The NYT, in a front-page piece, analyzes the sticky revenue state the networks are in:

For the networks, the crisis is twofold: cultural and financial. For viewers, the result is more low-cost reality shows, prime-time talk and news programs and sports from the institutions that once made “Hill Street Blues,” “All in the Family” and “Cheers.”

NBC’s decision to move Jay Leno to a Monday-through-Friday slot at 10 p.m. eliminates the chance of the network developing another “ER” for that hour, but it will save the network tens of millions of dollars.

Doesn’t CBS have an albatross news anchor who’d be great for a “prime-time talk and news program” and would save the network the tens of millions it spends on “CSI”?

But Mr. Julie Chen, that albatross’s biggest supporter, says he’s not buying the premise:

One dissenter is Leslie Moonves, the chief of CBS, who defended network television at a media conference in December, saying, “I’m here to tell you—the model ain’t broken.”

———–

Previously in Hitsville:

Dear Tom Shales
Katie Couric—Where America Turns When the News Is Over™
Katie Couric, the News Anchor That Nobody Watches™
Couric and CBS, lying
Should CBS jettison its news division?
Katie Couric’s ratings hit a new low
Howie hearts Katie
Kurtz the lame
Couric, the debate, and the vaporization of CBS News
Katie Couric, a year later 

The story apparently started here, seemingly confirming word of 30 positions being eliminated, with a more apocalyptic version supplied by Hypebot, based on a source who says:

“It is about 90-100+ people across the US and global offices - anti-piracy, coordinated IFPI/BPI etc - trust me it’s a bloodbath…

The acronyms refer to overseas industry groups.  The phrase “trust me” doesn’t instill confidence, but the source goes on to say an announcement will be made this week, and supplies this further detail:

DC offices are getting closed except for one part of one floor on Conn. Ave., just for the address.

I don’t remember the DC office as having more than one floor, but for all I know they have an underground bunker. We’ll apparently see this week.

The organization is spinning the cutbacks as “tough economic times,” but since the record industry has been facing the toughest times of all going on for seven or eight years now, it seems more like the record industry is finally giving up on this destructive, vicious, counterproductive and stupid organization, whose anti file-sharing jihad has fruitlessly done its best to ruin the lives of people guilty of little else than liking music and distracted the industry from taking steps to deal with the changes in its business model.

I feel bad for the people are losing their jobs, but one can only hope that the larger number is the correct one, with corresponding decline in the group’s ability to harass music fans.

Meanwhile, as noted earlier, the group’s most despicable creation has reared back into view, working on—what else?—the Live Nation/Ticketmaster merger.

update:  Greg Sandoval at Cnet has more details; he says the group has only 104 employees, making the 90 to 100 number pretty unlikely.

p.s. For the record, it’s worth saying that I acknowledge that, leaving aside the legal issues, file-sharing skirts some moral rough ground. Here’s the way I rationalize my opposition to a group that says file-sharing is stealing and that they are protecting their business:

1. It was obvious immediately to smart people and soon after that to dumb ones that the nature of digital information and the internet made it impossible to stop or even decrease file-sharing
2. It this context, the group didn’t even spend its time going after commercial or large-scale sharing set-ups; it sued tens of thousands of ordinary people, often though sleazy legal means, and kept at it even when it became clear that file-sharing would nonetheless grow astronomically.
3. This is a larger issue that deserves more exposition, but it’s basically true to say that the vast majority of artists don’t make money from CD sales. And, as is often noted, the industry had gotten cozy selling $15 CDs to people who really just wanted one or two songs. The suits were designed to protect a parasitical business model that put the record industry between artists and fans.  The RIAA essentially does business like the Sopranos:  They didn’t want file-sharers muscling in on the operation. It’s their job to rip off artists.

Consider this from Walt Mossberg’s review of the Kindle 2:

The new model carries the same relatively high $359 price tag as its predecessor, but it offers faster page rendering and 25% better battery life. The catalog of books available on both Kindles has now swelled from about 90,000 in 2007 to over 230,000 today, and titles still typically cost around $10. You can still subscribe to periodicals and blogs, and there is still a crude Web browser built in—but this gadget is mainly for reading books.

Emphasis added. Question: Why does the book industry knock off almost two-thirds of the price of a book when it sells it digitally, but the record industry is effectively getting roughly 80 percent of the pre-iPod-era price of a CD?

Ray Waddell, in Billboard, crunches the numbers and makes what seems to me to be the best case possible for the situation concert promoters find themselves in these days. Waddell covers the concert industry for the magazine, and probably knows as much as anyone about it. It’s a long and complex piece, with lots of figures and not much of the lies and posturing we saw at the hearings from the merger’s principals, and worth reading, even if you don’t agree with it.

He raises many interesting points. I want to address one, stemming from a case study he gives of a show by a Latin singer, Luis Miguel:

The concert grossed $808,575, according to Billboard Boxscore, an impressive total for a 19,000-capacity venue. Miguel could have made up to $730,000, based on the common concert industry practice of giving the artist 90% of the box-office gross and leaving the other 10% for the promoter. But the promoter in question—concert business giant Live Nation—may not have made money on the show.

The concert appears to be a success until one looks at the money left on the table. Although the Cricket Wireless Amphitheatre can hold 19,391 fans, only 11,045 bought tickets to see Miguel. The singer made money, thanks to a gross driven by a high top-ticket price. But Live Nation makes most of its money on the things people buy once they get to the concert: concessions, parking and its split of Ticketmaster’s service charges. And all of those things sell better when a venue is full—no matter how much people pay for tickets.

