Sundays headline is now - PSA: Ticketmaster Customers, Double-Check Your Email

PSA: Ticketmaster Customers, Double-Check Your Email

From the “you may have missed this in real time” department:

If you are an online Ticketmaster customer, you may be eligible for a $1.50 per purchase discount on tickets purchased from 2012-2016. No joy, it seems, for those who buy tickets from November 2011 until the settlement is finalized and discounts distributed by email (not before May 2012).

The announcement subject line is “Notice of Proposed Settlement of Class Action;” the sending email, ticketfeelitigation@tgcginc.com. You not only need to check your spam folder; you need to think about old email addresses. How many people have kept the same email address on their Ticketmaster account for 12 years? I haven’t.

The Back Story

Ticketmaster is the giant company that ticket buyers love to hate. One reason for this: we aren’t really Ticketmaster’s customers. Their real customers are venues and promoters (and sometimes those are one-in-the-same, see LiveNation, now merged with … Ticketmaster) because these are the businesses that contract with Ticketmaster for services.

Another reason we hate Ticketmaster: we think that all of those fees go into Ticketmaster’s pockets. That is probably not the case. Read on, remembering that there is more than one fee tacked on to the price of your concert or play or sporting event tickets.

In 2010, an eight-year-old court case challenging Ticketmaster’s service fees as excessive was expanded from the two original plaintiffs (ticket buyers) to a national class action suit. In late November, the proposed settlement was announced; the final settlement hearing is in May 2012. The class includes approximately 56 million Americans who on average have purchased three tickets from Ticketmaster online since 1999.

For each ticket purchased online from October 21, 1999 to October 19, 2011, a Ticketmaster customer will receive a $1.50 credit to be used on future purchases. The credits must be used within 48 months after they are distributed. And they will be distributed to you via the email that you have associated with your Ticketmaster account. The settlement website has a form you can use to register old email addresses.

If a typical customer bought three tickets in 12 years, it seems pretty unlikely that said person will buy three more in four years. Fortunately, the discounts may be combined into pairs (a $3.00 discount per purchase). An as yet unnamed charity will get any unclaimed balance, up to $45 million, in the form of cash and free tickets.

If you are an above-average Ticketmaster customer (like this household), you may not be properly compensated for Ticketmaster’s price gouging. Each customer is limited to a total of 17 coupon-like discounts to be used over a four-year period.

How Much Does Ticketmaster Charge In Fees?

I thought I’d review my account, as I have been using Ticketmaster’s online services as long as they’ve existed. Here’s what greeted me when I logged in:

After 15 days from the event date, receipt and order details for your transaction are no longer available online.

WTH? I can go to Amazon and find the full details of every order I’ve ever made with them! You know why? Because Amazon has competitors but Ticketmaster is a legacy company, with an antiquated backend, but it has virtually no competition and lucrative long-term contacts with major venues. Well, and you and I are Amazon’s true customer; that significantly changes the customer service picture.
When I searched my gmail archives for Ticketmaster emails, I discovered that Ticketmaster emails include no order details â€" only a link â€" for anything purchased after June 2007. But until June 2007, Ticketmaster included a PDF of your tickets with your email order confirmation.

I paid $3.50 plus $1.00 per ticket in a handling fees for a lecture series (four tickets, one transaction). That’s $4.50 in fees â€" 20.7% â€" for a ticket costing $29.75.

And then there’s this 2006 Heart concert at the Paramount Theatre. Ticket: $37.00. Fees: $11.20 â€" a 30.3% surcharge.

I have PDFs of my receipts for 2011 summer concerts. Here’s Jeff Bridges: a 33% surcharge for an outdoor concert at Chateau Ste Michelle Winery in Woodinville, WA; that does not include the $2.50 per ticket print-on-demand fee:

These examples demonstrate why concert goers HATE Ticketmaster with a purple passion. And it’s why a $1.50 discount on future ticket fees is laughable.

But the law suit did not take aim at the entire fee structure, just the “order processing fees”:

The best case scenario for this case was that customers would get back all they money they overpaid in “order processing” fees, which averaged $4 each (the case doesn’t involve the much more expensive “convenience fees” Ticketmaster also tacks on).

What’s always been mind-blowing to me is that Ticketmaster charges us a processing fee to deliver the tickets via email …. but nothing to deliver the tickets by postal mail!

Think about this for a minute.

You and I both know that it costs Ticketmaster real money to print tickets, stuff envelopes and then pay the U.S. Post Office to deliver our tickets. Then there are the replacement tickets that the venue has to provide because either we didn’t receive or received and misplaced (or thought the envelope was junk mail and tossed it in the recycle bin) the tickets.

