Big Music's Dirty LIttle Secret

I read something interesting in the Dallas Observer this week--something that pulled the covers off something that the Big Music industry would have probably rather kept under wraps: Some of the "convenience charge" money charged by services like Ticketmaster actually goes to the promoters or the bands themselves:

One of the lesser-reported revelations of late February's Senate Judiciary Committee's hearings on the proposed merger of the two corporate behemoths of the concert business, Ticketmaster and LiveNation, came during a conversation with Ticketmaster CEO Irving Azoff about service fees.

[...]Enduring a stern grilling by Utah Republican Orrin Hatch and New York Democrat Charles Schumer, Azoff, seated next to LiveNation kingpin Michael Rapino, uttered a statement only a few outlets, including Nashville industry blog Coolfer, reported: "I would also like to get on the record that when people hear what Ticketmaster's service charge is, Ticketmaster was set up as a system where they took the heat for everybody. Ticketmaster gets a minority percentage of that service charge. In that service charge are the credit-card fees, the rebates to the buildings, rebates sometimes to artists, sometimes rebates to promoters."

This statement reveals a new truth behind the foggy nature of the fees, usually $12 to $15, and suggests that, in addition to providing the service of selling tickets, Ticketmaster also offered itself up to certain clients as a kind of protection service. Worried about being perceived as greedy to your fans and/or customers? Sign on with us, and we'll be the bad guy.

I'll admit that worked for me; I certainly considered the ticket services the bad guy on many occasions, but I've cut back on going to "big" concerts for many reasons: The price of the tickets, the price of parking, the price of concessions, the sometimes thuggish security personnel at the various venues, etc. Thankfully, most of the concerts I attend are jazz concerts in smaller venues, many of which are outside the realm of places like Ticketmaster.

But is the tide turning? It certainly is for Ticketmaster, who's decided not to be the bad guy anymore:

[I]n a mid-January conference call, Ticketmaster chairman Barry Diller for the first time in the company's history declined to take heat for the rising ticket prices (up 400 percent in the past decade): "Ticketmaster does not set prices," Diller said. "LiveNation does not set ticket prices. Artists set ticket prices."

And most people agree that those prices are too high:

"Ticket prices need to come down, like, right this instant," says one L.A. promoter, who declined to be named because of relationships with both Ticketmaster and LiveNation. "And everyone is involved who does business making a dollar off concerts—band, promoter, agent, manager, venue, ticketing company. Everyone involved has to look at it responsibly." The promoter adds that a recent survey indicated that the average American goes to a mere two concerts a year: "That's because it's a bad experience. If it was a better experience, they'd go to 15. The money experience, the parking experience, the cost-of-beer experience—it should be easier to go to shows for people who want to go to more of them. But it has spun out of control.

Again, it would be great if there weren't so many layers of crap between bands and their fans, and I've said on many occasions that if it's possible for a band to thrive without all these layers, that's all for the better. But if the bands themselves are the first link in the chain of greed, that's another problem altogether.

The author of the Observer article, Randall Roberts, does a good job of stating the dilemma:

We love supporting musicians we admire, and want them to be able to quit their day jobs so they can make us happy with music. It's just much easier to pay our money to them when we feel good about the transaction.

Well said. It will be interesting to see how this all plays out, especially with the sour economy. Maybe everyone involved will be able to turn down the Greed-O-Meter a bit and make things more enjoyable for the fans, because without the fans, your gig is known as a "rehearsal."