‘It’s called capitalism’: Former Ticketmaster CEO defends company’s business model | cbc radio

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How does it happen10:40‘It’s called capitalism’: Former Ticketmaster CEO defends company’s business model

People frustrated with Ticketmaster are just lying in the bed they made themselves, insists the former CEO of the embattled company.

Fred Rosen, a lawyer who ran the ticketing company from 1982 to 1998, has been watching US Senate hearings on Ticketmaster with frustration

US lawmakers are scrutinizing competition and consumer protection in the live entertainment industry. At the center of the hearings is the Taylor Swift pre-sale fiasco, when more than 3.5 million people registered for a Ticketmaster pre-sale for the pop star’s concert tour, and the system broke down under the pressure.

Fans and artists alike have lashed out at the company. Several US senators are calling for more regulation and oversight, accusing Ticketmaster of having a virtual monopoly.

But Rosen says that Ticketmaster is just an easy target. Here is part of his conversation with How does it happen host Nil Köksal.

Is Ticketmaster the problem? Are the fans directing their frustration in the right place?

There was [3.5 million] attempts to enter the Ticketmaster system. No system on the face of the Earth can do that.

It’s easy to blame Ticketmaster and say it’s their fault. But here is the truth. I’m pretty sure the act’s reps were told not to put all the shows up for sale at the same time. And they chose to do it anyway.

In the normal course of events, if there are enough tickets and enough events and enough times and enough nights for the act to run, you would take care of that.

So what you’re saying is that Taylor Swift’s team, or Taylor Swift herself, put too many shows on the market at once?

I wouldn’t have put all the programs up for sale when you knew the demand was going to be so excessive.

Joe Berchtold, left, the CFO of Ticketmaster’s parent company Live Nation Entertainment, and other witnesses are sworn in to testify before a Senate Judiciary Committee hearing. (Kevin Lamarque/Reuters)

The issues fans are having with Ticketmaster predate any Taylor Swift issues. Ticketmaster was ordered to pay a $4.5 million fine and $500,000 in costs incurred by the Competition Bureau here in Canada after it investigated allegedly misleading pricing claims in online ticket sales. In 2018, CBC News investigated Ticketmaster for allegedly recruiting resellers at a reseller conference. So …

You asked me to talk about Ticketmaster, not what happened after I left. I wasn’t around for any of it.

I wasn’t asking if you were directly involved. I’m just saying that fans have a history of mistrust because of those issues plus the Taylor Swift incident… You told the Los Angeles TimesSir, that you believe that the fans are, to a great extent, to blame for what is happening with the prices. So explain why you feel they are to blame.

It’s really simple. All the music was stolen. So 90 percent of an artist’s income comes from live ticket sales.

Do you know what I love? This is what I really love. I find it really fascinating. You get on the phone or you want to do these interviews, and everyone wants to try Ticketmaster. And a lot of this is written because it’s misinformation.

Ticketmaster does not set prices. Ticketmaster does not establish which shows go on sale. Ticketmaster does not determine how many tickets go on sale.

When I was in business before, it was around the same time that the Internet started. About 50 to 60 percent of an artist’s income came from recorded music. When Napster came along and… all the income for artists is gone, except for superstars, it has to go somewhere. it’s physics

There is a professor at the University of Chicago quoted in the LA Times, Eric Budish, who says, “Ticketmaster is effectively paid to be a punching bag.” But why do you think, then, that people focus on Ticketmaster and not the artists?

I [made] for Ticketmaster to take the hit for everyone, but Ticketmaster never got all the money. Don’t you understand that this is a business?

Everybody gets mad at Ticketmaster. OK, so let’s put Ticketmaster out of business, and now it’s his ticket company. Do you think they will like you more?

With all due respect, whoever does it, every venue operator knows this: It’s a thankless job. Why do you do it? Because it is economically profitable and because someone has to do it. So you do.

You said you built it that way so Ticketmaster would take the heat. But you sound very angry about it all these years later.

I’m not mad about it. I just find it absurd that people aren’t smart enough to understand that this is the game.

Is it Ticketmaster’s fault that the demand is 10 times the number of seats they have to sell?

But if Ticketmaster is helping to fuel that demand, sir, if they have people…

We do not feed anything!

In sports, if prices go up, it’s a badge of honor. At concerts prices go up, it’s the end of the world as you know it.– Fred Rosen, former CEO of Ticketmaster

Ticketmaster has the ability to remove dynamic pricing or, quote unquote, verified buyers, who, to many ticket buyers, do not appear to be verified buyers. It looks like they are scalpers who are no longer standing on a street corner, but… sitting in front of their computer and collecting a bunch of tickets that the next day will be many multiples higher than the original price the artist had set. So Ticketmaster is in control of that, right?

they don’t give artists options. You go into a store to buy a blouse. You say, “I want red instead of blue.”

That’s for the artist to decide, not Ticketmaster. You are totally wrong.

Well, I am asking you to look to find the answer.

I just gave you the answer.

The artist and the promoter determine which tickets go on sale, what the prices are, whether they use dynamic pricing or not.

People stand outside with banners calling for the break up of Ticketmaster and Live Nation.
Protesters protest against the entertainment ticket industry outside the US Capitol on Tuesday. (Drew Angerer/Getty Images)

So should we, as fans, demand from artists…not the smaller acts, but the big, big acts that they should say no to dynamic pricing and verified resale?

I would say that, in the end, the anger is misplaced. Because let me ask you this question. Who is the recipient of all the money? Follow the money. Who is the recipient? The recipient is the act.

If Ticketmaster is doing everything right, what’s the harm, do you think, in having more competition and oversight?

First of all, it is called capitalism.

Second, this is the big mistake that everyone makes. More ticket companies will not change prices. What determines the price is demand. You can have 400 ticket companies and the same number of tickets and the prices wouldn’t change.

Do you get frustrated when you try to buy tickets?

I don’t go to many events. I didn’t go to many events when I was running Ticketmaster.

Maybe if you tested the experience from a user point of view, you could have made some changes?

I have to tell you something. And, I mean, you’re a very nice woman. because people [have] I have to grow. People have to recognize that it is a business.

The truth is, and this is something that nobody wants to deal with, is that nobody pays more than they want for a ticket, because you don’t have to go. and it is not the nobility obliges. The fact of the matter is that it is entertainment.

When the Philadelphia Phillies were in [the World Series] …the people of Philadelphia were proud of the fact that all Phillies game tickets cost more than $1,000 a ticket.

In sports, if prices go up, it’s a badge of honor. At concerts, prices go up, it’s the end of the world as you know it, and the ticket company stands accused of everything but kidnapping the Lindbergh baby.

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