AEG’s Ticketing: Perspective From The Expo

Here in Los Angeles, Feb. 4, the day after the AEG Expo ended at the JW Marriott and the day Pollstar Live! begins, it’s been about trying to figure out what the new AEG ticketing system is going to be about, and when. We’ve got some answers and some speculation.

Pollstar talked to the big players involved, including AEG President Tim Leiweke, AEG Live President Randy Phillips, Outbox Enterprises’ Fred Rosen (former CEO of Ticketmaster) and others involved on the venue level. We also got some opinions from those outside the company. Unfortunately, at this point, we don’t have too much straight from TM about AEG’s venture but we do have Bob Lefsetz’ opinion, which came out in his letter Feb. 3, and Phillips’ response.

We will have a more extensive piece in our next issue. Consider the following “notes from the Marriott floor” until then – a quick understanding of how AEG views this venture.

To recap, when Live Nation merged with Ticketmaster, the U.S. Justice Department said a concession must be to allow competitors to use TM’s technology for their own, white-label systems. Instead, AEG, with former TM exec David Goldberg as point, shopped around and decided the technology of Outbox Enterprises was a better choice.

There are several reasons for that, according to the people we talked to.

One is controlling the manifest. The rhetorical question is, with AEG investing in so much real estate, including possibly the new Farmers Field football stadium, why use a third-party system as a liaison between it and the public? AEG argues it interacts directly with the public – the fans, the concertgoers – be it good or bad, in every other way. Only ticketing requires the third-party system of TM, which considers itself the owner of the data.

Some could argue that AEG liaising with Outbox Enterprises is still a third-party system. Outbox would argue they have no control of the data – which will be controlled by the venues – and Outbox will operate quietly in the background, away from the public eye. Each venue will be empowered with that information and can announce onsales independently from a “nationwide” sale date – the common practice of a big North American tour, such as Madonna or Phish. That being said, AEG Live did ask the big question at some point – could Outbox Enterprises handle a Bon Jovi onsale – and decided it could.

Here’s the arguments – not just for why Outbox can handle a major onsale (despite the pre-sales and fan sales that already dilute the model) but for why AEG backs a new model in general. First of all, Outbox uses open-source technology – that newfangled stuff called cloud technology. AEG and Outbox would argue that, unlike Ticketmaster, which has a centralized hub of servers that has served them well for 30 years but is slowed by a software interface that connected the system to the then-emerging Internet, Outbox is better prepared for the next wave of technology. Using open-source technology, even if one part of the interweb may crash, there are still many other avenues to get to the data, so a major onsale is not a problem. Sure, some in the company believe there will be bumps and snags and even “disasters,” but they believe it will be smooth sailing after the wrinkles are ironed out. And when AEG cites 24 months as a launch window, it’s not about getting out of TM contracts. AEG is fully aware and respectful of Irving Azoff’s and Michael Rapino’s ability to keep TM contracts established; the 24 months, as was explained at the Expo, is for a slow and careful launch of the new business model.

The only question is, who is handling the infrastructure out there in the cloud? Amazon is known for outsourcing its servers, and then there is Cisco (which was mentioned as a possible source) – and we have heard there could be an AEG investment to make sure all the data is stored on a massive, well-functioning cloud.

Outbox will be backend, just like New Era Tickets has supported the websites of Global-Spectrum’s minor-league baseball stadiums. No one will hear, nor care, about Outbox’s brand and Outbox, although it has its website, it will never sell tickets there. That website,, is to only show the functionality of the system. That, we hear, includes the power to view seating with 360 views.

And AEG will not sell tickets on a central website. It will be the websites for its properties, like Staples Center, The O2 arena in London, Coachella, etc. And the data will be controlled not by AEG but by the venue managers, who can determine when to launch onsales for their markets, and can raise or lower convenience fees at their will. Is the host hockey team playing a cellar rival? The convenience fee could be dropped to zero to get butts in seats.

Clearly, AEG disagrees with industry commentator Bob Lefsetz, who says that an online local boxoffice kiosk idea is antiquated – an “eighties model.” Lefsetz argued in his email blast Feb. 3 that consumers are accustomed to centralized websites – want to buy something? Want to go somewhere? And when they want to buy a ticket, it’s, no matter how much they complain about it.

Randy Phillips responded to the opinion quickly. And Leiweke and Rosen voiced the same reaction – that consumers do not need a centralized place for their ticketing. Most tickets, they cite, are purchased in a 50 mile radius of the local venue. So why shouldn’t the venue’s website sell the tickets for its sports and concerts? One example was, which Leiweke said sold 78,000 tickets this year. He also noted that within 24 hours of Farmers Insurance announcing that it would be the naming sponsor for AEG’s proposed football stadium, the company’s website got 8.4 million hits. Another example? There was a time when an audiophile could see, on a 45 rpm single, the name and logo of the record company and could determine what the record would sound like. Now, music lovers would not be able to tell you what record label Taylor Swift is signed to.

Of course, AEG delegates are excited about what this means for their company but, hey, they’re part of the choir. There are still a lot of unanswered questions despite the hearty first handshake between AEG and Outbox. Paperless ticketing? What of QR codes (Google it). And AEG has been reticent to embrace dynamic pricing – would that be up to the venues to decide, or will the system even have that functionality? Will AEG, as a partner with Outbox and Cirque du Soleil, move the model outside its 100-plus venues?

One thing that is noted is that – under the pretense that there are now two major players in ticketing as several AEG representatives have said – the two companies will need to work with each other. As was said, Live Nation will sell a show at a building that uses Outbox, and AEG will sell shows in Ticketmaster buildings.

It’s going to be an interesting two years.