As I’ve said before, I find it hard to account for LN capo Michael Rapino’s contention that he’s playing on average to 40 percent empty houses. But for the purposes of the argument, let’s stipulate that.

Hmm .. it sems like an almost insoluble economic problem. They have inventory … it’s sitting on a shelf  … and it’s highly perishable—worthless at a minute after showtime.

Whatever can be done?

The article crystalized a feeling that I had several times while watching the hearings on the merger: Why does Live Nation need to merge with Ticketmaster to deal with the alleged broken concert industry?

In this case, why couldn’t it just, you know, sell the farther-back seats for less money?

I mean, I studied Latin, not economics, and I could figure that out. The promoter wants as many bodies as possible in the venue. What do they care how much the tickets are? The artist can do the math, and continue to take 90 percent of the gross. If I’m remembering correctly, Rapino said he made $14 in concessions and the like from each patron in addition to the relatively tiny $4 he made off the tickets. Let’s take those as the truth. Hell, the could give the empty seats away for free and make money.

Waddell notes farther down in the story that some promoters do just that. Why doesn’t Live Nation? As I noted before on the subject of what average capacity LN is operating at, I don’t want to be glib about an industry I don’t work in, but I still think that if all Michael Rapino can do is fill his venues to 60 percent capacity on average, the concert industry isn’t broken, Live Nation’s management is.

Indeed, I recently got an email from someone who added an additional wrinkle: Paraphrased, the point was simply that LN controls too many goddamn venues.

Why are the company’s bookers not putting acts in smaller rooms? Because LN has to keep its own buildings in action, even if they’re too big for the artist in question.

Are these guys squirrelly or what?

In an ideal market, concert promoters would have arms-length relationships with all of the venues in any particular town, so that they could place their shows with as much correspondence to their audience estimates as possible. (There will always be flops and unexpected sellouts, of course, but the promoters ideally would like the tools to place their bets according to their best intelligence.)

Live Nation chose not to do that, instead investing in purchasing lots and lots of huge structures and making management deals for lots and lots more. (And let’s face it, they did that to grab a monopoly control of the industry.)

It turns out that that might not be the best way to run a concert promotion company. Another thing Rapino asked for sympathy for during the hearings was the fact that the real estate market was tanking.

In both cases, why should consumers have to worry about a company that made bad business decisions?

Finally, all that said, I’m not sure if I even buy the premise. One thing Rapino and Azoff never made clear was who exactly was holding a gun to Rapino’s head when he overpays for rock tours in the first place. The only thing I can think of is that a competitor (AEG is really the last one standing) wants a particular show as well. If that’s the case, again, it’s Rapino’s job not to make bad deals.

(And let’s not forget that supermanager Azoff is the guy who spearheaded the move into sky-high tickets and demanding every last dime from promoters.)

As far as I can tell, the position as articulated by Rapino and Azoff in the press and before Congress is that they would like reality to be different for them. They would like the anti-trust laws to be relaxed, they’d like people to stop complaining about high ticket prices and just pay them, they want to sell tickets and scalp them, they’d like AEG to go away and they would like artists to stop asking for so much money.

That last item might be the key one—but more on that next week.

Hitsville live-blogged the Ticketmaster/Live Nation hearings earlier today; here’s the result, put into easier reading order:

_______

Our witnesses today, according to the subcommittee website:

Michael Rapino
President & CEO
Live Nation Worldwide, Inc.
Beverly Hills, CA

Irving Azoff
CEO
Ticketmaster Entertainment, Inc.
West Hollywood, CA

Robert W. Doyle, Jr.
Partner
Doyle, Barlow & Mazard, PLLC
Washington, DC

Peter A. Luukko
President & COO
Comcast-Spectacor
Philadelphia, PA

Luke Froeb
William C. and Margaret W. Oehmig Associate Professor of Management, Owen Graduate School of Management
Vanderbilt University
Nashville, TN

Ed Mierzwinski
Consumer Program Director
U.S. PIRG, the Federation of Public Interest Research Groups
Washington, DC

________

Hitsville is excited. The company leaked early on that big stars like Don Henley, U2 and Jay-Z would be coming out in favor of the merger. Maybe Don Henley, no stranger to the public political arena, will be a surprise guest!

___________

The House link for the webcast seems to be here. I’m checking with C-Span to see if there will be a feed there.

DeRogatis is blogging here.
_________

Bill Pascrell, Jr, a rep. from NJ, is going to testify as well, and then sit on the committee, but won’t ask questions. I assume he just wants to get his face out there on the side of Boss fans everywhere, but I could be wrong.
______

The Chair is Hank Johnson, from Georgia. He doesn’t sound well-disposed to the merger. He is mocking the companies list of artists who are supporting the merger. He says the subcommittee made “monumental” efforts to get artists at the hearing, as one assumes they would!

He’s quoting Springsteen saying the merger would make a bad situation worse.
$500 and $800 Cohen tickets on sale on TicketsNow, with additional $100+ fees, he says, before the tizx went on sale officially.
_________

The ranking member (highest Repub.) is Howard Coble, from South Carolina. “I am not the hippest member on Capitol Hill, he says. He lists TM’s big artists, apologizing for mispronouncing Christina Aguilera’s name. He likes Earl Scruggs and Lyle Lovett.

