WHAT AM I BID? Ticket auctions are a hot topic wherever the
entertainment industry gathers

WHAT AM I BID? Ticket auctions are a hot
topic wherever the entertainment industry gathers
Author: Linda Deckard & Dave
Date: July 1, 2006

MIAMI ? With the proliferation of eBay
sales-men, just about anyone can be a secondary-ticket seller these
days. How the dynamic has changed and how the rightful owner of the
ticket fits into the sales picture was a topic at the Event and
Arena Marketing Conference in Miami ?and at every other industry
gathering for the past two years. It seems the secondaries, known
as scalpers to some and ticket brokers among themselves, are
getting more vocal. Don Vaccaro, president of TicketNetwork, which
provides software for ticket exchanges, suggested the Walt Disney
Co. is using ticket brokers to pre-sell its Broadway shows,
particularly the upcoming Mary Poppins show. The move, he said,
guarantees money in the bank before the show even debuts, lessening
the risk for the producer. ?They?re making brokers guarantee money
now. If the show is great, fine, the brokers make money. If it
bombs, the producers are paid,? Vaccaro claimed. His position was
roundly assailed by the remaining panelists, who included Kim
Burgan, Ticketmaster; Robert Pearson, Tickets.com; and Peter Johns,
Xcel Energy Center, St. Paul, Minn. JT Tepolt, Ticketmaster,
moderated. In fact, in a follow up call to Disney, publicist Aaron
Myers said his group only made pre-sales available to Broadway
group-sales operators and not secondary ticket brokers. ?They?re
typically people who organize people for large Broadway tours,?
Myers said of the agents, who often help coordinate travel and
hotel accommodations for groups visiting New York or local fans of
Broadway hoping to catch several shows. ?[Group sales agents] are
very valued because they generate a lot of revenue for Broadway in
general,? he said. On March 1 ? nearly three months before Disney
offered its first presale promotion to Visa Card holders ? Disney
invited groups sales agents to the New Amsterdam theater in New
York to preview the Mary Poppins show, view slides and meet with
cast members. Myers wouldn?t release how many tickets were sold
during the group sales event, only saying the figures were
?staggering.? The practice is common on Broadway, Myers said, and
theaters and production companies usually have a ?gentlemen?s
agreement? with group sales agents barring the general resale of
theater tickets at an inflated price. Group sales agents are
allowed to charge a service-fee to customers for facilitating the
tickets, but they?re barred from scalping. ?If anyone turns around
and sells the tickets, it would throw a wrench in the whole
system,? he said. Broadway?s relationship makes defining the
secondary market a challenge. Burgan said when the ticket is sold
the first time, it is a primary market sale. The secondary market
is the resale. ?One of the reasons the secondary market exists is
we are not capturing that revenue,? she said. The primary ticket
companies of the world are trying to do that, however, with
initiatives like auctions. ?Auctions help determine the true market
value,? she said. Government still has a role in the debate. In
Minnesota, there are strict resale laws, Johns said, but that
doesn?t stop resellers from operating 35 miles to the east in
Wisconsin. ?They buy a lot of inventory,? he said. The concern to
the venue manager is determining the true market value versus what
people can afford, Johns said. It is not in the venue?s interest,
or the acts, to price out the general public. Managing how the
ticket is sold after the first buyer has purchased it is another
growing initiative for primary ticket sellers. Most ticket
companies now offer exchange programs that make it possible for the
primary buyer to unload a ticket he or she can?t use. That program
means the venue or act also ?captures the information that goes
with that resale,? Pearson pointed out. No one argued the point
that ticket prices are escalating rapidly, partly as the primary
and secondary markets fight this battle. Vaccaro said tickets on
the secondary market were going below value after the Madonna
concert ticket auctions. While that might mean the primary market
won that skirmish, capturing the money and the data, Vaccaro
cautioned it?s also a public relations problem for the act and
venue because consumers believed there were no good seats available
after the auction. ?The biggest thing about auctions is that it?s
important for the venues to be involved,? Burgan said. ?It puts the
money back where it needs to be, to people with the risk. It?s part
of the gross of the show.? ?If it happens outside of your world,
you?re missing a lot of good data,? she added. Auctions should be
timed when the show goes up or the week of the show, she said.
Sports leagues, among the first to adopt ticket exchange programs,
have polished those programs to capture the resale dollar and data.
Johns said the Minnesota Wild National Hockey League team has an
exchange program for Warming House Members, the team?s ticket
licensing service. There is a ceiling on the exchange price. ?You
can?t go above face value, but you can add a service fee.? Vaccaro
pointed to the NHL?s official collaboration with StubHub, a
secondary ticket broker, as a sign of the times. On the NHL site,
under tickets, consumers are advised sell or to buy extra tickets
at StubHub. ?The secondary market wants to share money with the
venues,? Vaccaro declared. ?The whole point is to drive consumers
to the primary market, drive them to the first sale,? Burgan said.
That?s why the solution is to offer the exchange products, so the
original buyer can come back to re-sell if it becomes necessary.
?We don?t want to train consumers to go to the secondaries. That?s
a bad habit,? she said. ?Everyone is flipping,? Johns said. It?s no
different that what is happening in real estate. But when the
bubble bursts and the false expectations come home, the venue
doesn?t want to be the villain. Vaccaro believes travel agents and
tour operators are the secondary market, they re-sell. And he notes
that most of the tickets that secondaries sell aren?t for sold-out
shows. It?s a business and it?s thriving. Fine, but it?s unclear
who is protecting the customer, Johns argued. When tickets are
priced $500-$600, ?you?ve told 90 percent of our market we only
want to see you once this year,? he said. He also advised not to
forget it is ?the box office on the front line. They are going to
face the public.?

Interviewed for this story: Don Vaccaro, (860)
870-3400; Peter Johns, (651) 265-4851; Kim Burgan, (310) 360-2433;
Rob Pearson, (888) 397-3400; Aaron Myers (212) 575 3030