'It's called capitalism': Former Ticketmaster CEO defends company's business model |  CBC Radio

‘It’s called capitalism’: Former Ticketmaster CEO defends company’s business model | CBC Radio

How it happens10:40 a.m‘It’s called capitalism’: Former Ticketmaster CEO defends company’s business model

People frustrated with Ticketmaster are just lying in the bed they made, insists the former CEO of the embattled company.

Fred Rosen, a lawyer who ran the ticketing company from 1982 to 1998, watched US Senate hearings on Ticketmaster with frustration.

US lawmakers are concerned with competition and consumer protection in the live entertainment industry. At the heart of the hearing is the Taylor Swift presale fiasco, when more than 3.5 million people signed up for Ticketmaster presales for the pop star’s concert tour and the system crumbled under the pressure.

Fans and artists flocked to the company. Several US senators are calling for more regulation and oversight, accusing Ticketmaster of holding a virtual monopoly.

But Rosen says Ticketmaster is just an easy target. Here is part of his interview with How it happens hosted by Nil Koksal.

Is Ticketmaster the problem? Are fans channeling their frustration in the right place?

They were there [3.5 million] attempts to get into the Ticketmaster system. No system on the surface of the earth can do that.

It’s easy to blame Ticketmaster and say it’s their fault. But here is the truth. I’m pretty sure the act reps were told not to put all the shows on sale at once. And they decided to do it anyway.

In the normal course of events, if there are enough tickets and enough acts and enough times and enough nights when the act is playing, you could do it.

So are you saying Taylor Swift’s team or Taylor Swift herself put out too many shows at once?

I wouldn’t put all the shows up for sale when you knew the demand would be so overwhelming.

Joe Berchtold (left), chief financial officer of Ticketmaster parent company Live Nation Entertainment, and other witnesses were sworn in to testify before a Senate Judiciary Committee hearing. (Kevin Lamarque/Reuters)

The issues fans have with Ticketmaster predate any Taylor Swift issues. Ticketmaster was ordered to pay a $4.5 million fine and $500,000 in costs arising from the Competition Authority here in Canada after it investigated allegedly misleading price claims in online ticket sales. In 2018, CBC News investigated Ticketmaster for allegedly recruiting scalpers at a scalper conference. So I…

You asked me to discuss Ticketmaster, not what happened after I left. I wasn’t around for any of that.

I didn’t ask if you were directly involved. I’m just saying that fans have a history of mistrust over these issues aside from the Taylor Swift incident…. You told the Los Angeles Times, sir that you think the fans are largely to blame for what is happening with the awards. So explain why you feel they are to blame.

It’s really simple. They stole all the music. So 90 percent of an artist’s income comes from live ticket sales.

You know what I love? This is what I really love. I find it really fascinating. You call or want to do these interviews and everyone wants a shot at Ticketmaster. And a lot of it is written because it’s misinformation.

Ticketmaster does not set prices. Ticketmaster does not determine which shows will be sold. Ticketmaster does not specify how many tickets will go on sale.

When I was in business before, it was around the same time the internet started. Approximately 50 to 60 percent of the artist’s income came from music recordings. When Napster came along and…all the artists’ income went away, except for the superstars, it had to go somewhere. It’s physics.

A University of Chicago professor is quoted in the LA Times, Eric Budish, who says, “Ticketmaster is effectively getting paid for a punching bag.” But why do you think people focus on Ticketmaster and not the artists?

I [made] so that Ticketmaster took the hit for everyone, but Ticketmaster never got all the money. Don’t you understand that this is a business?

Everyone is mad at Ticketmaster. Okay, so we’re taking Ticketmaster out of business and now it’s your ticketing company. Do you think they would prefer you?

With all due respect, whoever does it, every venue operator knows this: It’s a thankless job. why are you doing this? Because it is economically advantageous and because someone has to do it. So do it.

You said you set it up so Ticketmaster would take the heat. But you sound really upset about it after all these years.

I’m not mad about it. I just find it absurd that people aren’t smart enough to understand that this is the game.

Is it Ticketmaster’s fault that the demand is 10x the number of seats they have to sell?

But it helps Ticketmaster fulfill this requirement, sir, if they have people…

We don’t refuel anything!

In sports, if the prices go up, it’s a badge of honor. Prices go up at concerts, it’s the end of the world as you know it.– Fred Rosen, former CEO of Ticketmaster

Ticketmaster has the ability to remove dynamic pricing or verified buyers who do not appear to be verified buyers to many ticket buyers. It seems that they are scalpers who are no longer standing on the corner, but … sitting in front of their computer and collecting a lot of tickets that the next day will be so many times higher than the original price that the artist had set. So Ticketmaster is in control right?

They don’t. You give artists options. You go to the store to buy a blouse. You say, “I want the red one instead of the blue one.”

That’s up to the artist, not Ticketmaster. You are completely wrong.

Well, I ask you to look to find the answer.

I just answered you.

The artist and promoter determine what tickets go on sale, what the prices are, whether they use dynamic pricing or not.

People stand outside holding signs calling for the disbandment of Ticketmaster and Live Nation.
Protesters rallied against the entertainment industry outside the US Capitol on Tuesday. (Drew Angerer/Getty Images)

So should we as fans demand artists… not the smaller ones, but the big, big ones, to say no to dynamic pricing and verified reselling?

I would say that in the end the anger is misplaced. Because let me ask you this question. Who is the recipient of all the money? Follow the money. Who is the recipient? The recipient is an act.

If Ticketmaster is doing everything right, what do you think is the harm in more competition and oversight?

First of all, it’s called capitalism.

Second, this is a big mistake that everyone makes. More airlines will not change prices. What determines price is demand. You can have 400 tickets and the same number of tickets and the prices would not change.

Are you frustrated trying to buy tickets?

I don’t go to events much. When I was running Ticketmaster, I didn’t go to a lot of events.

Maybe if you tried the user experience, maybe you made some changes?

I have to tell you something. And I want to say that you are a very nice woman. Because people [have] he has to grow up. People need to recognize that this is a business.

The truth is—and here’s what nobody wants to address—that nobody pays more than they want for a ticket because you don’t have to walk. And it is not nobility obliges. The fact is, it’s fun.

When the Philadelphia Phillies were there [the World Series] … people in Philadelphia were proud of the fact that all Phillies game tickets were over $1,000 a ticket.

In sports, if the prices go up, it’s a badge of honor. Concert prices are going up, it’s the end of the world as you know it, and the ticket company is being blamed for everything except the kidnapping of Lindbergh’s baby.

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