He’s suspicious. “A lot of sway over the little guy.” He mocks the “convenience charge.” “A lot o consumers would say it’s not convenient.   He says the burden is on the companies to demonstrate the deal isn’t bad for consumers.
Read more

Hilary Rosen will forever be remembered as the hackiest flack of them all–shilling for the record industry during the Great Napster war of 200-2003 as head of the RIAA, demonizing file-sharing and generally taking the most extreme position possible on behalf of an industry that combined avariciousness and stupidity in a way that wouldn’t be seen again until the housing loan debacle that sparked the current financial meltdown.

Rosen was there on the front lines as the industry accomplished the neat trick of holstering up, pulling out its guns, sticking its head in the sand and firing wildly … managing only to shoot itself in the foot. She  was no Jack Valenti: In the years since, as we’ve seen, sales have declined 45 percent, the labels are facing extinction, and it couldn’t have happened to a nicer group of people.

Anyway, since her disastrous years with the RIAA, Rosen has tried to rehabilitate her image by letting it be known that she was a voice inside the organization for accommodation and trying to position herself as a liberal commentator on the cable news networks. Most recently, she’s been calling herself “political director” of the Huffington Post, whatever that means.

And now … she shows her true colors, and will be a “strategy adviser” in DC for the Live Nation/Ticketmaster merger. I just saw my friend Jim DeRogatis talking about it on his blog, but it seems it was first reported by the NY Post. (More detail on her lobbying firm in this WashPo story.)

Is there anything worse than a corporate Democrat? (Wasn’t it one of the South Park boys who said, “I don’t like conservatives, but I really fucking hate liberals”?) Having spent years whispering into the ear of the RIAA as it embarked on its calamitous, destructive and pointless legal war on file-sharing, Rosen’s now going to be brushing lint off the labels of the creepy monopolists as they look innocently into the cameras and skulking around Washington to sneak the merger through a new Democratic administration.

The new Live Nation is shaping up into a real rogues gallery; hard to find the comparison, but it’s a little like Enron merging with Blackwater and bringing on Dick Cheney to run things and Baghdad Bob to lobby Congress.

Live blogging today, this transpired:

[Rep.] Sherman hones in on [Live Nation’s] Rapino on ticketing fees, finally, making him explain where the fees go. “So when I think I’m paying Azoff [metonymy for Ticketmaster’s service charges], I’m paying you?” he asks. “You’re also paying the venue and the artist,” Rapino replies.

It has long been an irritant to me that most people writing about Ticketmaster don’t say where the fees go. Now there’s no excuse. The head of LN and TM have testified before Congress saying that Ticketmaster service fees are kicked back to the venues and artists.

Two issues. One, I should have made clear I was talking about the mainstream press and the music magazines; industry operations like Billboard of course take it as a given.

Secondly, another interesting aspect of this is which artists get the money. Readers know Hitsville never tires of citing a 15-year-old Billboard story in which Aerosmith manager Jack Douglas tells about going to Ticketmaster to lower fees for the band’s tour …

“[Ticketmaster Chief Ned Rosen] said, ‘I’ll tell you what I’ll do. Let’s raise the service charge a dollar, and I’ll split it with you.’…I’m going to sell, literally, 2 million tickets through the Ticketmaster system this year….Here he was at this meeting, trying to fuck fans out of another dollar!”

… which tells you that not every artist is lining up at that trough. Last week, for example, I said that it was hard to believe Bruce Springsteen wasn’t getting part of the $43 in fees accompanying the purchase of a pair of tickets to his upcoming tour. My understanding now is that that was a cheap shot, and that Springsteen doesn’t participate in Ticketmaster kickbacks.

That, in turn brings up the issue of where that money goes. If Springsteen had demanded a cut, would it have jacked the fees up even further? Or is he, in effect, just letting Ticketmaster or a promoter like Live Nation just pocket what could have been his cut?

Like so much of the money involved in this sleazy ongoing story, the amounts involved are mind-boggling.  Springsteen has about fifty dates scheduled right now. Say the average venue is 20,000.

In other words, Ticketmaster, the venues and his promoters will be skimming some $20 million in ticket fees alone off the back of his tour.

Please refresh for updates …..

_________

Things were just getting interesting. Froeb made the point that, in effect, the artist should have control of the whole process and get the true value of the tickets. (That’s Hitsville’s position to, along with a ban on scalping.)

But all of a sudden Sherman said time was up. The hearing’s over. Ended with a bang.

___________

Hard to believe Rapino is happy with these admissions. Avoff: “They go to building holds, sponsor holds, band holds, record company holds. They go out the door multiple places.”

Now we get to the true craziness.

Sherman: Why are you not selling tix for their true value?

Azoff: They are worried about the press. I always say, “That’s the guy who’s getting in for free!”

Hey! He’s talking about me!

Avoff makes a pitch for “dynamic pricing”—that’s auctioning.

__________

Sherman is asking by far the best questions. Now he’s pinning Azoff down on where tickets to a concert go. “Inventory control is not a perfect science,” Azoff says.

That’s an extraordinary euphemism, give Azoff’s replies immediately following:

Sherman: If there’s ten thousand seats in the area, are you selling 10,000 tickets?

Azoff: Never. On average we might see 80 or 85 percent of the seats.

Sherman: Are those the good ones or the bad ones you’re not getting?

Azoff: The vast majority of the best seats in the house.

This is the first time to my knowledge this has been publicly acknowledged by a major person in the music business. It’s the headline of the day.

__________

Sherman jumps on Rapino for saying that the average ticket price of $50 is a deal. Not in San Fernando Valley it’s not, Sherman says.

Here again, he’s picking and choosing his figures. He’s mentioned the 7000 club shows Live Nation puts on; that far outweighs the number of arena shows. Think what the avg. ticket price of them are. $200 and $300 top ticket prices at major shows are common now.

