Talking Tickets 6 Aug 2021: Pricing! Bob Lefsetz Talks To Michael Rapino! The King of Tickets! And, More!
Number 96!
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To the tickets!
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1. Clubs across the Big Five Leagues in Europe lost $29.9B in 2020-2021:
Big Ideas:
Almost $30B in revenue was lost by Europe’s big 5 football leagues during the pandemic. These are sunk costs so the only path for recovery is forward and focused on what’s next.
Remember: Volatility + Recovery = Opportunity
Now is the best time for folks to actually rethink their businesses and to focus on leveling up and truly being market-focused.
This is a pretty interesting analysis of Europe’s largest football leagues and the financial impact of the pandemic on their businesses.
You don’t have to go back too far to remember ‘The Super League’.
I miss it. I did more press and had more fun in those three days than should be allowed!
Almost $30B is a big loss and I think the initial reaction of most people is to look at that number and ask some form of the question: “How quickly can we recover that?”
The truth is that the wise way of looking at this is to think of the losses as sunk costs, like you’d do if you made a bad business decision.
You have to dig out of your hole, certaintly. At the same time, you aren’t likely to find some magic wand that turns that bad year into some miracle recovery. (I’ll get to the La Liga deal with CVC later.)
What do I mean?
I mean that the longview is important here because the climate of sports and business has changed and we really aren’t sure how long that will last or what the recovery is going to ultimately look like.
To put it another way, remember my formula:
Volatility + Recover = Opportunity
How should Europe’s biggest leagues and clubs deal with this?
How should you deal with this?
Probably in a similar fashion.
First, rethink your strategy.
Again,I’m a bit of a broken record on this one, but strategy before tactics.
Where will you compete?
How will you win?
In an ideal situation, what does the success of your business look like?
Second, now is a great time to become Market Oriented.
I’m reminded of Arsene Wenger’s comments about “what fans want” when talking about the club World Cup and the need for it while fans were like, “we don’t want that.”
Being Market Oriented means taking a step back and recognizing that you don’t really know what your customers want until you ask them.
It is really all about a constant conversation between you and your market.
It is about being curious and focused on knowing your market in a way that enables you to deliver value to the folks you are looking to serve.
You can tell a business is actually Market Oriented when they do stuff like:
Talk about their research.
Point to specific examples of success backed up by customer quotations or observations.
Can point out specific things that their customers have expressed that are valuable.
Finally, you are going to want to build out a cascade of choices.
What does this idea mean?
It means that there is a logical pattern to your decision making process and that one decision flows out of the next.
You start with the idea I pushed at the top of looking at strategy before tactics. You decide on what you want to achieve, where you are going to compete, how you’ll win business, what you do well, and how you are going to use to manage the business in a way that the competitive advantage shines through.
Each part of your organization should be making these choices and thinking through the possibilities.
An example of the type of multi-level thinking that goes into something like this can be found in my conversation with AudienceView CEO, Mark Fowlie, as we discuss how his team worked through the early part of the pandemic, built on things that they were successful with in the past, and adjusted their strategy to deal with the new reality of a world that would be different after the pandemic.
The key here, as the article states, is that this provides an opportunity for the teams and leagues to rethink their business practices from the way they present games to the revenue opportunities to the way they develop and keep fans, and beyond.
It is all marketing and it all matters, especially now.
2. Spotify finds the live experience ‘interesting’:
Big Ideas:
Spotify is doing what all of us should be doing, focusing on improving and adding value to our market.
Think about this situation in terms of power, does looking at live experiences improve Spotify’s power in the market? Yes.
A move into events, merchandise, or other parts of the experience economy is right for Spotify’s brand.
Spotify is this interesting business because streaming has killed piracy, but created new problems and opportunities for labels, artists, and folks in the live entertainment business.
What we’ve seen over the last few years as Spotify has established itself as a bigger part of our lives is a business that is working on building out and getting themselves into more and more areas where they can capture folks’ attention and their spending, from their use of ads, purchase of audio content productions like Joe Rogan’s podcast, and their partnerships with folks like Bruce Springsteen and President Obama on their podcast.
The key here is that Spotify is a business built around content producers and the people that consume that content in the form of music, audio, and, maybe more.
So when you see that Spotify finds live experiences “interesting” you should pay attention for a few reasons.
The simplest is that they’ve shown a willingness to change their business model. Starting with music and growing into other audio or video is one step, but expanding into the next area of events just makes sense.
