Special Anniversary Issue
A look at a decade of change and evolution at the box office
- by Dave Brooks
- Published: January 1, 2012
We’ve always had a special place in our heart for ticketing here at Venues Today. Not only have we been producing the INTIX Quarterly for members of the International Ticketing Association since Oct. 2003 (with a cover story on the INTIX’s 25th anniversary), our very first issue featured a front page cover story on changes to the ticketing landscape.
“Tickets & Technology: Perfect Together” — July 2002 Magazine
In that first issue of Venues Today, James Zoltak wrote:
The days of waiting in lines overnight or repeatedly dialing Ticketmaster in hopes of getting, say, some coveted ‘Stones or Lakers tickets are long gone. Instant gratification is just a “Control-P” away.
It may seem silly now, but the idea of buying tickets online and printing those same tickets on your home printer was a fairly revolutionary concept in 2002. That shift away from the outlet model, with fans queuing up in virtual waiting rooms instead of spending hours standing outside in the cold, not only changed the way consumers bought tickets, it changed the meaning of the term ‘ticketing company.’
“Suddenly it wasn’t about having a big outlet distribution system,” said Mike McGee, former executive VP at Ticketmaster. “Systems that once ran on a closed-network system were now competing against web-based software that was much cheaper to operate.”
The size of a company’s retail distribution network no longer mattered — power was now measured in bandwidthand peak traffic. Companies were expected to handle a million online visitors for a popular on-sale that might only last 10 minutes.
The last 10 years have brought a monumental shift in ticketing, both in terms of who’s playing in the game and how the game is played. In celebration of our 10 years in publishing, Venues Today has compiled some of the top ticketing stories of the last decade and rounded up many of the biggest players in the industry to share their memories of a business that looks much different in 2012.
UNLV Tickets Goes Online: Rise of the Regional Ticketing Company
It was in our very first issue in July 2002 that we detailed the efforts of a college arena in Las Vegas attempting to set its own path with the creation of a regional ticketing system by then-campus venue director Daren Libonati. The vision was to create a system that offered more control over the way tickets were listed and priced.
UNLV Takes Ticketing In-House. Why? Because they Can – July 2002 Magazine
In the page 20 article, Linda Deckard wrote:
Libonati said he decided to take all ticketing in-house because he realized “there is a very large pie out there we’re not getting, although we’re the makers of the memories and product.”
Working with Paciolan, Libonati and crew created a branded ticketing system that gave him full control over marketing, pricing and customer service. The Thomas & Mack Center and Sam Boyd Stadium were the first ticketing companies to use UNLV tickets.
“Most people thought we would fail, but 10 years later, that decision has been the greatest asset of our operation. It’s allowed us to grow new revenues that didn’t exist before,” said Libonati, who now works for Justice Entertainment Group, a Las Vegas firm that books the Thomas & Mack Center and still runs UNLVtickets.
“We’re having conversations with arenas all around the country, looking to share that blueprint plan” Libonatisaid. “We are sharing and having business discussions with several entities on how an in-house ticketing agency can benefit their marketing efforts. At the end of the day, ticketing is marketing. The two go hand-in-hand.”
In fact, the regional ticketing model has become an important business for Paciolan, which powers a number of regional systems likes CapitalTickets, managed by the Ottawa Senators. Firm Veritix provides the back-end software for TicketHorse, utilized by the four teams and multiple venues managed by Kroenke Entertainment in Denver.
StubHub Gains Legitimacy with MLB Deal
Scalpers have never beenparticularly popular with anyone involved in live music. Promoters and venues fume over brokers who mark up tickets without giving back to the production, while fans often get zapped by high prices and sticker shock or, sometimes, bogus ducats.
In fact, in a July 2005 article called “Faked Out,” writer Pam Sherborne detailed how scalpers were utilizing the ease of print-at-home technology to boost their sales volume and, in some cases, counterfeit tickets. According to the article, over 200 people tried to get into a May 2005 U2 concert in Boston with counterfeit print-at-home tickets, only to be turned away at the gate. In some cases, the scalper would reprint the same ticket five times and sell it to as many people.
