Adding Transparency to a Critical Process: Madonna, Alicia Keys Take The Concert Biz On Test Drives

It would not surprise me if many people who went to their first concerts in the 1970s or earlier remember being taken aback the first time they saw a corporate sponsor on a bill. Case in point: the Who on their alleged final trek under the sponsorship banner of Schlitz. It was not the quality of the product that troubled music fans, it was the idea that an entity not in the business of concert promotion was now involved in a show, forcing its agenda, possibly stealth-like, and somehow tampering with the fans’ altruistic idea of the performer.
Twenty five years later and distrust out the door: We’re shocked when there is not a sponsor listed on the ticket along side the name of the promoter. Oddly enough, this week saw two events that may well become new models for the concert business and I’m not sure if the one that involves just the standard promoter is the safer bet for consumers.
First, Alicia Keys came to Los Angeles on a tour overseen by Lexus. Not Lexus and a promoter, just the car company. Call it subliminal propositional marketing: You came for a concert, but you need a car and if you can afford these tickets, you might well soon want a bit of affordable luxury in your next vehicle. Care to test drive an ES or IS?
On Thursday Madonna announced her first tour with Live Nation under her 10-year, $100 million pact with the concert promoter. The dates themselves were of paramount concern, but deep in the details on the trek was a note that can be translated thusly: In Europe, Madonna and Live Nation are in bed with a company that facilitates the resale of concert tickets, aka, the secondary marketplace. It’s not scalping per se, just a facilitator of the resale of tickets, most likely at a price significantly above face value.

In their attempt to snare every piece or marketplace pie, have they extended one step too far by having a relationship with people who were once perceived as enemies of the artists?
Viagogo has been dubbed the “official premium ticketing partner” for Madonna's European tour, meaning the packages that include tickets at an inflated price plus other benefits will be sold by the same company that allows patrons to list tickets at whatever price they choose. StubHub has been designated the “official fan-to-fan marketplace” for Madonna in the U.S. and one has to wonder if the promoter and online reseller won’t further their relationship once Live Nation takes ticketing inhouse after its contract with TicketMaster expires at the end of the year.
Those in the resale industry see it as navigating supply and demand; old-timers see it as being in cahoots with scalpers. In some instances that’s true as there’s not an arena or stadium show that re-sale agencies don’t their hands on blocks of tickets, but even if they sell their entire inventory through StubHub or viagogo, the online facilitator only gets a 10% fee.
Eric Baker, the head of viagogo and a co-founder of StubHub, says there’s a benefit to including the re-seller in the operation.
VIP packages, he noted, help reduce the cost of the cheaper seats, which in the U.S. will be as low as $50. (Most venues are topping out at $300 for a chair; that number will be higher when packaged with VIP benefits but Madonna, viagogo and the promoter will each get a cut).
“Some people have been very smart about effectively scaling the arena” in terms of price, Baker says. “For Streisand, every ticket was $450 and that’s crazy. That does not create accessibility. Premium packages used to go to corporations and to friends – it was almost like the Super Bowl: You need to be an executive to get a ticket. We’re making those packages available. Second, we’re maintaining a reasonable number” so fans will have access to the best seats without buying the bonus package.
Now spin it 180 degrees. Lexus is banking on the concept that an Alicia Keys concert-goer is a potential buyer down the road. To the car company, Keys represents class, youth and a desire for the better things in life; the Lexus connection is a natural. (As a Lexus driver for the last two years after driving the same Acura for 14 years, I have to say I was taken aback when I received a flyer promoting Lexuses for college grads. It seems like a car for the over-30 set.)
In her 30-city tour, Lexus is going into one section each night and dressing it up with seat covers and other luxury elements. In select markets they are taking over the venue’s VIP lounge and designating it the Lexus Lounge. And they’re targeting lifestyle media – African-American, post-college, etc. - that the fanbase is likely to consume. Despite getting the Lexus sales pitch prior to the show – I accepted their offer of a pair of tickets as Keys’ label was only offering a single – they’re presence at Staples it never felt overbearing. The car on display outside the entrance looked pretty cool in the spotlight. (Another old-timer recollection: Miller Beer’s band-sponsoring efforts in the ‘80s in which the backs of stages were plastered in MGD posters. It made you want to drink Corona).
Lexus, which dipped its toes into tour sponsorship with Paul McCartney and Eric Clapton, ostensibly proved that direct marketing can work at concert when you don’t go overboard. Madonna and Live Nation are embarking on a 10-year journey that is bound to have bumps and for all we know, ticket re-selling may just be one of those things that is accepted as a fact of life by her fan base.
We saw, rather vividly, what happens when the fans and their financiers are not familiar with the operation when Miley Cyrus tickets were near impossible to acquire at face value. Grand-standing politicians wanted in on the secrets of concert promoters, fan clubs and ticket vendors – a bit of By Any Means Necessary to make sure 9-year-old Ashley from Mission Hills, Kan., gets to see her idol. By the end of next year, we might be looking at a second chapter in that saga if an ordinarily connected sector of the public believes power has been usurped from them by some guy offering a pair of10th row ducats for nine times the face value …. and that salesman has a direct connection to the promoter.

In the last week, I have attended two concerts and seen two acts, Keys and Rush, leaving me with 70 concerts and 182 acts to go on the path to 100/300. Heading to Cannes for two weeks.