SXSW Dispatch #6: The Ticket Master speaks, and debating ethics in the blogosphere

AUSTIN, Texas Truer words have never been spoken at a SXSW panel than when Wall Street Journal reporter Ethan Smith introduced Ticketmaster CEO and president Sean Moriarty on Friday afternoon as the head of a company that more than any other makes music fans blood boil.

Moriarty sat down for this rare public session at a time when his company the dominant (some would say monopolistic) force in concert ticking for the last 32 years is on the ropes, as Live Nation, the dominant (some would say monopolistic) force in concert promotion, ends its relationship with Ticketmaster and not only directly begins selling tickets to its own events, but to those of other promoters seeking an alternative to Ticketmaster. (Live Nation is 15 percent of Ticketmaster’s business, Moriarty said.)

Even as Moriarty claimed that Ticketmaster is trying to enter a new era of transparency in its business practices, the embattled executive dodged direct questions such as Why do Ticketmaster service fees cost so much? by hiding behind an obfuscatory cloud of friendly but Orwellian corporate doublespeak.

Ticketmaster is one of the most misunderstood well-known companies out there, Moriarty said.

I think any service business that charges a fee for services faces challenges. If you look at service fees for cable companies, for example, or banks ATM networks, people on one hand are pretty quick to criticize the price, but if you ask them if theyd like to live in a world without the access that they have to cable television or a world where they arent able to walk up to any ATM and take money out, theyd probably say no. Our service is actually much more complex than people know.

Fair enough: In the new millennium, it really is pretty amazing that we can log on and purchase tickets to an event anywhere in the world in a matter of a minute or two, printing those tickets out on our own computer (for an added delivery charge, of course). But that has never been the issue. At the center of consumers rampant dissatisfaction with Ticketmaster fees, which can add a third or more of the face price to each ticket purchased during one transaction, is the question of how much it really costs the company to provide that service, and the pie chart of how those fees are divided between the promoter, the artist, the venue and Ticketmaster.

Smith suggested that part of what Ticketmaster does is to act as the bad cop or lightning rod, absorbing customer anger at steep fees while sheltering the promoters and artists, who get to make extra money thanks to rebates (some would say kickbacks) of extra cash from the service fee. (In other words, the promoters and artists get to look like the good guys by charging one price on the face of the ticket while pocketing extra cash by also collecting a share of the service fee.)

Moriarty: I would say that in a world where the brand and your experience in the business is everything, being a lightning rod is not a good service business to be in, because ultimately youve got to provide people with a safe and secure and comfortable experience. To the extent that were being used as a lightning rod, it comes to the detriment of our brand. That may have been true historically, but as we see the business today, that is not the right way to position the business in any way, shape or form.

Nevertheless, Ticketmasters master declined to explain to Smith, just as he declined to explain when listeners including this reporter later questioned him, exactly how that dreaded service fee is broken down. Ive been asking that question of a long line of Ticketmaster executives and public relations executives for 14 years now, and Ive never gotten a clear answer.

I dont think its appropriate in a world where weve got 9,000 clients, Jim, to actually disclose the particulars of any individual client deal, and summarizing or making a sweeping statement is probably not something thats appropriate, either, Moriarty said. You choose to bring it up as fodder for the same conversation over and over, [but that] doesnt really get you very far. Its easy to be redundant and its easy to talk constantly about rising prices, but it actually takes a little more work to understand the situation in full context.

Gee, and here I thought that was what I was trying to do. So much for transparency.

Pressed by Smith on Ticketmasters plans to compete with major forces in the burgeoning market of secondary resellers (some would say scalpers) through its recent acquisition of Ticketsnow.com, Moriarty stressed that Ticketmaster is a safe, secure and legal name that ticket buyers can trust, as opposed to the unknown entities selling tickets on sites such as eBay, Craigs List and Stub Hub.

When people go to buy a ticket online, they should have confidence that theyre going to get exactly what theyre paying for, Moriarty said. They should have some understanding of the value of the ticket as opposed to just the posted price, and they should know if theyre actually buying tickets or selling tickets in a jurisdiction that actually has laws on the books [prohibiting that], although all but a handful of states still do that, since resale laws have been altered to accept the realities of the digital age.

Smith asked Moriarty about charges that Ticketmaster has been furiously lobbying many states to change the laws so that only the original seller of the ticket in many cases Ticketmaster can conduct the auctions for reselling tickets.

Our focus has been on a level playing field, and we actually believe the market should be an open market, Moriarty said, expressing an admirable sentiment while dodging Smiths question about lobbying. But Moriarty did say that Ticketmaster includes its clients in revenue-sharing of the income from reselling tickets providing those rebates (some would say kickbacks) on service fees from secondary sales the same way it does from primary sales.

Resale is a $3 to $4 billion market on top of original ticket sales, Moriarty said, and he made clear that Ticketmaster hopes to dominate that market and forge ahead to a world where there are no set prices for tickets, with value fluctuating based on demand. Ultimately, theres an inevitability to any market, which is to say, youve got to let buyers and sellers trade freely in a way thats unencumbered in a way to really maximize the market, and I think thats where were going.

Navel-gazing with the navel gazers

The other noteworthy panel Friday, a session called The Blog Factor, left as many questions unanswered as the Ticketmaster session. But this was only because the men and women behind the music blogs and Web sites that were representedSean Adams of Quietus Group/Drowned in Sound, Maura Johnston of Idolator, Amrit Singh of Stereogum and Jason Gross of Perfect Sound Foreverare trying to answer many of the same questions I posed in my recent interview with Pitchfork founder Ryan Schreiber.

Can blogs play by the rules of traditional journalism and criticism? Should they? And will they be compromised if they expand into other multi-media ventures, such as online video channels, choosing music for films, TV, video games or advertising, hosting music festival or starting record labels?

Gerard Cosloy, co-owner of Matador Records and one of the most extraordinary A&R men or talent scouts in rock history, joined musician and NPR correspondent Carrie Brownstein and the always even-handed moderator Gross to provide the voices of reason as bloggers looked in the mirror and admitted that they just dont know the answers to those questions yet.

The notion of conflict of interest, Im not sure how you even define that anymore, Cosloy said. But as long as there is ever the appearance [of a conflict] for example, that if you dont play my festival or buy an ad, youre not going to get favorable coverage there is always going to be that element. But its not just blogs [that have to deal with these issues].

While we may disagree on the merits of Times New Viking, I believe that Cosloy and I are on the same page here: The more things changein the shift of journalism from print to the Web, as in life in generalthe more they remain the same. Journalists and critics have been talking about these issue since long before Gutenberg built his famous printing press. And theyll be discussing them in the future when some new mode of communications (electronic telepathy?) replaces the Internet.