Sherman hones in on Rapino on ticketing fees, finally, making him explain where the fees go. “So when I think I’m paying Azoff I’m paying you?” he asks. “You’re also paying the venue and the artist,” Rapino replies.

It has long been an irritant to me that most people writing about Ticketmaster don’t say where the fees go. Now there’s no excuse. The head of LN and TM have testified before Congress saying that Ticketmaster service fees are kicked back to the venues and artists.

Sherman finally sums up the issue: “So what I think is the Ticketmaster service charge is really a disguised portion of the price. They are forcing Azoff to pretend like he’s charging a lot when it’s really coming back to you.”

_________

Rapino is also playing up the idea that new artists aren’t being created—and that the merger might help that. But of course, the industry has become increasingly consolidated over the last 15 years, which coincides with the alleged dearth of new artists.

He also says he doesn’t hear complaints from consumers about high ticket prices.  Very hard to believe.

He and Azoff also hitting another common refrain: That artists have to charge high ticket prices to cover the costs of their elaborate productions. This is more legerdemain: I don’t care how much the Police, or Madonna, or Neil Diamond, or the Stones, or Pink Floyd spend on their sets. They gross hundreds of millions of dollars on those tours.

As LN keeps testifying, the artists take essentially all of the gate, and then there’s merchandise, tour sponsorships, their kickback from ticketing fees, and the like. The cost of the sets aren’t zero, of course, and it’s expensive to take large entourages on the road. But it’s a pittance compared to the money they are making.

Azoff is referring to “problems of the secondary ticketing process.” He means that he’s not getting that money. That’s what the “problem” is.

__________

Sherman asks Azoff if many of his artists have empty seats in the room. Both Azoff and Rapino play this up big time; Rapino repeats his number that “40 percent of seats go unsold.”

Again, the congressman doesn’t have enough knowledge of the business to say, “Jesus, why is your board keeping you on as head of this company if you don’t know how to place artists in the the right venues? All of your bookers must be entirely incompetent, particularly because, since many shows do sell out, that means many, many other shows have more than 40 percent of the venue unsold.”

I have to confess I don’t understand this figure. I’ve spent a lot of time at concerts, and I’ve always thought the problem is booking acts into too-small venues so sellouts are more likely. Either the industry has changed of late or Rapino is conflating attendance at a broader spectrum of events than he’s letting on—I don’t know, Broadway roadshows or monster truck shows or something. I’d be happy to be proven wrong, but I can’t believe attendance at mid-sized-theater-and-above rock shows is anywhere near that figure.

Even if it were 80 percent that would mean many shows were, say, 60 percent full, and again, it would be hard to believe the company’s bookers could continually make those sorts of deals.

__________

Great question to Rapino: You’ve said said you might have to lay off employees if you don’t merger. If you do merge, you’ve claimed $40 million in efficiencies. Will that come from layoffs?

Rapino says, incredibly, that he didn’t say that, but that he might have to lay people off, but that the merger will create jobs. It hard to take that seriously.

________

The subcommittee is taking a twenty-minute break.

_________

Rep. Brad Sherman, from the San Fernando Valley in California, questions next. Can LN’s ticket agent, CTS, go to AEG and compete with TM? Rapino says yes. Sherman, delightedly, says, well, that would open competition! He seems to be on LN’s side.

He asks Azoff if he will ask his board to sell TicketsNow. He says he will, but hedges mightily. He says “the secondary market really needs cleaning up.”

_________

Coble’s next. He asks a clever direct question of Rapino:  Does Live Nation currently compete with TM, and what will they do if they don’t merge?

Rapino doesn’t really answer the question, though the obvious answers are “yes” and “”will continue to compete.” Coble’s not up enough on the subject to follow up.

The Vanderbilt guy again takes the opportunity to spin for the merger.

To Azoff: Will this improve efficiencies in the industry and will it lead to reduced ticket prices?

Azoff responds in a way that contains about 18 angles of disingenuousness—or lies, if you want to call them that. Example: He says, Gee, if we can increase reselling, then the price of tickets will go down. But reselling, which is his word for scalping, is all about selling tickets at greatly increased prices.

He whines that MTV stopped playing videos. Gee, if only there were some forum on, say, a revolutionary international communications network  that could allow fans to see any artist video they want any time.

Azoff says the company will be like Switzerland. Allow me to quote myself:

Azoff says his management company was “decentralized.” Yeah, right. Readers will I hope have noticed that Hitsville has refrained from making reference to the famous sobriquet attached, many years ago, to Azoff—”the poison dwarf”—on the grounds that it’s an ad hominem attack and that it makes fun of his height. But it’s worth noting that Azoff has a longstanding reputation as a major industry motherfucker, and people who get called things like that generally don’t run “decentralized operations.”

… or “Switzerlands.” I won’t say what they do run.

_____________

Azoff refers to the “old Ticketmaster.” Ha! He explains again about the ticket fees. He stresses credit card fees again. He says that the Pearl Jam debacle had to do with venues refusing to accept lowering the fees.

He says he convinced the Eagles to eliminate fees. But of course the band was one of the pioneers of the extra large service fees; around the time Pearl Jam was risking its career to lower a $5 fee (those were the days), the Eagles were pushing the envelope with $20+ fees.

__________

Rapino says they get zero of the scalping market. It reminds me that earlier he said LN makes $4 on every hundred dollars in tickets. Other reports have said the company loses $4 on every hundred. Not sure which is right.

