Ticketmaster taken to court

 Uncategorized
Mar 032004
 
Authors: Chris Hess

In order for a business to be successful, it has to find a

niche. It has to provide a certain product or service to the vast,

consuming public that no one else does. Ticketmaster, however, has

taken that niche and turned it into a chasm filled with soaring

service charges and anti-competitive practices that leave the

little guy out in the rain.

Through Ticketmaster’s 3,500 retail outlets, 19 telephone call

centers and ticketmaster.com, it sold more than 95 million tickets,

putting $4 billon in the bank, according to the company’s Web

site.

In 2000, the entertainment industry’s admission granter acquired

its closest thing to competition, the smaller ticket vendor,

TicketWeb, for $35.2 million in stock. This addition to the

Ticketmaster portfolio gave the company access to ticket sales for

small to mid-size venues, such as the Ogden and Bluebird Theaters

in Denver.

However, there are several folks out there who don’t necessarily

see these numbers as a good thing. The company, often referred to

as “Ticketbastard” on Internet message boards, has ruffled more

than a few feathers over the years.

The swelling of frustration with the country’s master of ticket

distribution began in 1994 when grunge-rockers Pearl Jam filed an

all-for-naught anti-trust complaint against the company in federal

court. The band, wanting to keep the cost of tickets to its

concerts no higher than $20, charged that Ticketmaster was a

monopoly, unfairly hiking up the cost of tickets via excessive

service charges, according to its congressional testimony.

This swelling recently came to a head when the Boulder-based jam

technicians of The String Cheese Incident decided to take the

ticket-printing behemoth to court for the same anti-trust issues.

The band alleges that besides the frustration of high service fees,

Ticketmaster’s business practices don’t allow room in the

marketplace for the band’s own ticketing company, SCI

Ticketing.

SCI Ticketing is a band-owned direct-to-fan service, which can

be used by the band to sell tickets directly to loyal Cheese Heads

for a cheaper price.

“There was a massive disconnect from when we would seat a ticket

price and what people would see on their tickets,” said Mike Luba,

a partner in the band’s SCI Ticketing service, in a recent

interview with “Rolling Stone.” “People are…sick of it. We got

sick of it, and that’s why we did this.”

According to Ticketmaster, the service charges that plagued

Pearl Jam and that are now making all of String Cheese’s incidents

a little more costly, are necessary. Part of the charge covers the

cost of the transaction being done over the computer, whether it be

in someone’s home or at the local ticket outlet. The rest of the

fee is a facility fee, and varies from venue to venue.

Ticketmaster struck a deal with concert promoting giant SFX

entertainment, now owned by Clear Channel, in 1998 that entered

Ticketmaster into exclusive contracts with most sports and

entertainment venues across the country. In exchange, SFX got to

keep whatever service fees were above a certain level, according to

an article on Salon.com.

But Ticketmaster spokesperson Larry Solters said that the

presence of one major ticketing company in the entertainment market

does nothing but benefit the consumer.

“Say you live in Fort Collins and you want to go to a show at

the Pepsi Center in Denver,” Solters said. “Without Ticketmaster,

you have to drive to venue, buy your ticket and drive back. With

Ticketmaster, you don’t have to go anywhere. You just have to ask

your self, ‘Is it worth the $4 or $5 not to have to get in the car

and drive?'”

But what seems to irk most people is that the cost of the

service fees varies from show to show, a discrepancy that Solters

attributed to individual contracts that Ticketmaster holds with

each building.

However, it is exactly those contracts that have the boys in The

String Cheese Incident barking up the legal tree.

“We’ve come to a point where Ticketmaster is not allowing us to

get tickets available to our shows,” String Cheese bassist Keith

Moseley said in “Rolling Stone.” “Our supply of tickets has

essentially dried up to the point where we can barely stay in

business.”

This ticket supply drought began in May 2002 when Ticketmaster

laid down a series of guidelines that must be met in order for a

band to receive tickets for direct-to-fan sales, according to the

band. Among those guidelines, a band must have what is referred to

as a “legitimate” fan club. In an August 2003 article in “Forbes,”

this was defined as an organization that fans had to pay at least

$15 to join.

Some bands such as the Dave Matthews Band, have what the

almighty master of tickets would consider a “legitimate” fan club.

DMB’s club, The Warehouse, had no problems getting tickets allotted

for the band’s upcoming summer tour. These tickets are sold to

members at a cheaper price than what Ticketmaster would charge.

“Typically, The Warehouse receives 50 percent of the ticket

allotment,” said Warehouse spokesperson Anne McDaniel. “The exact

percentage varies from place to place, depending on Ticketmaster’s

contract with the venue.”

In an article in the “Philadelphia Inquirer,” String Cheese made

the point of saying that their fans shouldn’t have to pay extra

dues for the honor of supporting the band.

But what really curdles the Cheese is the idea of

anti-competitive practices setting a precedent for the future. If

Ticketmaster says that $15 membership dues are required now and

everyone complies, the company can then continue to increase the

required price.

“We are not saying Ticketmaster doesn’t have a place in the

ticketing business, but we have a different philosophy of doing

business, one that caters more directly to our fans,” said Jason

Mastrine, general manager of SCI Ticketing. “Now, for the first

time in our company’s history, Ticketmaster is preventing us from

acquiring the same reasonable ticket allocations we used to get

from promoters and venues. There’s room in the mix for

everyone.”

But, according to the band’s publicist Carrie Lombardi, things

are beginning to look up for SCI.

“While I can’t say much because it is still in the legal system,

it’s safe to say that we’ve made progress,” said Lombardi, adding

that there has been no problems getting tickets allotted for the

band’s upcoming shows at the Fillmore Auditorium in Denver. “We’ve

definitely made a little headway.”

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