Warning the public about scalpers was a public relations mess and, despite the bad PR, slowly over time established secondary marketplaces like StubHub and TicketNetwork were able win back public opinion. Many teams who had completely banned season ticket holders from reselling their ticket got angry calls from fans who felt it was their “inalienable right” to sell tickets to a game they might not be able to attend. Others wanted to make a quick buck and flip tickets for a game that might feature a famed slugger or a hot upstart pitcher.
Sites like StubHub allowed anyone to sell any ticket on their site, and unlike shady scalpers in the stadium parking lot, the company guaranteed every ticket it sold. As many on both sides of the business began to take a second look at the secondary market, StubHub made a bold move that would forever cement its place in public opinion — it would become the official marketplace for resold baseball tickets.
StubHub Inks Legitimacy in MLB Deal — Aug. 8, 2007 VT Pulse
Dave Brooks wrote:
The other big component to come out of the deal is StubHub’s plans to open ticketing windows at the bulk of the major league ballparks it works with. (Spokesperson Sean) Pate said he envisioned a StubHub-branded ticketing window near the box office where fans could pick up their tickets.
For years, venues and teams had fought to make scalping illegal, and suddenly, many box offices were giving resellers space at the window. The team would get a chunk of the money, and StubHub would get the validation and client volume it had always wanted. Suddenly the secondary market was everywhere, with the National Football League, the 2010 Winter Olympics and artists like Lynyrd Skynyrd and Madonna getting into the game.
“The integration with the secondary market painted a much clearer picture of who was actually attending the game,” said Dan DeMato from FutureTix, a consulting agency. “Suddenly the guy who had bought all of his tickets in the past from a broker was now your customer because he had to hand over his email address.”
It also gave teams stronger analytics about how their tickets were sold — better pricing meant lower margins for scalpers who had thrived on marking up hot shows while taking losses on weak events.
“In the 1980s if a broker bought a ticket, they wanted to double their money. Now, brokers are lucky if they can mark itup 25 percent,” said Don Vaccaro from TicketNetwork, one of the world’s largest manufacturers of ticket broker software. “They’re working on much more volume and much less margin then they ever did before.”
The flipside to the StubHub integration with MLB and Tickets.com (who tickets the majority of clubs) is that most ticketing companies are now finding they have to integrate their software systems with additional outside technology firms like Qcue and Digonex, or develop APIs to cull more data from sites like Facebook.
“The ticketing systems are scrambling to catch up,” said DeMato. “There are vendors operating on 20-to-30-year-old architecture, and many find it’s like trying to attach a square peg to a round hole” to upgrade their systems.
Other ticketing companies are working hard to block scalpers through innovations like paperless ticketing. Ticketmaster has made a number of its top concerts Will Call-only, fighting groups like the Fan Freedom Project, funded by StubHub and TicketNetwork who are lobbying state legislatures around the country to outlaw paperless tickets.
“Paperless ticketing and transferability do not have to be mutually exclusive,” argues Jeff Kline from Veritix, a newplayer in the space created by Cleveland Cavaliers owner Dan Gilbert. The company’s Flash Seats marketplace, allows fans to digitally resell their tickets on a paperless platform.
“We want the law to stay the way that it is,” Kline said. “We have fans and brokers who use the site to buy and sell a lot of tickets because that’s where the marketplace is.”
Not all attitudes about scalpers have been rosy. Live Nation and Ticketmaster have created their own advocacy group, the Fan First Commission, to push back against resale. In June, two brokers running a company called Wise Guys pleaded guilty to Federal charges for using computerized “bots” to mimic humans and attempt to buy up tickets and resell them for millions of dollars.
“No one in the promotion business has a soft spot for scalpers,” said Dan Teree, founder of Ticketfly, a San Francisco startup that rose out of the ashes of Ticketweb. Teree said his company is looking at ways to verify buyers over Facebook, and use dynamic pricing to get closer to the market price of a ticket — an amount Dan DeMato from FutureTix says is “typically the price someone is willing to pay for it five minutes after it goes on sale.”
“If you figure out how much a consumer is willing to pay for a ticket, then you can lower the margins on what a scalper can make and weed them out of the market,” Teree said.