___________

Rapino admits that Clear Channel had a name as bad as Ticketmaster’s. I would like to take some credit for this:

http://www.salon.com/ent/clear_channel/

____________

The chair starts questioning. He says fans are “forced” to pay exorbitant prices. I think this isn’t quite right. Ticket prices aren’t the issue. It’s the deception and screwing along the way that that’s the problems.

Azoff says the system is broken. It’s not. It’s like a pickpocket being caught. “The system is broken!”

_________

Mierzwinski makes a good point: TM has corrupted the ticketing at publicly owned venues. Why should public bodies help fund venues that are ripping fans off? (My restating of his more politic point.)

_________

Next Ed Mierzwinski, from the U.S. Public Interest Research Group. He says the PIRGs were there back when Pearl Jam fought TM. He notes that Pearl Jam’s experience explains why artists aren’t speaking up against the merger today: Disappointing but not surprising artists aren’t here today.

Bad for consumers, artists and independent promoters, he says. Violates the Clayton Act.

1) TM the dominant player in ticket sales; we thought LN would compete; now they want to merge.

2) A vertical monopoly as well; combined firm would have tremendous market power over artists, venues and consumers.

He says sure that artists might find other places to play: Amer. Legion Hall or county fairground, Doesn’t say an important point: Rock tours are v. complicated these days; in most cities, no place to play, realistically, that isn’ta LN venue.

_________

Next up, Luke Froeb, a Vanderbilt prof and a former govt. lawyer. He’s trying to give a detached view of the economics of the industry. He seems to be discounting the horizontal integration aspects.

Innovation is important, he says, and then makes a very strange argument, that the music industry in in the throes of technological change, and that the merger would allow the companies to innovate better. This would be “crucial” to the economy. I hate to sound glib when talking about a guy who obviously has had a great deal of experience in these matters, but this seems to me to be crazily, almost deliberately, disingenuous. Don’t we want companies to compete to give them the incentive to innovate?

This seems to take an upside-down view of the world. Merged and protected, they won’t innovate. They will just exploit their power.

_______

The guy from Comcast, Peter A. Luukko, is up next. He seems to run the company’s sports teams and its venue management arm.  He says he’s in favor of the merger! He’s speaking in favor of vertical integration; he says it provides for creative cross marketing and “synergistic opportunities.”

The sports integration we’ve seen is different; the sport teams is the draw, and it has a right to market itself as it sees fit. Also, there are hundreds of thousands, if not millions, of 76er’s, say, seats available each year. In one town, by contrast, there are only, say, 30K Springsteen seats available in a certain year, creating much more opportunities for abuse.

_________

Next up, a lawyer from DC, I assume an antitrust guy named Robert Doyle. He says merger will eliminate competition in ticketing, reduce competition in reselling, reduce competition in top-tier artist management, and reduce competition in concert promotion industry.

He gives a pretty precise recapitulation of some of the corporate moves the companies were making against each other and points out that they are in effect each eliminating each other’s biggest potential competitor.

He says he’s been doing interviews with venues and says they are afraid of a combined TM/LV.

_________

Azoff says AEG has told TM it feels it can terminate its venue agreements if the merger goes through.

__________

I don’t know if any of the Reps will jump on this, but Azoff just said, “We’re in the service business; if our customers don’t like it they will go somewhere else.” But that’s of course the point. They can’t go anywhere else. 

__________

He says many requests could not be filled for the Bruce shows. They modded their credit card software and it couldn’t handle the demand, resulting in frozen transactions and error pages.

No consumers were directed to TicketsNow from error pages, he said.

This brings up an interesting, unanswered question from that incident. I’ve read all the complaints and I have to say it’s unclear as to whether it’s actually true fans were “redirected” to the scalping site. I think that they instead all hit a button on the page that took them there, but the button didn’t say, “Hey, we’re taking you to our rapacious scalping site.”

TM also sent a note out saying the tickets went on sale at 10 a.m., though it really started at 9. That note also had a link to TicketsNow, he said and confused consumers who ended up there. He says he’s taking the TicketsNow links off their site.

________

Azoff up next.

He says TM gets the complaints when someone gets hurt in a mosh pit. I think that’s a dumb thing to bring up—LN will definitely be responsible when someone gets hurt in a mosh pit.

He says he’s going to explain the Springsteen imbroglio in detail.

_________

With a straight face, Rapino says LN found it easy to get into the ticketing business. That’s like saying Haliburton found it easy to get into the Iraq contracting business. The problem is that if you don’t control hundreds of venues across the country, you can’t break into the business.

Front row tix, he says, might cost $150. Is he joking? Most floor seats, sometimes most of all the seats, are higher than that at many shows.

________

Of the witnesses, it will be interesting to hear Peter A. Luukko: he runs all the sports teams and sports venues in Philadelphia. Not sure what his position is going to be.

Rapino’s going to talk first. Let’s see if they learned anything on Tuesday. He’s going to cite some facts: 17,000 employees: 35 percent market share. Market cap $250M; $700M in debt. We have no large shareholder. 7000 concerts for “young artists” where we lose $10M to $20M.

Highly competitive marketplace. 4 percent margin business.  Competitor AEG, owned by a multibillionaire! 31st richest man in America; they promoted five of top ten concerts last year; LN did four. They are the true integrated companies. He says that AEG’s Staple Center is worth more than LN and TM combined. (The companies have lost 70 percent of their value the last few years.)

Not sure right now, but I think Rapino is choosing his words carefully: Top five concerts ($2M to $3 grosses) is different from top five tours ($200M to $200M grosses!).