The airlines “get” it and not a single one of them charges us to get our tickets online, print them and bring them to the airport. Hell, they sometimes give us a discount if we do this work in advance! I don’t believe their market behavior is overly influenced by competition, but it’s possible, especially since that oligopolistic market has a lot more competition than ticketing services. It also has more regulation.

What About The Competition?

What competition might be the better sub-head. In 2000, Ticketmaster bought the indie ticketing company, TicketWeb. I checked the fees for a Seattle venue, the Tractor Tavern: 35% mark-up:

Other “competitors” that Ticketmaster now owns: MusicToday, TicketWeb, Ticketron and TicketsNow (a peer-to-peer, or secondary, marketplace). In 2009, Ticketmaster reached a settlement with the state of New Jersey over its redirecting customers to TicketsNow even though tickets were still available at face value on Ticketmaster.com.

It will also end a previous advertising arrangement in which customers Googling for Ticketmaster were automatically sent to the TicketsNow web site.

Ticketmaster is the primary ticket seller for  the NBA and sells tickets for 14 of 30 MLB teams.

Here’s one political tie-in:
There’s the niggling fact that Ticketmaster owns venues. This is a form of vertical integration that the courts axed back in anti-trust days, when Boeing lost its airline and Hollywood producers lost ownership of the movie theatres. But the Obama Administration OKed Ticketmaster’s acquisition of LiveNation, which is the largest venue owner in the county.

Even though Ticketmaster owns venues, the $1.50 discount cannot be used at events sponsored by Live Nation.

In order to merge with LiveNation (LYV), Ticketmaster had to divest itself of Paciolan, which is now 100% owned by Comcast. According to its data, it is the number two ticket seller in the U.S.

• 192 million tickets â€" Ticketmaster in 2007 + Live Nation in 2008
• 124 million tickets â€" Paciolan data coupled with New Era Tickets and TicketsWest
• 42 million tickets â€" Tickets.com in 2009

Based on the DOJ requirements detailed in the merger, AEG Live was LiveNation’s leading competition. It’s a promoter that also owns venues and sells tickets to its events.

StubHub, an eBay company, is a fan-to-fan (secondary) sales venue, so it doesn’t count as a competitor to Ticketmaster although it is a competitor to TicketsNow.

What Do Competing Ticket Companies Charge?

When I checked prices for an AEG event scheduled at Seattle’s Key Arena in February 2012, I discovered that the service fee ranges from 15-30%, with the lower priced tickets taking the brunt of the convenience charges:

I checked prices for the Harlem Globetrotters, who are coming to Everett WA (Comcast Arena, Paciolan ticketing) in February 2012. Fees total 23.3%. That also feels exorbitant. But for a less expensive ticket, the fees jump to 31%!

Distant number three Tickets.com is “a privately held subsidiary of MLB Advanced Media, LP, the interactive media and Internet division of Major League Baseball.”

Here’s an example of ticket charges for a performance at the Paramount: 26% in handling fees plus an order processing fee (per order) of 3.5% of the face value of the tickets. Note that $7.50 of the $24.50 in “convenience fees” goes to the Paramount Theatre:

A small venue ticketing company, ShowClix, does not charge for ticket delivered by email and offers mobile phone delivery on some tickets. On this order for circus tickets in Lansing Michigan, the service fees total 16.9%, which is a significantly less than the top three ticketing companies:

How Should Fees Be Structured?

I’ve always bridled at having to pay a per-ticket fee rather than a per transaction fee. What’s not been clear to me is how this market works. We need to understand that Ticketmaster exists because of a distributed duopoly structure: the venue and the ticketing agency.

A long long time ago, Ticketmaster decimated then market leader Ticketron by “increasing service fees and splitting the money with whoever housed a concert or sporting event.”

There are real reasons that venues don’t want to invest in a computer system that won’t crash when thousands of fans log on the instant the star du jour concert tickets go on sale. That’s probably why the handful of alternative ticketing systems are focused on small venues. (And why MLB decided to roll its own.)

I think any fees should be

1. Per transaction, not per ticket;
2. Clearly marked on the ticket, showing how much of the fee goes to the ticketing company and how much to the venue. This information would enable customers to put pressure on both entities, because public opinion is the only pressure available to us when faced with a monopoly market. And it is a monopoly for any given event: there is only one event per city per tour; there is usually only one online ticketing option per venue; and now Ticketmaster also owns venues.

Text of Settlement Email

:: cross-posted from wiredpen :: Follow me on Twitter!