The emotional connection between artist and fan can be white hot and capturing someone in the moment of reliving a concert experience or listening to a favorite song is a wise way of thinking about expansion. Because the connection is so strong.
Maybe, most importantly, Spotify can act as a search engine for event discovery because in doing research for a project I did with a startup, discovery of events was the top challenge folks had in spending more money on live entertainment.
I’m reminded of the last time Tom Petty came to DC and played the 9:30 Club and I only found out the next day.
I’d have gone!
Now, I never will get to see Tom Petty.
Think about this for a second, if its me…someone involved in nightclubs, sports, Broadway, concerts, and tickets for over 20 years, how does an average person know a thing?
For folks in tickets, what does Spotify’s potential interest in live entertainment mean?
You begin where you should begin all strategic thinking by looking at where the power is and whether or not a strategy offers a business more power or less.
If you aren’t familiar with the Power Framework, it is pretty simple. You look at power through the lens of whether or not a strategy gives you more power over:
Your customers
Your competition
Your suppliers
In the case of Spotify, they’d definitely have more power over their customers because they’d have more value to offer them. They’d also probably have power over their competition due to having a bigger customer base and something unique that even if it is replicable would take time to build. And, they’d have power over their suppliers because they have such a big audience of listeners.
So, yes, entering live entertainment would be a potentially strong move for Spotify because it would enable to gain power in the market.
Second, does this have a branding impact?
The short answer is yes.
A move like this should improve Spotify’s brand position when it comes to music and audio content by tying the company even more firmly to the content producers through brand extensions.
As I learned in marketing school, brand extensions are bridges to a new area of focus meaning that taking Spotify’s existing partnerships and extending how they work with artists is the first step into Spotify creating their very own catalog of events, experiences, and in-person content.
This all plays to Spotify’s strength and happens in a manner that makes sense.
Finally, what does this do to the product?
Remember that product consists of three aspects:
The core benefit
The actual product
The augmented product
In looking at Spotify’s interest in live experiences, you have to think of all three areas of the product to get a clear picture.
The core benefit could be that when you think of music and audio content, you think of Spotify.
The actual product can be a ticket, an event, or some merchandise.
And, the augmented product can be everything from the search function, to the discoverability, and the way the website functions.
It all matters.
The thing about this exploration of live events is that Spotify has a lot of strength in the market and their idea of moving into more aspects of the business of content just makes sense.
As I talked about with Patrick Ryan before on the podcast, the need to shift and always think about value is constant. That’s what I see in this Spotify story, a constant focus on improving the value they provide to the market.
I guess my question for y’all is how have the conversations about value changed in your organization?
3. Me, Michael Rapino, Pricing, and More:
Big Ideas:
Pricing is marketing’s MVP decision and at all levels of the world of tickets, better pricing decisions should be a priority.
The recovery won’t be a straight line, but the opportunities that are coming should be exciting.
The secondary market will have to work to keep up, but change was always coming and recreating value was always a key idea.
I’m still working my way through this podcast because I’ve been dealing with stuff this week that has limited my podcast listening like watching Succession when I’m running on the treadmill instead of listening to podcasts.
I’m kidding, not about the running on the treadmill…need to get suit ready again!
You should check out the podcast and listen to the whole thing. It is an interesting conversation about the state of the ticket industry right now, coming, obviously from the angle of someone that holds an outsized amount of influence over the whole business.
As I was listening to the podcast and checking out some of the notes, recaps, and highlights, I came back to three ideas that have stuck with me last week and this week.
First, as Professor Scott Galloway says regularly, “It is wise to invest in unregulated monopolies.”
Like Facebook, Amazon, Google, and Apple, Live Nation has been able to grow with little or no thought put into the impact on the economy, the country, or the market and that has real implications on the businesses of tickets, artists, venues, and other people in the live entertainment ecosystem.
TBF, if I were in their position, I’d do the same thing.
It isn’t their job to stop themselves, but it is worth noting that the lack of competition created by Live Nation’s size in the market definitely has an impact on the whole industry.
Second, I agree with Bob and Michael, the live experience economy is amazing and should be a place where investors are looking for growth because history is pretty clear that people get together to be entertained, to celebrate, and to party!
Finally, I’m with Michael on the need to be smarter about pricing.
I feel like half my time is spent telling folks to stop pricing like knuckleheads as it is.
Obviously, Michael is talking about finding ways to beat the secondary market, but I’m just talking about pricing in general…no matter where you are.
