Golden Circle (continued)

See that act at $150. Maybe at $60 or $50 they would. And the problem is not every act can draw that kind of money. So you know, that’s a different set of issues, but that was the beginning. That was when people started to think of this as, maybe it’s a business. Maybe it’s something we have to look at.

It used to be you made the record and toured to support the record, right? Now, you know, I think Madonna’s tour was $190 million dollars – or the Stones – or somewhere in that level. Now you tour to make money, because pricing caught up to value and the albums don’t sell on the same level. It’s a different dynamic. Then came merchandise and then came ancillary rights (none of which has anything to do with ticketing, but it really was the progression). When I got in the business, people were genuinely concerned about being able to sell tickets orderly, have accurate accounting, not have duplicates, and have a real straight up business. And as we dealt with all those concerns (rapid speed of selling), you sell a show out quickly, you can roll and do another show. And when you could do three or four or five stadium shows in a day (which was unheard of when I got in the business in the 80s, because we just couldn’t physically get it done), the more the technology allowed you to do that. The more people started to take it for granted. Near the end, people assumed we had no technology because it all looked effortless. The line was, all you did was print the ticket, but people don’t understand the issue of thru-put and they don’t understand the issue of orderly distribution.

The first big event we did was White Sox – this is a true story – was a White Sox game, and I remember I went to opening day of the White Sox in 1983 and I had a dream the night before, that everybody was in the same seat and the system didn’t work – because I was never technical and I never learned the system. I understood the economics of the business (or I thought I did), and it was a lot of fun. You have to understand it was a lot of fun because you were changing rules and you were meeting needs. And from a manager’s point of view and a band’s point of view, if they could sell three shows instead of two, that was good for them, right? And if you could do it orderly and not have counterfeits, and not have duplicates, you could really make a better business, and it ultimately helped everybody.

Orderly Distribution & Thru-Put

Distribution is you’d have – for some shows you’d have 100 operators, and you’d have 100 outlets (75 outlets in a big region), and thru-put was how fast you could print a ticket and do a transaction. So we could do 2,000 tickets a minute and when you’re talking about – maybe in an 18,000 seat building depending on the configuration – in those days you’d probably sell 90 percent of the house. Not taking into account: band holds; sponsor holds; advertising holds; VIP holds; all those. If you could sell it out in less than ½ an hour, that was unheard of. And so gee, we’re out in a ½ an hour, when do we roll? And it had an impact because what creating these systems did, facilitated concert buyers to get the tickets more rapidly – which led to more shows.

Rolling over in other wards – because you sold out so quickly – maybe you do a third show in a market instead of a second. When tours went on sale (going back 20 years), they’d go, well, we’re gonna do one date here, and maybe two dates here.but we don’t know. And then maybe three dates here.but we don’t know. Because as they’d lay it out, they’d leave room to move it from city to another, and so if you sold out a show quickly, and rolled in to a second, then they knew they had two dates, and then a lot of these shows would go on sale the same day. So you’d have a grid basically, where you knew what was going on all over America. And you were in touch with the managers, agents, and the buildings, and they would tell you whether to roll (in other wards, go into the next show). The managers, agents, and buildings made those decisions. We didn’t; we just gave them the information to make the decisions.

One of the things that’s of great confusion, was that Ticketmaster’s not involved in pricing the face value of tickets; not involved in determining whether shows – more than one or two shows – go in a marketplace. The representatives of the band and the building, or the venue, make those decisions. We gave them the information so that they had access. You go, well, let’s see -first show I’ve sold out all the tickets except maybe some singles, and maybe 500 seats in the rafters. Well you know from the business you’re going to sell those out because the closer you get to the date people just buy them – you know, because they want to be part of the experience. So maybe you roll into a second show, and then maybe you cleaned up everything (but maybe some singles, and maybe a thousand tickets in the second show).

You can see the demand on the phones because remember, the reason people got busy signals – this is truly funny – the reason people got busy signals is you had 100 operators and hundreds of thousands of attempts. So the dynamic was, of course everybody couldn’t get through – it was a pipe. It was an orderly pipe. And if you had 100 operators or even 200 operators. people learned about speed dialing and rotary phones – because rotary phones were disappearing. And so you sit there, and you keep hammering it, and then if you got through, you could order 6 or 8 tickets [the limit].

Now what’s interesting is that today, online for concerts, people will spend sometimes (and especially for theater), more time searching for good seats than they would on the phone. If they were on the phone for 10 or 15 minutes they would complain. But if they’re sitting at their computer for ½ hour, it’s their time, so they can pick the show they want to go see and they feel they’re more in control of their own destiny, as opposed to a third party. So all of that was going on in the 80s and basically up until the mid 90s.

It was different because managers never got the tools. The agents never knew, How many tickets have we sold? Where are they? What’s left? How do you figure it out? Where are you selling? Even in the basis that you could pull an outlet report online – you’d say, now where is my strength coming from? It’s not coming from – if the show’s in Indiana, it’s not coming from Los Angeles, we know that. Which are the strongest outlets? Then you could look at that, and are there lines? So you’d call the outlets and you’d speak to people in the outlets and say, Do you have lines? [Enough phone lines to handle the demand]. We’ve added a first show and still have 100 people [operators.]You’d call and you’d have polling and you’d be figuring that out. And so, I don’t think anybody understood what we did – but I didn’t think anybody needed to understand what we did. I think when I say that, the public didn’t understand what was going on. I think the managers and agents got to use it and I think it was helpful to them. You know, they would have loved it if we had the system for free, but that wasn’t the case.

The Markup

What happened was, we had a policy called cash only at the outlet center. You could use a credit card on the phones. And in those days, there were different service charges (outlets were less than phones, which I understand has changed). My thinking at that time was that: if you go to an outlet, you’re making an overt effort to go somewhere, so while it’s a convenience, it’s still different. The ultimate form of convenience is not leaving your house, and calling on the phone. What would happen is – and the reason it was cash only at the outlets, was not because of any great technology issue, it’s that no band would pay the credit card. So the very essence of what happened was: we felt as a ticket company, you’re a guest in the department store; you’re a guest in the music store. They don’t want to spend all day with 200 people in line. They want to get ’em in, and get ’em out, and get the tickets sold. So, everybody could access cash. ATM’s are near every store and people knew that. That wasn’t an issue and basically what happened over the years is that the inside charge went from – put it this way – it went from significant to minimal. And the outside charge went from minimal to significant, lol. In a lot of these cases, even today when people go, well Ticketmaster’s not reasonable -they’re not cutting there – I’m trying to lower the price of the tickets – but Ticketmaster’s not being reasonable. It’s sort of disingenuous because Ticketmaster’s cut is always the same. It’s 15 – 20 percent of the face value of the ticket up to a certain price. It’s not 15 – 20 percent of $100.