Barry Diller Defends TicketMaster Against Allegations Regarding TicketsNow. Does Not Mention (Or Apologize To) Bruce Springsteen

Posted by: Jon Fine on February 10, 2009


And Bruce, if you haven’t heard, is not happy. Although TicketMaster can take heart that at least Bruce’s angry fans, or politicians seeking to piggyback on their anger haven’t sued—or at least not yet.

The following is a lightly edited transcript of Barry Diller, IAC’s Chairman-CEO and nonexecutive chairman of the proposed merger of Live Nation and TicketMaster, responding to a question on an investor conference call regarding class action lawsuits being readied against TicketMaster and its “secondary” ticketing site, TicketsNow. Said class action suits stem from this particular situation. Real-time transcription is all mine. So are any typos. A pressing deadline elsewhere means I present this without any additional comment, though I hope you add some.)

BARRY DILLER: Class action … they are (sighs audibly) What can I say about them that have no merit, but are just chasing cars down the road?

What really happened there was an actual glitch, a technical glitch in the system that had nothing to do with availability. It had to do with Visa, I think [UPDATE: Visa reps deny this. See the spokesman’s statement at the end of this post.], which couldn’t process data and so it kinda froze the system for a bit. When it froze, what the TicketMaster screen said was it couldn’t process anything. And another screen came up and said, ‘you can go back and try again, you can modify [the order],’ and the other side of the screen said you can go to TicketsNow. Our reseller sister company.

It was confusing, It was not out of TicketMaster saying tickets were not available, and pushing people to a reseller site. That was not Ticketmaster’s intention, et cetera. There is no real controversy. The issue is there is a secondary market, that has existed for a long time. It’s usually been called “scalpers.” That is a reality, and has been for a very very long time. All sorts of practices go on. We tried to to make [the reselling process] transparent and will continue to make it more [transparent, and to make it secure.

TicketMaster is not in the business of denying primary tickets to anyone in order to push them to the secondary marketplace. It will continue to make improvement so there are absolute—there is a ringing clarity between the two. That is the policy of the company. We don’t push people to the secondary market, other than when the house is sold out.

Again, I just think this is such a sexy issue. TicketMaster is never perceived to be on the side of the angels because there are only so many tickets. When they are finished, people get angry. That’s understandable. That’s part of the life of being in that kind of service business. But the noise all around this was wildly overdone and it was of course, the timing unfortunately. That’s what happens in life. A computer glitch gets . . . promoted, let’s say.

We are going to explain it. We haven’t been able to until today. We will explain and explain and explain and make all this clear to all constituencies. We have a situation in New York. I think [New York ] Senator Schumer made statements that were factually untrue. In detail, untrue, which is unfortunate, but hardly unknown.

We are going to keep setting the record straight.

UPDATE: Evidently Diller is referring to this just-posted letter on in that last sentence.

UPDATE: The statement from Visa:

Statement from Joe Carberry, spokesperson, Visa Inc.

"We were surprised by the comments of Ticketmaster CEO Barry Diller regarding their recent ticket issues.

"Ticketmaster's characterization that an earlier technical 'glitch' impacting its online ticket sales was related to Visa's systems is inaccurate. Visa's processing network was fully functional on February 2 with no authorization issues. In fact, VisaNet has run with nearly 100 percent reliability for the past decade.

"VisaNet is the world's largest retail payment network, securely and reliably facilitating the transfer of value and information every minute of every day of the year. We operate four processing centers on three continents that are fully synchronized and operate identical authorization platforms. This enables Visa to reroute transaction volume from one data center to another as needed. Our multiple and redundant systems help ensure that VisaNet can continuously meet the processing demands of all our customers worldwide.

Reader Comments

Glenn

February 10, 2009 2:58 PM

I'm surprised that people react so vocally against the secondary market. In this case, yeah, the event appeared "sold out" and people were taken to TicketsNow. People don't like shows that sell out instantly. But in the grand scheme of things, big deal. People buy from the secondary market all the time. We've got licensed scalpers who stand across the street from the downtown arena in Nashville, being productive people in the marketplace by buying and selling tickets. They wear their licenses on lanyards around their necks. Scalping is legit. States have changed their scalping laws to accommodate the rise in online secondary ticketing, and the public has said not a word about it. Pro sports teams have official secondary ticketing partners, that's how legit this is today. Artists and their managers get tickets and sell them on these sites, just as they sell them to fan club members (another lucrative market in which Ticketmaster and Live Nation operate). Everybody's cashing in.

