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I currently run a online ticketing startup (Voost) for another side industry, athletic events (think bike/running/triathlete races), but I've also owned a fairly large night club in San Francisco. I've had the fortune of seeing a few sides of this industry now.

You have a great explanation. I think the key point is getting venues to agree to switch to something else because Ticketmaster/ClearChannel truly owns the market. Heck, they own most of the venues too. One time, I ended up losing a ton of money on a Bone Thugs & Harmony show because a ClearChannel radio station advertised 'accidentally' that we were sold out and tickets wouldn't be available at the door. Nobody showed up. The games they can play are amazingly creative.

This time around for Voost, we are trying to buck the trend with ticket sales. We force the promoters to always absorb the ticket fees themselves. The athletes love it because it is one simple price and we've done our best to keep our fees at a minimum. We'll see how it works out in the long run for us, but so far it's been good.

Sure, you can make the tickets $1 and charge a $50 fee (which gets kicked back), but eventually people are going to catch on and start complaining.

For venue ticketing, I honestly can't fathom someone in a startup really upsetting the industry without playing the same games as ticket master.

> a ClearChannel radio station advertised 'accidentally' that we were sold out and tickets wouldn't be available at the door. Nobody showed up.

Didn't you sue them? I hear all the time that US is a country dominates by its lawyers, and that you can sue you physician if he didn't forecast your cancer ten years in advance. Here you seem to have a legitimate case, and would win some money they would find a less disgusting way to fight next time. Or maybe, or surely I'm wrong and laws don't protect people and businesses in US the same way they do in Europe.

I mostly depends on how much resources you can provide to your legal team verses what your opponent can. The vast majority of the time, it boils down to who has more money. The exceptions are usually due to public agencies or organizations with a “dog in the fight” that would benefit in the long term if the underdog wins.

ClearChannel/Ticketmaster is huge and it would probably take the backing of a corporation the size of Time Warner or Apple to challenge them. Issues like this aren’t usually “sexy” enough for PR focused firms like the ACLU or FSF or whatever would be apropos here to get involved with, at least initially.

No, of course I didn't sue them and they knew I wasn't going to sue. It isn't like there is even a phone number or person that you can call to complain. And really, what would I sue for exactly? How could I prove they did that on purpose?

I'm also not JWZ (even though my club was on the same street as his). I didn't have endless gobs of Netscape money to sink into dealing with stuff like that... and that is a big reason why my business died. This is just one story of many issues we faced.

Lesson learned: never open a night club despite how good your intentions are.

> How could I prove they did that on purpose?

You shouldn't need to.

If their mistake did cause harm to your business, they should pay for it. Having more or less money than the other part should have zero correlation with the result of a justice judgement, because having more or less money do not change the facts that have happened and should be judged.

At least that's how we conceive justice in France (eg "dommages et intérêts"), but after reading the US-DE comparison [1] I understand I am probably wrong.

- [1] http://math-www.uni-paderborn.de/~axel/us-d.html

This is a great explanation (greetings from a former founder of Stubtopia - I met some SeatGeek guys at TicketNetwork tradeshows, but can't be sure if it was you).

By my estimation the next big chance for a software company to go after ticketmaster would be in 2015 - a lot of major venues expire, but it would be extremely difficult. You'd have to have an entire ticketing platform already built, which to build one as robust as ticketmaster would be extremely expensive, but then there's no guarantee venues will sign with you.

Venues generally have no incentive to work with anyone other than TicketMaster, especially since the LiveNation merger. Basically all you have to do if you're a venue is plug into the TicketMaster platform and everything else is taken care of - from the ticketing to the promoting and the entire point of sale mess online.

Reality is as a consumer you will keep taking it in the shorts for some time - TicketMaster is a 1000 pound gorilla that will be very difficult to knock off. I've talked with dozens of would-be TicketMaster competitors over the years, and they all end up going after different markets where they can get more bang for their buck. But even in smaller/different markets you have the likes of Paceolan.

which to build one as robust as ticketmaster would be extremely expensive

Could you say more about this? Out of ignorance, I'm doing the classic nerd "how hard could it be" thing:

http://xkcd.com/793/

Ticketing is hard. It's like a lot of business solutions where a custom logic language is essentially baked in to describe price points, discounts, and more.

For example, Tixato (my current favorite free ticketing platform) tries to use "price groups". For each event, you set up a series of price groups that make a base price and discounts based on it. You can then assign specific price groups to each night. So for a $15 show with a $5 or maybe a 20% student discount, you just write it as such. But what if you want to offer a 2-for-1? Make a 50% price point, right? But what stops people from buying just one ticket at that point? Now you need to handle that case. And they just get crazier and crazier.

