Ticket Fees & The Robin Hood Pact
Fee Free Friday says "En garde!" to another week's worth of high ticketing fees. News just broke that a court has ordered Ticketmaster to pay $23 million to atone for its maligned "rewards program." The BBC reports on "legalised touting" in the UK. And will the Robin Hood Pact put an arrow through the heart of ticket fees once and for all? All that and a special "imitation is the sincerest form of flattery" edition of the Wall of Woe!
Bogus Rewards Program
Webster’s dictionary defines the word misnomer as an "inappropriate designation."
That’s the first thing that comes to mind after reading the rash of reports of a court ruling in Los Angeles. Industry giant Ticketmaster has agreed to settle a long standing lawsuit that stems from its so-called “rewards program” which purportedly ended up costing participants more money than it saved (thanks to ticket fees).
According to the Huffington Post, U.S. District Judge Dale Fischer approved the settlement:
About 1.12 million people are eligible to file a claim. They signed up for the rewards program after buying a ticket at Ticketmaster.com between September 2004 and June 2009. The plaintiffs argued that they didn't know about the fees, which were charged to the credit or debit card used to buy the ticket.
In a much less objective (but far more entertaining) account of the dramatic turn of events, Paul Resnikoff published ‘Ticketmaster Fined $23 Million for Creating a Bogus Rewards Program’.
Ticketmaster is one of the most hated brands in the America, and frankly, they don't give a f***. But is there a hangover to all this bad behavior?...Ticketmaster faces a $23 million fine for hoodwinking customers into an expensive 'rewards program,' one that featured few perks and lots of hidden costs.
Resnikoff goes on to “do the math” and notes that the settlement calls for Ticketmaster to pay each eligible consumer $30 each. But according to Resnikoff the “rewards” program ultimately generated $85 million for Ticketmaster, or $75.89 per consumer.
The case shows the insidious nature of exorbitant per-tickets fees. Even with a so-called reward program in place, fees still end-up hurting consumers and potentially the venue as well (assuming it cannot afford court mandated refunds).
Continuing with the week's Old English theme, BBC business news reporter Bill Wilson is asking if what we call "scalping" here in America is actually a good thing.
Wilson published an in-depth look at the practice of re-selling tickets and the resulting face value mark-up (which is technically a ticket fee). In 'Secondary ticketing: Inflating sport prices or useful service?' Looks like the average UK sports or music fan is coming to the same harsh realization that their stateside counterparts have known for some time:
Over the past decade a new phenomenon has arrived on the UK's shores - the "secondary ticketing" exchanges that allow individuals, sports clubs, and other organisations to legally sell spare tickets - often, but not necessarily, at more than face value.
Wilson quotes Malcolm Clarke, an executive with the Football Supporters Federation, as acknowledging there have been horror stories concerning legalised touting (aka "scalping") and suggests that sports franchises should be allowed to re-sell their own tickets to address the issue.
Mr. Clarke's suggestion is similar to a highly unpopular one here in America. The Los Angeles Angels baseball team is facing a firestorm of bad press for acting as the secondary re-seller for its own game tickets.
The Los Angeles Angels of Anaheim want to dictate what fans can do with their tickets after purchase. Under their terms and conditions, fans can’t resell their tickets unless they get permission from the team or sell it through the Angels’ own Ticket Exchange.
Be it by a major sport franchise, or a shady character on the street corner, the face value mark-up on tickets (which can be as much as 2,000%) isn't the only consumer-hostile result of unauthorized resale. Scalping causes the venues to bear the brunt of the bad publicity, even when they are not directly at fault. Incensed, the consumer reads the face value price and compares it to what they were forced to pay an unauthorized re-seller. While that angry buyer is reading her ticket, is that a good time to have "Ticket fee: $12.00" printed right next to your venue name?
Ticket Fees & The Robin Hood Pact
The legend of Robin Hood tells the story of injustice, the plight of a downtrodden peoples and their ultimate vindication. Robin Hood robbing the rich and giving to the poor is a frequently used allegory that can be made to serve any number of political purposes.
The latest example is by Bob Lefsetz when he wrote of Kid Rock’s now infamous deal struck to reduce ticket fees for his upcoming concert tour.
Lefsetz describes the deal as a Robin Hood Pact with promoter Live Nation and states that the overwhelming response has had a major impact on ticket sales:
Kid Rock then wanted no ticket fees at all. So a deal was struck. If you went to Wal-Mart, where they’ve got Live Nation kiosks, you could buy a ticket for $20, including parking, with no fee. Ticketmaster picked up the vig, furthermore, more kiosks were installed to handle the demand.
So what happened?
Across the board, sales doubled or tripled from 2011. Blowing past everybody’s expectations.
He may have not technically “robbed from the rich” but by lowering ticket fees to a reasonable sum, the fan response to Kid Rock is the same as the people of Sherwood Forest response to Robin Hood.
Fairy tales aside, venue owners should take careful note of the ticket sales success story Kid Rock's Robin Hood Pact tells. Particularly in the context of sales velocity, which was greatly accelerated by the lowering of ticket fees. A faster sell out means all that revenue arrives faster, providing much needed liquidity for other costs (or to be placed directly in your pocket!).
Wall of Woe - Imitation is the sincerest form of flattery Edition
In an obvious retort to Fee Free Friday, ticket industry giant Ticketmaster began a new promotional campaign called... *drum roll* ...Free Money Monday! As seen on Tickemaster's Facebook Page, the promotion appears to be a kind of rewards program... Um, wait. What? (see above).
It is actually very flattering that the world's largest ticketing company has taken notice and co-opted Fee Free Friday's day-of-the-week rhyming. But "Free Money Monday" doesn't seem to be making any of the following people any happier...
That last tweet by Rod Martin is more than just frustration. It is proof that high ticket fees are the reason for lost sales. Does your current ticketing software charge you (and your customers) per-ticket fees? Yes? Then now is the time to switch.
ThunderTix does not charge you per ticket fees for selling tickets online or at the box office. We encourage you to pass along that savings to the consumer and show them the long term vision of your business is tied directly to their satisfaction. Your patrons will love that you don’t add fees. It’s that simple. Lower ticket costs through no added fees translate into higher sales and greater patron satisfaction.
And should you choose to add a reasonable per-ticket fee, you retain 100% of the revenue generated. For example, if your venue sells 5,000 tickets with a nominal one dollar per ticket fee, you earn an additional $5,000.00 after you switch to ThunderTix.