A market operates more efficiently when a ticket price is based on willingness to pay rather than ability to get in line first. That's why I think the secondary market is good. If Ticketmaster oversteps a bit and puts too many tickets on TicketsNow, the inventory will go unsold, artists will suffer, their managers will suffer and everybody will learn in the process what to do and what not to do.

Live Nation Entertainment isn't going to act like an 800-lb gorilla. I assume it knows it should rein in all desire to maximize short-term profits lest it attract too much attention from consumer groups and legislators.

Don

February 10, 2009 10:57 PM

How does the secondary market change the effect of the tickets going to the people who "get in line first?" In fact, the secondary market is supplied by people who get in line first.

The concept of Ticketmaster putting too many tickets on TicketsNow is equally puzzling- far from creating a glut on the market- that activity appears to have happened and is causing an uproar.

The secondary market has caused consumer anger for about 30 years now- it's likely never going to be considered legit.

(I buy "Diamond Club" baseball tickets from season ticket holders which is, essentially, a secondary market.)

Greg

February 11, 2009 1:14 PM

this guy is a moron I was first in line at a ticketmaster outlet in Vancouver BC for fleetwood mac tix first in line & I couldnt buy any tix but conveniently their on that ticket exchange site $49 tix starting at $200 its a computer glitch for every concert in every city in North America does this guy think the world is this STUPID

random

February 11, 2009 4:59 PM

It's one thing when a giant company like Ticketmaster has a technical glitch and people overreact. But this isn't the first time that Ticketmaster had "glitches" and sent thousands and thousands of people to its scalping subsidiary. It's a pattern and the company's immense size allows them to get away with it because there are few other places people can go.

It's like going to a gas station that decides to charge $6 a gallon after you try to fill up your tank and says that you must not want gas very badly when you refuse to purchase gas at these prices. Of course with a gas station, you can just go to another one. With Ticketmaster, you really can't.

Think about this; isn't is interesting that somehow, all these technical glitches result in fatter profits for the company? Was there ever a glitch when tickets were say, 30% cheaper than their original prices? While working in IT for years, I've never seen such productive and revenue helping glitches and system crashes. Personally, I'd call them a bait and switch tactic.

Random

February 11, 2009 10:55 PM

The blame should be directed at Julia Vander Ploeg as well; she is the VP of Marketing at TicketsNow.com. This "snafu" which they try to blame on a "snafu" will not only cost the company a $500 million dollar class action lawsuit to defend but the loss of sales because of the bad press, and the merger will probably not go thru. I would call your local congressman and include her name. She is the VP of Marketing of TicketsNow...

Eric Housh

February 19, 2009 11:11 AM

I don't think anyone buys this "technical glitch" story. The fact is, this has happened before on more than one occasion (Radiohead and Smashing Pumpkins, to cite a couple of examples).

Look, TM is cutting out the primary market because they can make more through their subsidiary. Big shocker. I actually have no problem with dynamically pricing tickets, but I think Ticketmaster should be transparent about it instead of acting like they are a victim here.

rosavicious

February 25, 2009 1:43 AM

Ticketmaster has become Ticketscalper....plain and simple. Myself and at least 25 other friends were online on Feb 10th to purchase Phish tickets. Not one single person got tickets. But, every single one of us got redirected to Ticketsnow.com and were offered $48.50 tickets for $193.00. I have lodged a complaint with the better business bureau, contacted my state attorney general's office, e-mailed countless bands, made posts asking for fan sites to rally people together... all to no avail. I am not going to stop. If we don't stop them, then the ticketing agency will make more money on live events than the bands, sport teams, etc. Rosavicious at hotmail dot com.

Post a comment

 

About

The media world continues to shapeshift as new forms arise and old assumptions erode. On this blog, Bloomberg Businessweek will provide sharp analysis and timely reports on the transformation of this constantly changing terrain.

Categories

 

BW Mall - Sponsored Links

Buy a link now!