Plus, ticketing takes a heavy load. The I Heart Radio festival this year sold out in 8 minutes. The room has a capacity of 16,800. The festival is two days long. Let's assume only 28,000 were put on sale (the rest were for giveaways, house seats, artists, and artist comps), that's still 3,500 transactions per minute of $423 each (plus fees). You don't want that to screw up.

  Plus, ticketing takes a heavy load. The I Heart Radio 
  festival this year sold out in 8 minutes.

Isn't this a textbook application for EC2, Heroku, Google App Engine, Windows Azure etc?

Maybe, but that shit isn't easy.

In this particular case, auto-scaling would be too slow, so you'd have to do something more clever. And ticketing obviously has strong consistency issues, so that removes another set of optimizations.

And of course, you'd still have to do all the load testing to make sure your chosen back end really performed correctly, which is a large fraction of the scaling work.

Fab. That's helpful. And getting all of that detail right strikes me as the kind of thing that is best approached through incremental growth, so that you can polish cases in collaboration with clients. Which, as you said, this market is not well suited for.

Former TM employee here. Some thoughts:

"Given that LiveNation is the by far the biggest promoter in the US, it would be an enormous risk for a venue to forsake Ticketmaster and go with an alternative."

This is far from inconceivable. The issue is a combination of technical & financial.

First, can a ticketing system support a massive onsale? Ticketmaster has proven they can, time & time again. A lot of geeks thinks it's not a hard problem.

LiveNation apparently thought that too & went their separate way. They threw $100M at the problem & continually crashed for major onsale events. Eventually they threw in the towel & merged with TM.

So if you're a promoter, why take the risk?

As for financial, that brings us to the next point.

"Venues/Artists Need To Ditch The Big Guys"

You missed the biggest reason this won't happen: Venues & artists are the ones responsible for the fees. Those fees are largely dictated by venues, promoters, artists & the rest in the supply chain.

Honestly, when I hear this, it's a bit like someone telling Tony Soprano he needs to ditch his hitmen because they're violent.

> There's no question that ticketing needs reformation. But this is an industry (like payment processing) where considering change from a detached, naive perspective is fruitless. It's important to understand the intricacies before avenues for upheaval can be found.

Are the problems with ticketing things that the big companies (eg: ticketmaster) don't want to change because of revenue concerns -- but will eventually be forced to as new companies arrive -- or things that are so ingrained in the industry that they can't be changed without significant work from everyone involved?

(irrelevant side note, I realised I'm wearing a seatgeek t-shirt as I type this)

"The promoter does this so that they can advertise low face values (appearing fan-friendly) while maintaining margins."

I don't understand how this is legal. I'm pretty sure my local grocery store wouldn't be allowed to advertise tomatoes at $1/pound but then tack on fees so I end up paying $2/pound.

They have a way of getting around this protest: if you travel to the venue box office and buy tickets in person, you'll get tickets at face value. So it's possible to get tickets at face, but it's no secret that a substantial majority of buyers prefer to endure the "convenience charge" associated with buying online.

That's interesting, but brings up two more points:

First, which price do they state up front when you buy online? If it's the base price, then it's still wrong. My grocery store wouldn't be able to get away with advertising $1/pound at the location where I shop, charging me $2/pound, and saying that they do offer $1/pound as long as I travel to one of their other stores that offers it.

Second, why do people complain about TicketMaster so much if it's this easy to bypass? Is there some kind of hidden catch, or do all of these people hate these hidden fees enough to blog about them but not enough to go buy the tickets in person?

In many ( most) cases it's impractical for people to buy tickets at the venue. Even leaving out situations where tickets sell out quickly the costs associated with going to a downtown box office tend to exceed the fees annoying as they are--and even in person there tend to be various facility fees and the like.

It can't be fees for buying in person, since I'm being told that buying in person with no fees is how they can get away with advertising a the base price. As for the inconvenience of buying in person, that really doesn't seem to add up, but I suppose people really could prefer to spend an extra $60 over going to the venue in person to buy.

What's interesting is that airlines work in the opposite direction: free if you buy online, fee if you buy at the ticket counter.

That makes more sense to me, since computers can handle a lot more orders per employee cost.

There's at least some competition. I'm in Raleigh, and to get to, say, Chicago, I've got multiple airline options (some direct, some 1 or 2 stops, etc). If I want to see The Who in Greensboro, there's only one game in town.

In some ways, the airline industry is one of the most purely competitive industries we see. Most airline customers care about price above all other things. A $5 difference in price can make the difference between a person choosing airline A or airline B. While a company like TicketMaster will tack on convenience fees any time they think they can make an extra buck, the airlines are actively trying to avoid applying extra fees to their typical customer, because that typical customer will jump ship to another airline in an instant if they think they can get a better deal there.

In short, TicketMaster is charging "convenience fees" purely because they can, while airlines charge you for buying a ticket from a real person because competition makes them charge for what actually costs them money.