Paciolan sold…and then sold again
In our July 2010 issue, Venues Today ran an interview with Paciolan CEO Dave Butler appropriately titled “Back on the Prowl.”
It was a heady time for the Irvine, Calif.-based company, which had been purchased by Ticketmaster in 2007, only to be sold back to its largest investor in the beginning of 2010 and essentially allowed to operate independently. Many of Paciolan’s clients, who had waited on the sidelines for three years, responded with a boost of confidence.
“We’re seeing a lot of clients come to us and say that they want to extend their agreement,” Butler said during the interview. “We’ve been very fortunate and we’ve had 10 major renewals in the last 60 days.”
So why did Paciolan ever sell in the first place? Mainly, because of money, said company president and founder Jane Kleinberger.
“The company was profitable and debt free for 20 years and then, in late the 90s, we took our first round of outside capital in order to grow the company. It was a conscious decision that propelled us into new markets,” said Kleinberger. “When we sold the company to Ticketmaster everyone who ever put a dime into Paciolan was ecstatic with their return.”
And everyone who was a client of Paciolan subsequently freaked out. There were plenty of reasons. It wasn’t long before Ticketmaster announced its next merger, a deal with Live Nation, and many small production companies didn’t like the idea of their biggest competitor controlling their ticketing information.
Ticketmaster, for its part, was motivated by continued growth, said McGee. The company was facing a showdown with its biggest client (and soon to be competitor) Live Nation and the deal with Paciolan “was an opportunity to secure inventory that was already in place,” he said. “The challenge was integrating the two platforms – one was enablement and one was not.”
Some venue managers were worried that Ticketmaster wouldn’t continue to update the Paciolan platform, while others simply wanted to do business with an alternative to the ticketing giant.
“We had to go in and talk to the clients and tell them that the reason they chose one over the other was not going to be compromised,” McGee said.
Back to the Future: Paciolan is Independent Again — March 10, 2010 VT Pulse
Linda Deckard wrote:
“I’ll never forget that fateful Thursday when I was told about it,” said Jack Lucas with TicketsWest. In 23 years, TicketsWest has only had two backend programs, its legacy program and then Paciolan. “When you do decide to do a transition, it’s a major thing. You think long and hard before you put your staff, clients and everybody else through it.”
Lucas now admits it took every ounce of his composure to keep his cool during those early days of the Paciolan/Ticketmaster merger.
“My team looks to me when there’s chaos and anxiety and they look for someone who can remain calm,” he said, adding that he kept his sanity by constantly communicating with CEO Butler and his client base.
“When Comcast-Spectacor eventually acquired Paciolan, it didn’t create any panic for us,” he said. “I was, and remain, quite comfortable.”
As for Paciolan, Kleinberger said the ticketing firm is run more independently now than it ever was in the past.
“We don’t have investors who are expecting 100 percent year-over-year growth,” she said of Comcast-Spectacor. “They love and appreciate our steady, methodical growth that we’re able to continue to deliver to our clients.”
The Great Merger of 2010
Like all great things in ticketing, the merger of Live Nation and Ticketmaster began — and ultimately concluded — at an INTIX conference.
It was early January 2009 on the trade show floor of the Salt Lake City Convention Center when Blackberries and iPhones began to buzz over a story that had just appeared in the Wall Street Journal. Live Nation, the world’s largest concert promoter, was set to merge with Ticketmaster, the world’s largest provider of tickets.
The news came as a shock because for months leading up to the deal, Live Nation had been threatening to start its own ticketing company with the help of German-firm CTS Eventim and a marketing plan to couple the next ticketing system with a promise for content. The sudden change of course prevented what many thought was going to be a bloody war between the two firms and, instead, took over a year for the government to approve.
Massive Merger Sends Music Biz Reeling — VT Pulse, Feb. 11, 2009
Dave Brooks wrote:
The deal would give Live Nation access to a robust ticket platform after suffering an embarrassing crash with their own Live Nation platform going into its first major on sale with alt-rockers Phish, which (CEO Michael) Rapino characterized as “nothing that we didn’t expect when you launch a platform as large and wide as ours.” For its part, Ticketmaster gets access to Live Nation’s massive talent pool and entertainment content for venue clients.