What did these three things mean to me?
Well, let me share a few ideas.
First, on pricing…duh!
Pricing is marketing’s MVP moment and it is likely one of the most important decisions you make in your business.
This is one of the big reasons to host a panel on the topic at Ticket Summit. To help people understand how to be smarter in their pricing strategies so that there isn’t a race to the bottom, a bunch of deadwood sitting on the market, or other bad outcomes that can be fixed by better pricing.
I’m not niave enough to not recognize that Rapino is talking about better pricing decisions to help Live Nation and their partners capture more value. That’s something we can cover later, but the core idea of the need for better pricing is front and center for me.
The starting point of better pricing is in the research you are doing.
From there, you have to be customer oriented enough to recognize what the real value is that folks are getting from your event and be willing to price in a way that fits into your strategy because as much as these articles tend to focus on how much money is on the upside, there is a big downside that’s undermining brands because before the pandemic more than 50% of tickets were selling below face value on the secondary market.
Premium has a brand impact, but so does cheap, free, and discounted pricing. It is a balance.
So, yes, pricing is a key concern.
Second, the recovery won’t be a straight line.
The numbers and the examples are all pointing in the right direction because shows are selling, we see crowds in Fenway Park, at Lollapalooza, and around the NBA. And more events are going on sale everyday.
But we also can’t lose sight of the reality that we are still dealing with a new variant of the coronavirus that spreads much more quickly and seems to be deadlier.
As a bonus, another one is emerging that might be less resistant to the vaccines while 100 million Americans are eligible to take the vaccine and won’t, some with legitimate reasons, others because Bill Gates is going to microchip them.
While in other countries, there aren’t enough vaccines or the rollout has been hit or miss.
So, as we’ve seen throughout this, we need to focus on improving our businesses and growing, but we can’t turn a blind eye to the potential pitfalls we might deal with either.
Finally, the secondary market will need to keep up.
In my time being involved in and around the world of tickets, I’ve seen the secondary market evolve at least three different times.
My firm belief is that even before the pandemic, we were at the end of a cycle for the business of the secondary market.
And, that the value that brokers, consolidators, and partners were bringing to the market would need to change, and would. This interview with Michael Rapino just highlights the need to constantly think about adapting your business and focusing on creating new value because the technology is changing, the demands of the market are changing, and what constitutes value is changing.
I guess it is a good time to remind you:
Volatility + Recovery = Opportunity
But also this idea of change is as constant as anything else in life.
4. World Rugby looks to Private Equity as a path to build the game globally:
Big Ideas:
Don’t do a deal if your only ambition is to get back to business as usual.
To make a deal like this succeed, you have to aspire to win and win big.
Research is the first step in getting any deal, project, or campaign right. The first step is always a step back.
This is fun because I picked up on the Rugby story before La Liga announced their partnership with a venture fund to sell off 10% of their business for around $3 billion dollars. (And, as more details of this deal emerge, what a bad deal for La Liga it is…)
My timing is good and this is a story I’ve been paying attention to for the last year or so as the pandemic has roughed up a lot of people’s balance sheets.
The first idea that comes up here is that you definitely need investment to grow, so just taking investment alone isn’t a bad idea. I mean, Tottenham Hotspur has been incredibly creative over the last few years using banks, investment grade funds, and other tools to build a world class training facility and a new stadium.
So I’m not anti-investment, but I am cautious about these kinds of investments because I have a great deal of concern about how well a lot of these businesses are being run and how introducing private equity into the mix could impact the businesses, the teams, and the customers.
Because, in a lot of cases, the TV money and the sense of success that had taken hold in sports leagues around the world had created an environment where innovation wasn’t happening, best practices were not present, and disruption was inevitable.
How do we tackle this stuff and push on?
Begin at the beginning by taking a step back.
The Super League and the FIFA Club World Cup idea are two examples of the need for research and taking a step back before you do anything else because the Super League seems to be something that was thrown together in a fever dream and the Club World Cup idea has had tons of folks internally saying, “This is what the fans want” and all the fans are saying, “No. Not at all.”
You have to begin by stepping back and looking at the market around you.
Again, people moan about me talking about research calling it “basic” or “101” stuff and I tell them that of the unsuccessful projects I’ve worked on or the business failures I’ve seen, they all share something in common…a refusal to do the basic foundational work of strategy and marketing.
That foundation is strategy.
In this case, if you are thinking about taking private equity money or investment of any nature, you have to take a look around and know what the world looks like, who your customers are, and what they value.