Rapino says they have “relentless” competition. Own 18, lease 70 venues, he says. A small percentage.

_____

The chairman recalls being down one day and going to a Parliament-Funkadelic concert—he notes that Coble probably wasn’t familiar with them. Pascrell sites Bruce Springsteen’s “Promised Land.”

_______

Smith says he thinks TM should sell TicketsNow. He says he has legislation to ban automatedticket-buying programs, too.

_______

Smith is there to jump on the Springsteen issue. He says he got 1000 complaints about the imbroglio. He’s jumping on a quote he says he saw from a LN source, that the hearings were a “distraction.” He kicks that one around the ring a while.

“This isn’t just live PR—it’s a bad deal for the American people! … You don’t have to have a Ph.D in economics to see it for what it is.”

________

I can’t find a WSJ live-blog of the hearings… please let me know if anyone finds it.

_________

Rep. Lamar Smith, from Texas, zeroes in on the vertical integration issue. He’s not a supporter.

_________

The ranking member (highest Repub.) is Howard Coble, from South Carolina. “I am not the hippest member on Capitol Hill, he says. He lists TM’s big artists, apologizing for mispronouncing Christina Aguilera’s name. He likes Earl Scruggs and Lyle Lovett.

He’s suspicious. “A lot of sway over the little guy.” He mocks the “convenience charge.” “A lot o consumers would say it’s not convenient.   He says the burden is on the companies to demonstrate the deal isn’t bad for onsumers.

______

The Chair is Hank Johnson, from Georgia. He doesn’t sound well-disposed to the merger. He is mocking the companies list of artists who are supporting the merger. He says the subcommittee made “monumental” efforts to get artists at the hearing, as one assumes they would!

He’s quoting Springsteen saying the merger would make a bad situation worse.
$500 and $800 Cohen tickets on sale on TicketsNow, with additional $100+ fees, he says, before the tizx went on sale officially.

_________

Bill Pascrell, Jr, a rep. from NJ, is going to testify as well, and then sit on the committee, but won’t ask questions. I assume he just wants to get his face out there on the side of Boss fans everywhere, but I could be wrong.

___________

The House link for the webcast seems to be here. I’m checking with C-Span to see if there will be a feed there.

DeRogatis is blogging here.

________

Hitsville is excited. The company leaked early on that big stars like Don Henley, U2 and Jay-Z would be coming out in favor of the merger. Maybe Don Henley, no stranger to the public political arena, will be a surprise guest!

_________

Our witnesses today, according to the subcommittee website:

Michael Rapino
President & CEO
Live Nation Worldwide, Inc.
Beverly Hills, CA

Irving Azoff
CEO
Ticketmaster Entertainment, Inc.
West Hollywood, CA

Robert W. Doyle, Jr.
Partner
Doyle, Barlow & Mazard, PLLC
Washington, DC

Peter A. Luukko
President & COO
Comcast-Spectacor
Philadelphia, PA

Luke Froeb
William C. and Margaret W. Oehmig Associate Professor of Management, Owen Graduate School of Management
Vanderbilt University
Nashville, TN

Ed Mierzwinski
Consumer Program Director
U.S. PIRG, the Federation of Public Interest Research Groups
Washington, DC

Hitsville’s coverage of the Senate hearings Tuesday is here.

___________

Previously in Hitsville:
Live-blogging the House hearings on the Ticketmaster/Live Nation Merger
“Re”-selling tickets that don’t yet exist
Liveblogging the Senate’s Ticketmaster/Live Nation Merger hearings
Seal & Van Halen in Azoff’s corner!
Updated! 26 questions that should be asked at the Ticketmaster/Live Nation merger hearings tomorrow Ticketmaster shareholders sue to stop merger
How Live Nation does business
Will the Live Nation/Ticketmaster merger mean higher concert prices?
Another suit against Ticketmaster
Constantly updated: The Ticketmaster-Live-Nation unholy-matrimony news round-up!
Five arguments against the Live Nation/Ticketmaster merger
Irving Azoff kicks it old school
The music industry’s Putin
Bad merger coverage
WWBD (What would Bono do?)
Billboard’s analysis of the Ticketmaster/Live Nation merger
Springsteen and Landau bash Ticketmaster and Live Nation!
P.S. on Ticketmaster: A case study, starring Bruce Springsteen
Why the potential Live Nation-Ticketmaster merger is a very bad idea
Is Ticketmaster trying to muddle the fees issue?
The Azoff-Ticketmaster deal: Bad news for concert-goers—and the music industry
Why you so seldom read about obscene Ticketmaster-style ticketing charges

A judiciary subcommittee meets at 10 a.m. EST; schedule and webcast here.

Witness list here; members of the subcommittee here.

While checking out coverage of the Ticketmaster-Live Nation merger hearing, I noticed a post on RollingStone.com on the proceedings.

You might think Rolling Stone, being a magazine that covers music, might take enough interest in the formation of the most powerful entity the music business has ever seen to tell one of its minions to actually watch the proceedings.

Instead, they just had a writer, Daniel Kreps, rewrite Jim DeRogatis’ coverage from the Chicago Sun-Times.

Now, every blogger links to the work of real reporters, and many quote from it, some too much. And Kreps attributed one fact to the ST high up in his post.

But he didn’t make clear that his entire post was based on someone else’s work. DeRogatis’ story totalled 480 words; the RS one was two-thirds that. The writer didn’t block-quote from the earlier story blogger-style. He just rewrote it, and it looked like it was a real Rolling Stone piece.  There was barely a phrase of the total not either directly taken from the Sun-Times’ piece or blandly rewritten:

DeRogatis:

Rapino cited the benefits of Live Nation shows to local economies, claiming that one two-day event last summer at the Alpine Valley Music Theatre in East Troy, Wisc., pumped $5 million into the area. He did not name the artist.

