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Being Greedy At Pollstar Live
Is greed good, as proclaimed by Michael Douglas’s Gordon Gekko character from the film “Wall Street?” As usual, there’s no real answer and it depends on who you ask.
But one thing the panelists on the “Why The Gordon Gekko Manifesto Is Hurting Everyone’s Business” discussion might agree on is that the consumer is the one finally getting squeezed, having exhausted every other avenue over the past few decades.
It was quite a group to give a history lesson on the topic, including Nederlander Concerts CEO Alex Hodges (who’s been on every side of a deal), APA managing partner Troy Blakely and Steve Martin, president of North America for The Agency Group.
When promoters started getting into the business of owning venues, artist managers and agents began wanting a bigger piece of the pie, figuring the promoters were now getting the ancillary incomes from parking, food and beverages, etc. If your act wants another $25,000, what do you add to now? The ticket price.
“I think this past summer kind of showed a lot of that,” said Carl Hall, director of events for Rupp Arena in Lexington, Ky. “It’s the first year the customer said, ‘I’m done,’ and stepped back away from that because we’ve piled on too many fees. …
“We’ve got to find a way to restructure it so there’s money left for everybody and not eliminate the ability of the customer to pay [and cover the costs] and still feel like he enjoys the show.”
Martin said the deal needs to be restructured or there might not even be anyone left to play the buildings. Record companies are not doing nearly as much artist development these days, and someone is going to need to pick up that slack.
“A lot is going to need to come from new artists and agents,” Martin said. “We need to leave some money on the plate to reinvest and have to let some people make some money to continue in this business.” Of course, that can be difficult when a band asks Blakely for more money and will sign with Martin if he can’t do it.
Live Nation’s Jeff Trisler, president of the Northwest division and moderator of the panel, said panelists agreed that the Eagles’ Hell Freezes Over tour in 1994 was sort of the defining “wow” moment for modern-day ticket price inflation.
“For myself, personally, I kept thinking, I guess we can get away with this as long as the consumer goes along with it. They might bitch and complain about it, but they’re still showing up in large enough numbers to support what we’re doing. Then came 2010.”
Oftentimes the natural response to a slow night is to start discounting tickets. Hodges says they can all agree that discounting doesn’t solve the problems. And that’s not a matter of greed.
Being the first in line to buy $65 tickets and then finding out the guy next to you waited and got them for $15 takes that fan out of the equation next time and only succeeds in making hardcore fans feel like chumps.
However, SMG senior vice president Jim McCue says discounting can be done right and just needs to be done intelligently. He told of a success story with Walking With Dinosaurs before he joined SMG – a discount with one big difference from the norm.
“We’re going to do it at the beginning, and we’re going to tie it into a media partner and only for a limited time,” McCue said. “So those that wanted to be there at the beginning got the discount, and they ended up promoting the show by having the tickets in hand and being happy about the deal.” McCue said they were able to do the same thing in each market, and built up a level of buzz otherwise impossible with traditional media advertising.
Despite the same goals of selling tickets and making a profit, which Blakely said should not be considered greed, there was the common disagreement on all-in pricing, tiered seating, dynamic pricing, scalping and the usual. Blakely said they might not ever have the answers. But someone else will.
“We up here are not the answer,” he said. “We have been doing this for a long time and we can give you the information of where we’ve been, how we got here.
“But it’s somebody between 18 and 28 years old and probably sitting out in this audience or in the hallway right now that’s going to come up the solutions. It’s your business for the next 50 years.”
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