Of the many frustrations
and indignities suffered by music consumers of late--from overpriced concert
tickets and CDs to the recording industry's campaign to criminalize Internet
file sharing--the most troubling remains the lack of choices in the business
of selling concert tickets.
The giant firm Ticketmaster has long dominated the sale of concert
tickets in the United States by signing exclusivity agreements with most
major venues. In a market like Chicago, artists either agree to use
Ticketmaster--burdening fans with "convenience fees" ranging from $5 to more
than $30 per ticket--or they are effectively barred from playing the United
Center, the Allstate Arena, the Tweeter Center and dozens of other venues
large and small.
Now Ticketmaster is adding insult to injury for consumers with a new plan
that essentially finds it morphing into a legalized scalping agency.
The company, which sold 95 million tickets last year, recently announced
that with particular artists' approval, it will begin holding some premium
concert seats in reserve to auction them off online to the highest bidders.
This means that you could be the first in line with a fistful of cash the
minute a show goes on sale, and you still might be shut out of getting the
best seats--unless you're willing to pay a lot more.
The plan was seemingly inspired by similar auctions that are already
being held by scalpers on existing online auction sites. Chicago's
alternative-country heroes Wilco take elaborate measures to thwart scalp-ers,
but they aren't always successful: Some prime tickets for the group's two
sold-out shows Friday and Saturday at the Auditorium recently sold on eBay
for $300 a pair. The face value was $32 apiece.
Ticketmaster says that it is merely bending to the will of the
marketplace--because some people are willing to pay more for good seats--and
that it is trying to usurp the role of the scalpers and ticket brokers. But
the company is really just angling to be the biggest and baddest scalper of
The trial program is set to start some time this fall. Ticketmaster
hasn't said exactly which cities will be affected, but company president
John Pleasants tipped his hand when he recently told the Sun-Times, "Chicago
would be a good market for this."
Illinois is notorious within the concert industry for being one of the
largest and most lucrative live-music markets to allow legal ticket scalping
(in the guise of ticket brokers). Other states, such as New York and New
Jersey, have outlawed the practice, but scalpers here have a powerful and
well-funded lobbying group in Springfield, and state legislators have for
years sided with them in keeping scalping legal.
Local promoters Jam Productions have crusaded against ticket scalpers for
more than 20 years. Co-owner Jerry Mickelson supports the Ticketmaster plan
as a way to short-circuit the scalpers, but only because the state has
failed to act.
"Ticketmaster is proposing a way to capture revenues that are going to a
third party that has nothing to do with the transaction or the event,"
Mickelson said. "I can rationalize it all day long because the Illinois
legislators haven't supported outlawing ticket scalpers. Don't get me wrong:
I'm all for the consumer getting the ticket at the price that's printed on
the ticket. But it hasn't been happening, and the consumers have done
virtually nothing to stand up and say, 'Hey this is wrong.'"
The last time anyone did rise up in protest against Ticketmaster
came when Pearl Jam took the company on in 1995. Although the Seattle
rockers were one of the biggest bands in the world at the time, they failed
miserably, in large part because their fans and musical peers didn't support
Pearl Jam fell into the role of crusaders by accident. On tour to promote
its second album, "Vs.," the group was seeking to keep ticket prices under
$20 when it performed at the Chicago Stadium on March 10, 1994, and at the
South Side's Regal Theatre in a surprise show for its fan club the next
The musicians were outraged when they discovered that Ticketmaster had
tacked a service fee of $3.50 onto the $18 tickets for each show. It so
happened that the federal government was investigating Ticketmaster's
dominance of the concert industry at the time, and the Justice Department
asked the group to file a memorandum about its experiences with the company.
It did, and band members Stone Gossard and Jeff Ament soon found themselves
testifying before an investigative subcommittee on Capitol Hill.
It's important to remember that the government came to Pearl Jam, not the
other way around. But the press covered the story as if the crusade was a
personal vendetta by singer Eddie Vedder, especially after the Justice
Department dropped its investigation three years later without taking any
legal action. Ticketmaster is not a monopoly, it ruled.
This decision still baffles many industry observers, who point to
Ticketmaster's exclusivity agreements. The government contended that
alternative ticketing agencies are free to do business in competition with
Ticketmaster. But how can they do that when Ticketmaster has a lock on
nearly every major venue in the United States?
Pearl Jam's plight during the years 1995 to 1998 illustrates the
difficulties of trying to tour without using Ticketmaster. The group was
able to play only a handful of shows during that time because of the
scarcity of venues that were not controlled by the company. (Among the
concerts that it did perform was a galvanizing show at Soldier Field on July
11, 1995. At the time, Soldier Field did not have an exclusivity agreement
with Ticketmaster, but it signed one a short time later.)
Though other groups, including Aerosmith and R.E.M., sent representatives
to testify against Ticketmaster on Capitol Hill, no other band joined Pearl
Jam on the barricades in refusing to tour with the company. The Seattle
rockers paid a steep price for their principled stand: After the group
stopped touring, album sales declined to a fifth of what they had been
before. And instead of thanking them, some fans actually disparaged the
musicians for withdrawing from the concert scene.
It's worth pausing for a moment to consider exactly what consumers get
when they use Ticketmaster. With a transaction that may take less than a
minute online, over the phone or at a Ticketmaster outlet, you can purchase
tickets to just about any event. The "convenience fee" is the company's
reward for this service.
According to a report in Rolling Stone magazine, that fee is divided with
30 percent to 40 percent going to the show's promoter, 25 percent going to
the ticket outlets and the rest going to Ticketmaster as its gross profit.
Suppose you don't mind standing in line and you want to avoid paying the
service fee? Too bad: Many Chicago venues no longer have on-site box
offices. You either buy your tickets through Ticketmaster, or you don't buy
them at all.
What if you have a customer service problem? Good luck trying to get a
human being on the phone to help. Ticketmaster is almost entirely automated
these days, and it doesn't even have a complaint line or a Chicago office
listed in the phone book.
Say you're buying four tickets at once; you only pay one convenience fee,
right? Wrong. The fee is charged per ticket. It is four times more
expensive to buy four tickets than it is to buy one, even though both
transactions take exactly the same amount of time and cost Ticketmaster the
same amount of money.
The steep convenience fees and the lack of customer service are two
factors that recently prompted the Colorado-based jam band the String Cheese
Incident to become the first band since Pearl Jam to attempt to battle the
Three weeks ago, String Cheese filed suit against Ticketmaster, claiming
that the company has effectively prohibited it from selling tickets directly
to its fans sans extra charges. It also protested convenience fees of as
much as $32.50 per ticket that the company added to performances by the band
at the Red Rocks Amphitheatre.
"There was a massive disconnect from when we would set a ticket price and
what people would see on their tickets," one of the band's managers, Mike
Luba, told Rolling Stone. "People are f---ing sick of it. We got sick of it,
and that's why we did this."
The String Cheese Incident isn't nearly as popular as Pearl Jam was when
it took on Ticketmaster, and it is likely to suffer even more if it is shut
out of the touring market because of its lawsuit. And it is even less likely
that other bands will join it in its fight against the company.
The bottom line, then as now, is that unless the government acts to limit
Ticketmaster's domination of the market and policies such as its online
auctions--or until consumers voice their disapproval by withholding their
concert dollars--Ticketmaster will continue to act as it always has,
charging whatever it sees fit for its services.