It is simple and basic, but it is essential.
To put it another way, your opinion on what customers want or value is probably wrong and, worse, likely dangerous.
So stop it!
Do your research.
Second, you need to set some aspirations for your business.
I’m going to say that one of the big reasons that the Premier League is the biggest soccer league in the world right now has to do with their aspirations. When the idea was first floated, the aspiration was to be the biggest league in the world.
You need that.
Now, everyone is playing catchup with the Premier League in European football.
In truth, the same thing is happening with most sports in American chasing the NFL.
Why?
The NFL has the aspiration to be the biggest and baddest. Right now, everyone else’s aspirations seem to be catching up with the NFL.
You have to play to win.
If your aspirations aren’t to be the best, you aren’t likely to get the results you want. Winning business is tough, but trying to win just enough business is a fool’s errand.
So when you look at these situations, what are you trying to become?
Look at me for example, laugh all you want, who else has been called “The King of Tickets” by the BBC?
This happened because when I started in the ticket game, I decided I wanted to be the best ticket salesperson in the world.
Before the pandemic, The Business of Fun was the number 1 podcast for folks in the world of live entertainment, concerts, sports, and entertainment.
Why?
It wasn’t because I’m modest.
Play to win! Have a goal to be the best.
Finally, this situation shines a light on the need to focus on the product.
A lot of these examples over the last few weeks have come from one specific direction but you could easily apply them wherever you were working…once again, here we are because focuing on your product is a key idea right now no matter where you are in the world of entertainment.
To refresh, think about product through the lens of three pieces:
The core value that your guest gets.
The actual product they recieve like a ticket, shirt, or admission.
The augmented product which is everything.
Looking at these examples, especially rugby, they seem to have already started this thinking as they’ve created new products through tournaments for men and women to tackle this. They’ve also looked at taking traditional products like their “games” or “cups” to new markets.
This is a jumping off point, no doubt.
And, it is something that La Liga looks likely to take advantage of as well with the ongoing talks to host a regular season match in Miami or another American city.
The key with the product thinking here is that you don’t have just one product to sell, you hopefully have many, dozens even. And, if you are being creative, innovative, and forward looking, you can use each of these to tighten the connection you have with your audience.
The big idea with investment, especially PE, right now is that the leagues or teams need to make sure they don’t just use this money to fill a hole and go back to business as usual.
To make the most out of these investments, they need to be a part of a larger plan to kick on and grow to the next level.
Because if not, things could get ugly fast.
P.S. As I’m putting the finishing touches on this, the whole La Liga deal is in question as Lionel Messi won’t be resigning with Barcelona due to the deal and the salary cap implications of La Liga.
Big Ideas:
Recovery won’t be a straight line so you need to take a long term view of things.
Partnerships should create exponential growth for y’all. Think 1+1 > 2.
Change is scary, but it is also an opportunity filled moment. Remember the equation of: Volatility + Recovery = Opportunity
I like these looking forward pieces because there are a few things that I like to focus on when I’m working with folks:
Managing and using change.
Improving the customer experience as a way to grow your business.
Leveling up and pushing towards a more exciting future.
So this piece hits on these topics and I like it.
There are a lot of things that stick out in this piece to me, but three big themes were on my mind:
Tech is cool and when used well is a force multiplier.
Focusing on growing and the future is where it is at.
Partnerships need to be 1 +1 > 2
Let me run through each of them quickly.
First, the way that the The Blackpool Grand Theatre has laid out its partnerships is pretty great. This is focused on the long term, focused on enabling each tech partner to do their best work, and is driven by the customer.
This is a really cool example of putting strategy before tactics.
Most amazing to me is that this transformation is being led by the marketing department, like it should be with a focus on using the tools available to provide the best possible experience for the guest.
From the customer, you work out.
Without a customer, you have nothing.
Second, it goes without saying that these examples are forward focused because the lead of the piece is about the plan for 2020-2030.
That’s a 10 year timeline.
That does a few things that are valuabe for any business:
Takes the emphasis off of the short term.
Enables the organization to invest in long term brand building and infrastructure investments.
Let’s the organization create milestones and plans that build off of each other to the ultimate goal.
The thing about this is that will this 10 year plan go exactly as it is laid out now?
Probably not, but that won’t matter because they’ve set a course as an organization and it is easier to correct due to market dynamics than it is to try and predict everything or go for perfection constantly.