RS:

Rapino and Ticketmaster’s Irving Azoff told the subcommittee that their concerts would help give an economic boost to cities, citing a two-day event Live Nation hosted in East Troy, Wisconsin that generated $5 million in revenues for the city.

DeRogatis:

All of the senators voiced strong skepticism about the merger — including traditional foes Orrin Hatch (R-Utah, and himself an amateur recording artist) and Charles Schumer (D-N.Y., and a Bruce Springsteen fan outraged by Ticketmaster’s handling of the upcoming tour) […] The hearing ended with Chairman Herb Kohl (D-Wisc.) noting that the committee has urged the Justice Department “to examine [the merger] closely” before granting its approval.

RS:

The subcommittee, stacked with senators like Orrin Hatch and Chuck Schumer who were already against the merger, will tell the Department of Justice to “examine the merger closely” before deciding whether to approve it.

It’s not plagiarism; he cited the ST. It’s just lazy, cheap journalism from a place that doesn’t expend enough of its resources on reporting on the industry at the heart of its appeal.

p.s.: DeRogatis, of course, used to be one of the mag’s top music editors. Funny story–ask him to tell you about it.

___________

Previously in Hitsville:
Live-blogging the House hearings on the Ticketmaster/Live Nation Merger
“Re”-selling tickets that don’t yet exist
Liveblogging the Senate’s Ticketmaster/Live Nation Merger hearings
Seal & Van Halen in Azoff’s corner!
Updated! 26 questions that should be asked at the Ticketmaster/Live Nation merger hearings tomorrow Ticketmaster shareholders sue to stop merger
How Live Nation does business
Will the Live Nation/Ticketmaster merger mean higher concert prices?
Another suit against Ticketmaster
Constantly updated: The Ticketmaster-Live-Nation unholy-matrimony news round-up!
Five arguments against the Live Nation/Ticketmaster merger
Irving Azoff kicks it old school
The music industry’s Putin
Bad merger coverage
WWBD (What would Bono do?)
Billboard’s analysis of the Ticketmaster/Live Nation merger
Springsteen and Landau bash Ticketmaster and Live Nation!
P.S. on Ticketmaster: A case study, starring Bruce Springsteen
Why the potential Live Nation-Ticketmaster merger is a very bad idea
Is Ticketmaster trying to muddle the fees issue?
The Azoff-Ticketmaster deal: Bad news for concert-goers—and the music industry
Why you so seldom read about obscene Ticketmaster-style ticketing charges

Good reporting from Randy Lewis on the LAT’s Pop & Hiss blog about the trouble Ticketmaster is going to have living up to its new way of doing business, after that agreement with the NJ AG. (More details on that here.)

It’s about how there were tix to a No Doubt show in LA on sale on TM’s scalping service, TicketsNow, before there were any on sale to the general public:

On the same day that Live Nation announced that tickets would be put on sale March 7 for No Doubt’s Irvine concerts, TicketsNow.com already listed 57 tickets for those shows for sale for prices ranging from $70 to $854 (screenshot at left). That was also more than 24 hours before presale tickets would be offered to members of the group’s Tour Club. (One of TicketsNow.com’s competitors, StubHub.com, also shows ticket listings for those No Doubt shows with prices running from $76 to $342.)

The reselling issue is one of those things that captures the hydra-headed problem the ticketing industry is. Here are a few of the issues involved, starting with the merely irritating and going upwards in sleaziness:

1) People who get early tix through corporate tie-ins (American Express, tour sponsors).

2) Quote unquote regular scalpers posting early on the scalping sites offering tickets they expect to get quote-unquote legitimately when the sale comes on line. (In practice, they are also using computer programs, hiring a phalanx of people to work the phones to buy tix for them, or suborning employees at places that physically sell tickets.)

3) Bands selling tickets on their own, whether through fan clubs or just taking their contracted allotment and scalping them for several times the cover price.*

4) Promoters or venue-controllers going freelance. (I don’t know how skyboxes and such work, but I’d assume that holders of them have tickets at their disposal as well.)

5)  Promoters and venue controllers taking tickets that are supposed to go on sale at the cover ticket price but scalping them instead.

This last is something Irving Azoff committed not to do. Would have been nice if one of the senators had asked him bluntly whether TM did that now.

Those are just the aspects of “pre-selling” in the “re”-selling market. That most of them aren’t even sold in the first place shows how silly the “reselling” appellation is: We should just call it what it is, which is scalping.

* I’m not sure I understand this. If the band gets fifty tickets per show, sold at a $100 premium, times twenty shows–that’s $100,000. Not really that much to an arena act. On the other hand, if it’s 100 good seats per show, sold at a $200 premium (and by the way, note the $854 price mentioned above), over 50 shows–that’s $1 million. And worth the effort.

refresh for updates …

And… it’s over. Hitsville’s complete Ticketmaster/Live Nation coverage is here.

_________

Hurwitz’ final statement: The play here is control.

_________

Key question: Could a major act, Bruce Springsteen, say, do a big tour without using Live Nation or Ticketmaster?

Michelson says no, on the amphitheater level, he couldn’t; indoor arenas, “I suppose.”

Ticketmaster, however, he notes, would be an impediment on that level.

__________

Mickelson is finally fed up with the LN line, particularly the contention that it only has 38 percent of the business.

