A New Standard for Concert Tickets

The new joint venture between Anschutz Entertainment Group and Outbox Enterprises is newsworthy. AEG Live is one of the primary entertainment presenters in the world, owning and operating a total of 105 major venues around the globe, and the new venture will likely give it more clout. With Outbox Enterprises, AEG may now have, in the words of a CNET technology journalist, “the best ticketing interface ever.”

AEG Live CEO, Tim Leiweke, made the announcement on February 2nd. The venture didn’t come as much of a surprise to Ticketmaster, however. Since the merger between Live Nation and Ticketmaster in January 2010, the Department of Justice has pressured AEG to establish its own ticketing business and so promote a healthier competition with Live Nation. Indeed the day after AEG made its announcement, Live Nation’s stock fell 3%.

“For the first time in 20 years there will be two serious competitors in the ticketing marketplace,” says Outbox’s co-CEO and president, Fredric Rosen. And Outbox’s ticketing model is arguably better than Ticketmaster, as it uses the ‘white label’ model, which offers venues control over their own ticketing. “We believe that the future is all about empowering venues to give consumers the best online experience possible,” explains Rosen’s counterpart, Jean-Francoys Brousseau. “Outbox Enterprises is designed to be responsive to the needs of venues and their individual brands in order for them to create deeper and more engaging relationships with the consumer.”

AEG represented nearly one-tenth of Ticketmaster’s sales last year, bringing in about $55 millions in revenue from services fees. Regardless, Live Nation Entertainment’s chairman, Irving Azoff, could shrug off the new development. Azoff does not consider the AEG/Outbox joint venture to be a threat. As a ‘white label’ ticketing company, Outbox would have to oversee multiple ticketing sites specific to each venue’s needs. “What I don’t understand”, says Azoff in a Billboard interview, “is [that] none of them are talking about how to market and sell tickets; they’re just talking about ‘we’re going to give you a site you can run yourself…I think running a bunch of individual sites is inefficient from a marketing perspective.”

Azoff’s point may be well taken. Conquering the web is all about consolidation. Sites such as Apple, Google, Amazon and eBay are successful because of their ability to integrate user products. Ticketmaster does just that, making them the number one player in the ticketing market, as well as the third largest e-commerce site in the world. Being paired with Live Nation, the worlds’ largest concert promoter, gives Ticketmaster much power.

AEG will be moving 10-12 million tickets per year to Outbox Enterprises. Outbox has major clients, such as Cirque du Soleil, the Bell Centre in Montreal and the Kodak Theatre in Los Angeles. Furthermore, certain venues are expected to switch their services from Ticketmaster to Outbox as soon as their current contracts expire. More and more venues want the ability to execute their own ticket transactions. This would drive more traffic through a venue’s website, giving the site greater value and more use for the operators. In addition, venues would finally control exclusive ticketing databases that include information on inventory, pricing, and consumer data and profiles. Although venues have always had access to this information, this was previously controlled by third parties rather than the venues themselves.

AEG is trying to maintain their current relationship with Ticketmaster, as it is understood that the ultimatum given by the Department of Justice made the separation inevitable. “We are going to have an existing relationship with Ticketmaster and Live Nation,” says Leiweke. “And we want to make sure we don’t burn any bridges here, we take our time, and we take a little bit of pressure off them and us on the transition.” Consequently, AEG is making the move to Outbox gradually. They plan to sell multiple venues’ tickets with them within the next six months, and expect to have Outbox Technology fully integrated by 2013.

Competition in the ticketing industry comes as a relief. Ever since the merger with Live Nation, Ticketmaster’s monopoly in the market has been undeniable. It is refreshing to see multiple ticketing options on the horizon and venues that seek more control will have more choice with the ‘white label’ concept. Still, Ticketmaster is successful because their methods truly work and it will probably remain the number one ticketing site. Ultimately, competition will determine the most successful industry practices. In the meantime, representatives from Ticketmaster, TicketsForce, and TicketFly claim they are happy with Outbox as AEG’s business partner. It sounds endearing. But these archrivals may not be as accommodating of each other’s interests in the long-run.

By Athena Frost

Sources Cited
http://www.fortherechord.com/aeg-enters-the-concert-ticket-marketplace-with-a-new-joint-venture/
• http://www.pollstar.com/blogs/news/archive/2011/02/03/755251.aspx
• http://www.ticketnews.com/news/Live-Nations-Irving-Azoff-relishes-competition-with-AEG-Outbox021109825
• http://www.ticketnews.com/news/Live-Nation-stock-price-drops-three-percent-following-AEG-Outbox-news021103713
• http://www.billboard.biz/bbbiz/industry/touring/aeg-s-leiweke-and-outbox-s-rosen-talk-to-1005022192.story
• http://www.billboard.biz/bbbiz/industry/record-labels/exclusive-irving-azoff-on-ticketmaster-competing-1005025552.story
• http://classic.cnbc.com/id/41404609
• http://www.prnewswire.com/news-releases/aeg-cirque-du-soleil-and-jean-francoys-brousseau-owned-outbox-technology-and-fredric-d-rosen-to-form-joint-venture-to-provide-electronic-ticketing-solutions-115176099.html

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