SXSW 2011: The Evil Empire shows its face

March 18, 2011

“The music business is a cruel and shallow money trench, a long plastic hallway where thieves and pimps run free, and good men die like dogs. There’s also a negative side.”—Hunter S. Thompson

 AUSTIN—We can say this much for Nathan Hubbard, the CEO of the Ticketmaster division of the massive, recently merged monopolistic concert giant Live Nation Entertainment: At least he had the courage to put a public face on the most reviled company in the history of the music industry at the biggest annual gathering of people who represent pretty much the polar opposite of everything he stands for.
 
Though Assistant Attorney General Christine Varney defended the Obama Justice Department’s decision to approve the controversial merger at a panel last year, Ticketmaster/Live Nation sat that one out. This time, Hubbard turned up to represent the company that dozens of its own employees call “the Evil Empire” or “the Death Star” at a Friday morning session entitled “Indie Davids Take on Goliath Ticketmaster-Live Nation.”
 
The purpose was to discuss how the concert business has changed in the year since the merger, and though the panel included two of Ticketmaster/Live Nation’s sharpest critics—Los Angeles independent promoter Mitchell Frank and Andrew Kaplan of Chicago-based Jam Productions—the answer was that it’s been hard to tell if business has gotten worse for the indies because of the merger or because of the downturn in the economy, with 2010 being a dire year for live music in general.
 
Yet the skepticism about Ticketmaster/Live Nation was as thick in the room as the feel-good double talk spewed by Hubbard and John Read of the Justice Department.
 
Trying to win over the crowd, Hubbard noted that he’d last been to SXSW 10 years ago, when he performed at the festival with his band. (A word of advice after checking out the lame Dave Matthews-lite sounds on the Web site for the Stanford Business School graduate’s group, Rockwell Church: He’s really lucky he got a lucrative day job.)
 
Rockwell Church, 2002 promo shot
 
Clearly well-coached by the company’s public-relations minions to “stay on message,” Hubbard numerous times stressed that Ticketmaster has renewed its commitment to focusing on pricing (presumably of the more reasonable variety) and the fans that the company serves. “We’re trying to focus on and get fanatical about the fan experience,” he said.
 
Curiously, Hubbard almost entirely avoided the words “Live Nation” in favor of the name “Ticketmaster,” despite the now-merged company having spent the last year trying to get consumers and journalists to kill the generally hated name “Ticketmaster” and adopt the new “Live Nation Entertainment.” (When I asked about that during the all-too-brief Q&A portion of the session, Hubbard said he had no idea what I was talking about.)
 
Why is the name significant? Because the heart of the controversy here is that in many cases, the handful of remaining indie promoters in America have to work with Ticketmaster to sell tickets to their concerts, since Ticketmaster has locked most major venues into exclusive long-term contracts. But Ticketmaster now is part of Live Nation, which often competes for the same shows that the indie companies want to promote. The indies worry that their arch competitor now has access to inside information they can use to their benefit.
 
In approving the merger, the Justice Department talked a lot about building and enforcing a “fire wall” between the two ends of Ticketmaster/Live Nation’s business so that the giant cannot use inside information to drive its smaller competitors out of business. As the federal representative on the panel—and the only one wearing a tie—Read claimed that the firewall has been working just fine.
 
“It’s like my kids: When they know I’m in the room watching, they behave a little better,” Read said, putting the Justice Department in the role of Dad to Ticketmaster/Live Nation’s Dennis the Menace.
 
“We talk to the Justice Department all the time, and make it part of the company’s culture to comply,” Hubbard said with an Eddie Haskell grin.
 
Yet Read did note that the Justice Department has gotten complaints from promoters saying that Ticketmaster/Live Nation was violating the firewall provisions—though he offered no specific names or numbers, citing confidentiality. Nor did he specify what actions the government took, other than to state that the Justice Department has not yet had to sue the giant company for contempt. (Hey, that’s reassuring!)
 
L.A. promoter Frank agreed with the government that the merger has prompted the emergence of a number of new ticketing companies competing with Ticketmaster; in fact, the panel was moderated by the CEO of one of them, Andrew Dreskin of San Francisco’s Ticketfly. But Jam’s Kaplan disagreed: “We haven't seen a lot of new ticketing competition after the merger,” he said.
 
Last November, Jam filed a lawsuit against Ticketmaster seeking to break the long-term exclusivity deals at the three venues it owns: the Park West, the Riviera Theatre, and the Vic Theatre. Last week, Jam co-founder Jerry Mickelson said that suit has been settled, but he refused to discuss the specific terms of the settlement.
 
A quick scan of Jam’s ticket on-sale information reveals that all Park West, Riv, and Vic tickets now are being sold by eTix.com. The only tickets for Jam shows still being sold through Ticketmaster are for venues such as the Aragon Ballroom, the U.I.C. Pavilion, and Auditorium Theatre, which the company does not own and which have their own long-term deals with the ticketing giant.
 
One voice on the panel in the middle of the argument was Boche Billions/David Viecelli, president of the Chicago-based booking agency the Billions Corporation, which represents acts including the Arcade Fire and Mumford and Sons. “Life for artists has not really changed post-merger,” Billions said, adding that he has noticed an improvement in his dealings with Ticketmaster.
 
But the indie/underground veteran also said the current model for the concert business is broken in terms of the escalating ticket prices and ballooning service charges with numerous entities—the ticket broker, the artist, and the venue—all looking for an ever-larger piece of the pie. “We need to get back to basics,” Billions said. “Strip it all down and rebuild it.”
 
During the Q&A, Los Angeles Times reporter Todd Martens asked Hubbard how his company’s plans for a “flexible pricing scale,” where market demand sets the price for a ticket no matter how high, squares with the concern he was expressing for fans getting the opportunity to score decent seats for a reasonable face price. (It also can be asked how flexible pricing squares with an initiative that Ticketmaster is entering with independent promoters and ticketing companies to crack down on the electronic scalping running rampant on eBay and StubHub.)
 
Hubbard didn’t really answer Martens’ question, though in subsequent chats with reporters afterward, he seemed to indicate that the Ticketmaster half of the company disagreed with the Live Nation half of the company about flexible pricing.
 
Another question Hubbard dodged: A query from this reporter about why skeptical Chicagoans should not think that the campaign donations from the top two executives at Ticketmaster/Live Nation, Irving Azoff and Michael Rapino, to Chicago’s next mayor Rahm Emanuel were not a “quid pro quo” deal for favorable treatment for the company as it bids to build a permanent concert venue on Northerly Island.
 
“I can’t comment about that,” Hubbard said. “I don’t know what you’re talking about.” (Really? See the links below.)
 
Again, as noted up top, we can say this much for Hubbard: At least he showed up and responded—albeit with a non-response—to that question. It is more than this blog can say for Emanuel spokesman Ben LaBolt.
 
 

Amount of time Rahm has been ignoring questions from this blog about music and his ties to the corporate concert industry:

 
Previous stories in this blog about Emanuel’s corporate concert ties: