Talking Tickets 14 January 2022:
Number 118!
Hey from the Covid hotel!
The entire family has come down with the ‘Rona and before it a version of the flu and some stomach bug. So the last month has been awful around these parts.
I’m not sure when we will be free to leave the compound because we still have positive Covid results when we test…
Oy!
Anyway:
To the Tickets!
1. The Big Story: Live Nation is sued for anti-competitive practices:
Big Ideas:
Unregulated monopolies are good investments, FYI!
Looking at the way the case is laid out, the law firm has made a strong argument for its case.
In looking at American antitrust laws, for the last 40 years price to consumers has been the leading metric, followed by market share. So the numbers in the article are relevant.
I didn’t want to spend too much time looking for data this morning because I think we all have experience with things costing a lot more now than they did a few years ago, but from 2011 to 2019, the average ticket price went up around $20 from $78.33 to $96.17.
That matters because this anti-competition lawsuit hits right at the two big areas that antitrust officials will still typically take action on:
Increased price to consumers
Monopolistic market share combined with monopoly behavior
First, it isn’t illegal to be a monopoly in America. What is illegal is to use your monopoly power to thwart competition.
Don’t email me about this: I don’t get it either.
What’s the point of being a monopoly if you aren’t going to try and use it to control your market?
I mean, that is sort of the fiduciary responsibility of a business to maximize shareholder value. But it also offers up the counterargument that you need strong and consistent government enforcement to ensure that competition does exist.
In other words, you need both.
For the past 40 years, we’ve seen anti-trust enforcement really dialed back, but the big flashing signs that will get legislatures to act are price increases and anti-competitive behavior.
So when the suit points to the increase in prices of around 30% in the last decade, the 70% market share, and the 85% number for Taylor Swift, those numbers are likely to be compelling.
Second, I’ll give you a shortlist of ways that monopolies impact our society and you think through if you know any businesses actually do these things:
Higher prices for consumers
Less choice for consumers
Create inefficiencies
Less innovative
Gain monopsony power and drive down wages
I’ll just let you sit with that one for a while.
You think on it and let me know where you come down on things.
Finally, as an investor…do keep in mind that unregulated monopolies are great investments. So, if you have some money lying around, look at businesses that have huge market share and little or no regulation…it is the closest you’ll ever hear me come to giving you any kind of financial advice.
And, actually, get yourself a good advisor this year…
2. The Road to Recovery: American audiences could return in big numbers in 2022 or they might not…who knows?
Big Ideas:
These numbers seem a bit optimistic to me.
Data shows that Americans returned to using credit cards to finance their lifestyles in the 3rd and 4th quarter of 2021.
History shows pretty clearly that a lot of the headwinds we are dealing with still happen in any pandemic or plague environment.
I try to not be too up or too down on any of this stuff.
If I was too down, I’d put my money in my mattress. If I was too up, I’d put all my money in Bitcoin.
I’m always trying to be somewhere in the middle so I can see both sides of a story and adjust my risk according to what is likely to happen based on the numerous factors that go into any situation.
That’s what caught my eye here because this report says things will be back to almost normal in 2022 compared to 2019 unless they aren’t.
Let me see if I can make a few predictions based on similar stuff:
Brokers are going to have the best year ever in the United States unless they don’t because people aren’t buying tickets.
Sports teams are going to grow their revenues back to pre-pandemic levels unless they don’t because work from homestays in place a bit longer and people’s habits have changed for real due to the pandemic.
Theatres and operas will snap back to full houses unless they don’t because their audiences are often older and they may have moved to be close to the grandkids…or something.
I hope you see the joke in this kind of analysis.
No one knows exactly what is going to happen. We are all guessing here.
I do think that eventually arts, theatres, and gatherings will come back. Again, we’ve been doing this for thousands of years.
Do I know that it will come back exactly how it was before?
No.
I think we will see things end up a bit differently once everything shakes out.
If I’m selling non-essentials, I am concerned about inflation because the number of people starting to rely on revolving credit has started to grow again. That’s a bad number because that makes people really unstable and discretionary spending can go right out the window.
Most importantly, the lack of people in the workplace, people being uncertain about going out, people pulling back from social gatherings…any of these stories aren’t fear-mongering or out of pace with what we would have seen in any other pandemic.
I share a few stories below, but people hide out when there is a contagion in the air. Not everyone, but you’ll see the majority of folks do. Survival is hardwired into our biology after all.
After pandemics and during, you see the workforce shrink from death, illness, movement, retirement, and other causes. Again, this is almost universal in its historical occurrences.
All of this stuff is combined to create a challenging environment for every business.
The only advice is to keep paying attention to the data, take the best available public safety actions because that’s what will help your customers feel safe coming back and be flexible.
3. How-To: Price in a changing world:
Big Ideas:
Over $300 for a family of four or over $500 to go to an NFL game is a lot of cheddar.
How will the pandemic change this?
Looking at the segmentation of the market, there are a lot of segments being eliminated.
This one is interesting because pricing is marketing’s MVP moment. And, I’ve always felt like there was some sort of correction coming in the pricing of tickets and events, but long-term ticket contracts with corporations, consolidation deals with the secondary market, and an emphasis on experience had kept the ticket prices growing.
The pandemic has wreaked havoc on a lot of industries and we’ve seen in a lot of places where sports, entertainment, concerts, etc. are rushing back into the way we’ve always done it.
I see those heavy discounts under the guise of “if we just get them in the door”. I see the old sales floors trying to be regenerated. And, I also see that the historical data shows that there are corrections and changes after a pandemic.
No one knows how the pandemic will change our society, but history does provide a few clues:
I highlight this because everyone telling you they know exactly what is going to happen when we get through the pandemic is lying. So thinking that anything is going back to “normal” is far-fetched.
This brings me around to the segmentation and trends mentioned in the article. The data shows that older consumers don’t go to sports all that much.
This is problematic because people over 50 control most of the wealth in our society right now.
Lower-income folks aren’t going because they’ve been priced out. This means that you likely struggle with getting kids or young professionals or you aren’t giving a huge part of your audience the opportunity to experience your product.
On the other side, families are likely to splurge, but if taking your family of four to an NFL game costs more than $500 that’s likely a steep cost.
So how do you price now?
Start with your research. I’ll teach you about this in my pricing class. (Sign up for notification here.)
You’ll likely want to experiment a little bit. You can do that by using packaging products, flash sales, or using some sort of dynamic pricing software.
Finally, you’ll need to be flexible. A model I like is the way that tickets for Premier League games go on sale only a few weeks in advance of the match. This gives the team a chance to adjust their strategy, change their pricing, or package the ticket differently to reach their sales goals.
The key here is that you have to be on your toes now because what got us here isn’t going to get us wherever we are going next.
That’s history.
4. Profile/Tech/Tools: The metaverse will be the future of futbol, football, soccer?!:
Big Ideas:
The Socios app seems to be getting everywhere.
Web3 has potential, but like everything you likely should be careful about going all or nothing.
The big thing with any of these additions is value to the consumer.
This one I will keep short because I’m under the weather, but it does deserve a bit more investigation going forward.
Over the last year or two, I’ve invested a little bit in cryptocurrencies and NFTs, mainly to make sure I know what they are and how they are useful. Not a ton of money, but enough that if someone talks with me about it…I’m not a numpty on the subject.
The metaverse idea and the VR revolution and a lot of these things that people are screaming about right now, may or may not end up being things that are valuable to customers and help them engage with your product or service more.
What we have seen in a lot of places is that there is a danger in getting somewhere too early or too late. In a lot of instances, the just-right is missed.
With the advent of the metaverse and crypto, tokens and whatnot, we are probably still a little too early in the bell curve for the mass of consumers to really buy into the concepts.
That doesn’t mean putting them aside, but it does mean being measured in the way that you introduce things.
Experiment.
Test.
Adapt.
Learn.
The Socios app and its tokens are everywhere and there is a good article about what they really provide customers…TLDR: not much.
This is the thing to always keep an eye on and pay attention to, the value that is going to be received by the end-user. Because you don’t determine value, they do.
5. Blurbs and Such:
Unregulated monopolies are good investments: This has been my take on things for a while now. Welcome aboard.
The West End runs a promotion to remain open despite the Omicron variant: See?! If you have to run a price-based promotion, you control it. This is out of necessity due to the pandemic, but the framing of the price promotion matters tremendously to the perception of value going forward. Making this a January and February promotional price, not attached to a discount code or anything else is a wise way to run this type of promotion.
Baseball’s antitrust exemption is being challenged: I bring this up because it goes hand in hand with the unregulated monopolies story above. I don’t know what will happen with baseball’s antitrust exemption, but I do know that there has been more antitrust action in the last year or two than we have seen in the last twenty years.
Is texting a good idea for your organization? This is a good piece to help you think about using different tools to reach your target audience. Like Cici says, she doesn’t want you to have a “blast” approach, but to be thoughtful. I couldn’t agree more.
Bumbershoot returns! Bumbershoot is my favorite music festival. I love it. To see it return in 2022 is a blessing!
Melbourne’s arts scene has seen ticket sales drop around 60% in the last two weeks: This is disconcerting because there are capacity limits and the Omicron variant is disrupting Australia during their summer…oy. But watching how the businesses in Melbourne handle themselves now will provide some insights into how things may work for the northern hemisphere when things start to warm up here.
Broadway plays to 62% capacity: Omicron effect is real. And, it is going to be impacting us for the next few months. I think you’ll see more shows play a little bit with their return to business strategies.
Man City passes Man U in revenue: I share this because in the UK and in European football there is a greater level of understanding of the finances of your favorite team. This provides a good look at the books of City.
I’m still having a hard time getting podcasts posted because I’ve got the VID. Let’s hope next week to get the podcast up and running.
You can find me everywhere with my special Linktree! It is all my links!
Check out my friends at Booking Protect! Customers have been taking up refund protection at a rate that is double what it was before the pandemic began. This is a great opportunity for you to offer more value to your customers in a way that they want while also creating a new revenue stream for your organization.
Also, you’ll be able to see the Booking Protect team at INTIX in Orlando. I’m going to be able to Zoom in for the panel on Thursday…so check it out!
New Year, New Job?! Work at Fenway Park: