Ticketmaster Background (continued)
Ok? Now that said, in March of ’83 (because this conversation was the end of ’82), in March of ’83, a bunch of us come out to LA (in February or March), we signed two leases on an office – one for six months and one for five years, because nobody knew who we were. We had no idea if this would work! We put up $50,000 for the offices for six months and had the right to leave. We found an office that had a data-center of a company that went out of business on Mid-Wilshire and Koreatown, ok? I mean 3325 Wilshire Boulevard.
And we opened up and did the US Festival. And none of us knew anything – I mean, wow! If you’re from New York you don’t know anything about LA – LA is this big ~enormous~ place and you just didn’t know. And I didn’t know anybody out here – I knew two people when I came out here. And six months later we wound up having signed contracts with: Avalon, a major concert promoter; Long Beach; Hollywood Bowl; Philharmonic; and the Forum. And then we were busy. J All because of a phone call from a guy who said, “Do you want to do this?” And life is serendipity, it’s like when you see these kids on the Internet, they started “this thing” in their garage. Life is a matter of seizing moments and you never know where those moments lead. We came out here and that was really the start of the business. Because even though we were in Chicago, we were losing a lot of money. And this company – if it did not go to Los Angeles, probably would have failed.
When we started getting into business, one of the things I did as much by accident as by design in these negotiations – I said to people,
- “You have to put our logo, the Ticketmaster logo, in your ads. And you have to mention our name on radio or television – put in logo slicks [stock logos that can be used in a variety of advertising mediums].”
- And people said, “Nah, I don’t want to do that.”
- And then they said “Well look, that’s advertising, so if you want that, you have to pay for it.”
- And I said, “I am.”
- They said, “What do you mean?”
- I said, “You have a piece of every ticket I sell. It’s in your interest to put my name (or Ticketmaster’s name – not Fred’s name – but the company’s name) in your ads.”
That was unheard of in those days too. Now as a result of that, when I left, Ticketmaster’s name was probably being mentioned 15-20,000 times a day in America. Everybody’s seen their logo slicks and seen their logo in ads, and our marketing budget in those days was zero. So you got the benefit of having all of that because people don’t want a contest of where to find your outlets. People don’t want to really search to find your phone number. So by creating that, and then through repetition, the key to selling tickets is repetition.
The key to change is, people only go to the outlet once if they don’t have their tickets. So if I’m buying tickets atMusic Store A – lets take the Staples Center – and I go toMusic Store A and they go, oh we don’t have that anymore, that’s the beauty of exclusive. You find out who sells the tickets – Music Store B. You never go back toMusic Store A! Changing people’s buying patterns is really simple. Today it’s even simpler because phone numbers are easy to change; and the web is the web – you know; you can go figure it out. But in those days, I mean I remember some of the questions we would get when we were in the Midwest – they said Ticketron has an a-synchronize power supply, so there’s a power outage, their machines will still be up. And you go, “Ok, but they’ll be in a store that’s on Illinois power, so how’s that gonna help you? So while there’s no light in the rest of the store you’re gonna go buy a ticket? I mean do you hear what you’re saying?!” And they’d look at you and they couldn’t understand what you were saying, because in the end, if the machine was on and everything was dark around you.right? So what we try to do is we sort of de-bunk myths, which basically said look: tickets are sold regionally; it’s a local business; deal with the business for what it is. In changing people’s buying pattern – the key to changing people’s buying pattern is consistency, and THEN repetition. If I go to Music Plus (which was the store we used here), or ~Macomb~, what hours are the outlets? What hours is the ticket center open? It’s open store hours. So if the store’s open from 9 till 9, we sell tickets from 9 till 9. Now, the stores staffed the ticket counters – we didn’t – that was part of the deal. But if you go back to the guys before us, maybe they’d only be open from 12 till 5; maybe they wouldn’t be open on the first day of sale [tickets going on sale]. Everything came with restrictions. And what we did when we got in the business was we standardized a lot of this. The public never understood that we had done that, we just made it more consistent. And the public got into it because it was easy. I mean fundamentally, my job was to make things as easy – was to give the public every chance they could to buy a ticket. Not at a reasonab- not for free – not necessarily as low as the public wanted to pay. But we go back to the dynamic of: to provide that service and provide that convenience, it came with a cost – a fair cost. And clearly the public embraced it because you saw your numbers increase every year.
Outlets & E-commerce
What’s interesting is, I didn’t invent outlets – outlets were there prior to. Even when you had hard tickets before computers, tickets were bicycled out to outlets and there were hard tickets. So outlets were nothing new. And from what I understand today (although I don’t know if this was necessarily right): outlet sales have clearly gone down [due to the convenience of the Internet], but phone sales have declined even more dramatically. So outlets still play a portion for certain kinds of acts and family shows: for people that don’t have credit cards, for people that aren’t comfortable with the Web. But if you take theater, it’s mostly the web. If you take concerts, it’s probably some outlets and the Web. Phones have generally gone away. That’s the part that’s interesting. When at one point I think I had 11 phone rooms and 2,500 operators. I think now there are 3? I’m not even sure. But the very essence is, the Internet made that easy for people to deal with and not call. And so that’s just sort of the natural evolution of things.
I was very careful about going into that because I felt we would be the first guys to get picked on by the guys who love to create havoc on the Web. But the truth was that we had a brand name. I think the demographic of 15-40 – everybody knew Ticketmaster’s name – we were among the first to do e-commerce. I remember, a guy walks in my office (his name was Bob Parkins) and Bob Parkins walks into my office and he says, “We sold our first ticket on the Internet today!” Because we were on it [the Internet] 6 months doing information and guides and stuff, but no commerce – and then said ok we’ll turn it on and we’ll try it, and we’ll do it up in Seattle – and we sold 1 ticket. And Bob Parkins came into my office and he said, “We sold 1 ticket on the Internet.” And my initial reaction was, “Great, the Internet was invented by people who didn’t get to go to the prom and this is their revenge.” And I said, “Call up the guy and find out why he did it. [Created the Internet]” And he walks in my office and he starts laughing and he says to me – this is what the guy said: “I don’t like talking to people, and I don’t like talking to you.” And that was the conversation. And that sort of re-enforced my view of the business. Now, the first month we did $100,000 on the Web with no promotion, no advertising ($100,000 of ticket sales); second month, we did $1,000,000; the third month we did $2,000,000. Then I knew we had something. I knew we had something really amazing, but I was leaving three months later. So for me, I remember one of the early adaptations, you know, because people said, why should we pay service charges on the Web? One of the big issues was, things are free. Well tickets aren’t free; tickets aren’t discounted; Ticketmaster doesn’t own the plane. You know, what they own is the service.right? And so somebody came in and said, “Everything is free on the Web.so we should just do free on the Web.” And I said, “Fine. Then your salary for this week will be free too.”