The deal took over a year to gain approval from the U.S. Justice Department, which only signed off after Ticketmaster agreed to sell Paciolan to Comcast-Spectacor and allow AEG to license its software until it could find a new ticketing partner.
“That year spentwaiting for the deal to go through meant a lot of work for us and a lot of uncertainty in the marketplace, everything essentially came to a standstill,” said Fred Maglione with New Era tickets, a firmed owned by Comcast-Spectacor that was instrumental in the deal.
“The Justice Department was very thorough in their investigation and a couple of us spent the better part of four to five months working on this, providing documents and presentations,” he said.
Looking back, McGee said ultimately that the merger made sense with each company trying to move forward together instead of going at it alone.
“Were some things done wrong? Absolutely. But I can’t tell you people sat in dark room and plotted this out. A lot of it just happened,” McGee said.
Rosen Returns With Epic Ticketing Deal – VT Pulse, Feb. 8, 2011
Dave Brooks wrote:
The man responsible for helping to make Ticketmaster a dominant force has returned to ticketing, signing a grandiose deal capable of turning his Montreal-based ticketing firm into a powerhouse. Ex-Ticketmaster CEO Fred Rosen and his new firm Outbox have been named the official ticketing company for AEG Facilities. The firm is co-managed by Jean-Françoys Brousseau, who created Outbox in 2005 with Cirque du Soleil, the company’s first client.
In August 2011 Venues Today reported that the new system had a name and a launch date. The AEG deal will eventually cover 105 facilities around the globe and instantly makes Outbox one of the largest ticketing platforms in the world.
Axs is a white label solution, allowing each venue to sell its own tickets or join a network but, most importantly, allowing the venue to retain the data and package and discount tickets its own way. While the axs domain will link all AEG accounts on a single platform, the 105 venues and nearly 100 tours and festivals under the AEG umbrella will utilize a branded ticketing portal tailored for each market.
“As an arena, you want [the consumer] to see you, your arena, on that Web page, not some act not playing your building, some team not in your building,” Rosen said of the axs strategy. “It comes down to who is your consumer? If you control the data at your building and you see someone has gone to three games and you have tickets to sell to another game, you can reward the people who came to your building as opposed to giving it to strangers.”
The ticketing platform was launched in Denver at the Ogden Theatre and the Bluebird Theater, both managed and operated by AEG. Bigger venues like Staples Center, Los Angeles, are expected to go on the system in the second quarter of 2012. The plan is to build axs, a website and entertainment portal, into a full-service digital content distribution system that could include a cable television station, digital video platform and mobile interface.
“More and more buildings will say, ‘why do I want a third party doing this?’” Rosen predicted. “Why do we go on sale Friday and Saturday, maybe we want to go on sale Thursday, and why should I care what is going on in someone else’s building?”
Rosen defines “fan friendly” differently than some in the ticketing business. “Saying you’re a friend to the fan when you know you’re not putting 100 percent of the tickets on sale is nonsense. What does make the experience fan friendly is acts like Paul McCartney. He had the best video screens I’ve ever seen. Wherever you sat in that building, it was like you were sitting in the fifth row. That’s Fan Friendly. People should focus on the experience, not the cost to get there.”
He predicts 2012 will be an interesting year for axs and Outbox. Rosen is clear that he didn’t invent white label ticketing, also called enablement, anymore than he invented computerized ticketing when he built Ticketmaster and left Ticketron in the dust. The key today for the ticketing and venue industries is to grasp what they have and how to leverage it.
Going forward, “you decide what you want to be,” Rosen said.
Interviewed for this article: Mike McGee, (310) 775-3793; Fred Maglione, (484) 875-7301; Dan DeMato, (516) 608-0626; Don Vaccaro, (860) 870-3400; Jane Kleinberger, (562) 712-6553; Jack Lucas, (509) 459-6106; Jeff Kline, (216) 466-8055; Dan Teree, (415) 203-4557; Fred Rosen, (310) 276-0200
- by Dave Brooks
- Published: January 1, 2012