarching representation for a cut of everything. Madonna signed such a contract with Live Nation in 2007 for $120 million that combined her recording, publishing and touring revenues.

 

Since concert tickets are continuing to sell it is no surprise that more people are trying to get into the game. It is well known that goliaths Live Nation and Ticketmaster are hoping to join forces (if they can get past all of the anti-trust concerns) but a new addition to the playing field is a little company by the name of Wal-Mart. In a different twist on the ticketing front, Wal-Mart will work on an act-by-act basis, choosing specific artists to work with rather than selling tickets to anything/everything. In return, the artist receives tons of promotion and money. Wal-Mart’s debut artist partnership is with Bon Jovi whose next tour will be advertised in store flyers. In addition, little Bon Jovi stores will be constructed inside each retail location where fans can purchase merchandise, DVDs, etc. The next deal was signed with KISS, whose ticketing requires fans to purchase a minimum of $50 in merchandise in addition to their ticket to the show.

 

In another twist, the tickets will only be available in-store (helping to bring in the foot traffic that Wal-Mart craves). This means that fans must be present to purchase tickets and there is a limit of two per customer. Additionally, in an attempt to fight off scalpers, every entrant to the show must provide their receipt from purchasing the ticket. While this all sounds very dry and inconvenient, it is hoped that the sales process will be an event all on its own. People will camp in the parking lot the night before and Wal-Mart will sell hot dogs, drinks and tents to waiting fans. There will even be entertainment from acts sponsored by Viacom, who beat out Disney in a bidding war.

 

So, what do Live Nation and Ticketmaster think of all of this? Irving Azoff, Chairman and CEO of Ticketmaster Entertainment, has stated that he has no problem with it as the hope is that it will help ease their proposed merger along towards approval. He has even released Ticketmaster venues from their exclusives for these Wal-Mart deals.

 

The real question however, is what this means for fans. On the one hand it proposes a method that will allow true fans to get the good seats by lining up and reducing the second-market selling done by scalpers and unauthorized websites. There are some points of issue that must be addressed though. Should fans really be pushed to purchase merchandise, especially $50 worth in addition to their ticket? That seems like quite the underhanded thing to do to your fans. Is it not good enough that they want to pay to come see you perform that you have to force your overpriced action figures on them? Another issue is the sale process. Most people over the age of 18 or 20 are not interested in sleeping in a parking lot in order to get tickets to a show and my guess is that the average KISS or Bon Jovi fan is not 16. Even with this aside there is the fact that most people have jobs and cannot take a day off to stand in line outside a Wal-Mart. Are they simply out of luck? What about those who don’t live anywhere close to a Wal-Mart? In today’s world the thought of having to go buy tickets in person and not being able to buy them over the phone or online seems arcane and, quite frankly, like a waste of time.

 

The Wal-Mart ticketing style seems like one step in the right direction followed by about three in the wrong. It is unclear if their approach will take and how fans will respond but it is not the only new method being tested. Another interesting approach is that which Toronto-based hip hop artist k-os is using for his 10-date Canadian tour that begins next Thursday (April 30) in support of his new album “YES!”. Conceptualized by k-os’ manager Terry McBride, who is also the chief executive of Nettwerk Music Group, the tour will ask fans to pay what they want after they have seen the show. The move is a similar “tipping jar” approach to that used by Radiohead on their last album. In this case however, fans will be asked to make a “karma” donation inside the venue (about 2,500 capacity) and fans can also donate to the David Suzuki Foundation. Those who make donations will receive a “fan-mixed” version of the new album called “YES! It’s Yours”. As McBride stated, “I don’t see it as an experiment. It seems intuitive to me. The more chances people have to see k-os, the stronger his fan base will be.”

 

As with everything else in the music industry right now, the approach to concert ticketing is up for debate. Should the system be more regulated and rigid (as with Wal-Mart) or should we use a more flexible method (as with k-os)? It seems that only time will tell and that it will be the fans who inevitably make the final decision. As with downloading, radio listenership and album sales it is the fans to demonstrate whether or not a model is or will continue to work.

 

Sources:

http://www.nme.com/news/u2/35540

http://lefsetz.com/wordpress/index.php/archives/2009/04/01/wal-mart-enters-ticketing/

http://www.billboard.com/bbcom/news/k-os-embraces-name-your-price-strategy-for-1003963588.story