In ‘The Whiteboard Workshop’, I’ve seen dozens of organizations that have broken free of the “everything must be perfect idea” to focus on forward momentum and see results of 2% or 3% profit margin increases, 10%+ in sales, and new lines of business or revenue immediately.
Having a plan and taking action on it has some sort of magical property that often gets lost in the feeling that you need to have everything right in the planning stages.
You don’t.
You can never have all of the answers.
None of us can.
Finally, your partnerships must be 1 +1 > 2.
Your partnerships need to offer tremendous upside for all partners. That’s what is cool about this case study and the strategies driving The Blackpool Grand Theatre forward.
As one example, look at the potential of The Blackpool Grand Theatre and their partnership with Activity Stream.
Recently, the folks at Activity Stream have rolled out their Activate email marketing tool on top of their traditional platform that helps deliver magical moments to guests by using the data you already have to help drive engagement, better understanding of customer habits, and provide you easy to use insights.
In coming together, the partners can stack customer data onto a new email campaign that feeds back into old customer data, refreshing it and giving the organization a new way to engage. Once the email cycle is complete and the purchase is made, the data and platform available can help the theatre customize the experience, highlight and engage new guests, welcome back members that haven’t been to the theatre in a while…and more.
To go a step further, this gets kickstarted by having a digital advertising partner that can drive traffic, help build off of the data that the Activity Stream platform targets, and enables the web traffic, email, and conversion process to play together…driving more value and better ROI.
So, how can all of us put these kinds of long range ideas to work for us?
Begin by thinking long term.
This isn’t as easy as we think it is because we still feel like we are constantly on the run and have to be always acting in the moment.
I’ve been reading an advance copy of, friend of the podcast, Dorie Clark’s new book, The Long Game. She covers how you can think and plan long term in a short term world.
But the beginning of the journey is by recognizing that you need to know where you are going. What’s your vision for the future of your business?
Simple, but powerful.
It is even more important now because we are starting a recovery that is likely going to have some ups and downs like all recoveries do.
Second, focus.
To me, you should really be focusing on two important things right now:
Your customers
Goals and objectives
In writing about having aspirations for your business earlier, I could have just gone on another tirade about the importance of your customers. Let this paragraph fill that gap because all of your goals, ambitions, and strategies need to be looked at through how you are going to help your customers.
Without customers, you have nothing.
As for goals and objectives, you need to be clear about these things so you can focus your energy, your people, and your resources on a couple of key outcomes that will push you forward.
In general, I’m a big advocate for making certain you have goals and action items created, but now that we are trying to dig our way out of the pandemic, the need to focus on a small number of goals or objectives is even more important.
How many is right?
I’ve gone as low as one and as many as three over the last 4 or 5 years working with people because when I was younger we would often try and hit up more goals and objectives…we always failed because once you get too many goals, it becomes a wishlist, not a plan.
Finally, understand that this period of change is a great opportunity.
One more time for the folks in the back:
Recovery + Volatility = Opportunity
Right now, you have a chance to reset your business. You get a chance to focus on the right customers, the right opportunities, and the right vision for the future of your organization.
Resets don’t come along very often, but when they do…you have to take them and run with them because quickly the status quo settles in and you get back into the rut that so many folks were struggling to get out of before the pandemic.
In this case, maybe you have wanted to reach new audiences. You can design your program, your strategy, your marketing from a blank slate.
It could be about young audiences. Again, same thing.
Just recognize that no matter if you are a team, a venue, a promoter, whomever….right now you have the opportunity to focus on the future and you also have the chance to create real, positive change.
So go for it.
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Find all things Dave at my Linktree!
Get the free worksheet on Net Promoter Score I’ve created with Eventellect. We’ve come together to teach you about NPS, the information you can gain, and how to do your own survey…all that and it is free! What a deal. Send me an email and I’ll hook you up.
Look at what my friends at Booking Protect are up to. We have some new programs that are on the calendar for the fall in the form of webinars on new revenue, customer service, and more. Make sure you connect with Cat, Cath, or Hayley to find out how you can offer refund protection to your guests.
Come to Vegas and hang out with me! I’ll be at Ticket Summit, August 15-17 with a super panel on pricing. I don’t think I need to say anymore! But, me, pricing, and 1300 ticketing folks! Let’s go!
Give the new email marketing tool from Activity Stream, Activate, a look. If you haven’t been communicating with your guests throughout the pandemic, now is as good a time as any to start those communications back up and Activate will help you make sure that your email marketing is more effective.