His summation is the highpoint of the hearing thus far.

Mickelson quotes Pollstar: In 2000, the company had 150 of top 200 tours. In 2001, after Live Nation combined with SFX, it had 161 of the  top 200 tours.

He’s just getting going: “They dominate the arena level. They control and have all of the outdoor amphitheaters. They own 90 percent of the amphitheater market.” And with House of Blues [an LN subsidiary], they are taking over the lower-level theater business as well.

TM, he says, has contracts with 90 of the top 50 buildings, 80 percent of top 100 arenas.

______

Rapino says he could establish a firewall to stop TM from passing on info to LN. That’s a comical assertion.

Rapino is forced to concede he got out of competing with Ticketmaster. Why would anyone else try to compete?, he is asked.  He dissembles and changes the subject.

He tries to say ticketing  a “low barrier” business to get into.

________

Hurwitz and Mickelson both point out that if the companies merge, he and other indie promoters would have to share all sorts of sensitive information with the behemoth—tickets sold, customer contact info and so forth. And they will make money on every ticket of his they sell, he points out.

Balto is smarter on these issues than anyone else there. “If vertical integration is necessary,” he says, “let them do it on their own. That’s the purpose of the anti-trust laws.”

________

Mickelson smacks Rapino down for saying acts can call around to other promoters. “U2 doesn’t call us. Shakira doesn’t call us. Coldplay doesn’t call us.”

______

In fairness, there is something to Rapino’s point. The problem is that all these other parasitical companies are trying to make a buck on the backs of the artists.

__________

Klobuchar zeroes in how the companies are refraining from competing; the next step, she notes, is figuring out how difficult it will be or a new competitor to emerge. Ticketmaster’s long-term contracts, funded by kickbacks from fees, make that difficult. Balto, channeling Hitsville, says the “technology involved is not rocket science.”

Rapino points out that the true monopoly is the artist. “There is only one Aerosmith.” This is true in the physical but not aesthetic sense. Me, I stopped paying attention to Aerosmith when they hired Diane Warren to write songs for them, but whatever.

______

Klobuchar is now going after Azoff, pressing him to admit that previous mergers haven’t lowered ticket fees. Azoff is now saying Ticketmaster “took the heat” for the big fees, which it got a “minority part” of. Where’d the rest go? “Credit card fees” (!) Then he mentions “rebates” to the venues, “sometimes to the artists, sometimes to the promoters.” Those are actually kickbacks. 

________

A new euphemism for auction sales. “I would hope for a more transparent accurate primary, which wold do away with the need for secondary,” Azoff says. He’s saying he’d like a pure auction sale.

__________

Azoff says the “practice” of routing people to the resale site was “a practice I was going to do away with.” That’s not very credible.

Schumer wants a detailed explanation of how the Springsteen imbroglio happened, but doesn’t want Azoff to waste all of his questioning time. He wants it all in writing. “It’s under oath,” he reminds him.

Schumer wants Azoff to say that he should sell TicketsNow, the scalping site. Azoff is dissembling. He says he was asking around at the company why they got into the biz. The picture of himself as a wide-eyed new employee is kind of amusing.

Schumer doesn’t ask the obvious question: If the new company is losing money on tickets, it’s going to go where it can make more money—and where else but the reselling sites?

Schumer keeps cutting Azoff off, though. What’s his position on Tickets now? “I never would have bought it. I don’t have a position now,” Azoff replies.

Are you open to sell it? “You can make an offer, senator.”

____________

Schumer’s hammering Azoff on how the company patently makes more money reselling a ticket than selling it; Schumer keeps saying it’s $30 vs. $7. Azoff keeps demurring. Schumer says he wants an answer in writing.

As I noted in my list of questions yesterday, this would be a good time to say:

It’s hard to remember? Again, forgive me for quoting “Hit Men” again, but one person quoted there saying “He had total retention on every level.” Another is quoted as saying “Irving is as fast mentally as it gets.”

___________

C-Span is broadcasting the hearing as well, BTW:

http://www.c-span.org/Watch/C-SPAN3_rm.aspx

_________

Now Schumer is going after Azoff on the Springsteen issue.

———

Wow– more interesting facts. Rapino says he makes $14 per person on “ancillary.” Food, parking, merchandise, I guess. He says he loses $80M a year on tickets—or about 4 percent, as he says. That’s in keeping with other reporting I’ve seen.

He blames it all on the 18 wheelers the artists use. That’s bullshit. The artists make hundreds of millions on these tours.

____

Third lie: “Every entertainer I represent would like to charge less for tickets.” (Azoff.)

________

Sobering info about Jam: yearly shows down from 135 to 30.

________

Kohl says, You didn’t address the question at all. “I’m disturbed by your unwillingness to discuss the main reason for the merger.” (He means makes more money.)

_________

Azoff opens his mouth … and lies as well. “We are actually complimentary businesses.” “Plenty of competition out there.”

________

Kohl: What’s wrong with competition? You strain our common sense!

Rapino … lies. Says there’s a lot of competition. Cites Chicago—where he’s been trying to put Jam out of business

————

David Balto next. “I have a simple message. TM has kept its monopoly power not through better products and services but exclusionary arrangements to exclude its rivals.” Now, faced with a rival, it’s trying to merge with it.

There’s a competitively unhealthy market, he say. Wha’s needed:  1) Investigate the Springsteen incident 2) Look at past Ticketmaster aquisitions; 3) the key to the monopoly power; TM’s exclusivity agreements.

—————–

Hurwitz is magnificent; he’s giving a short history of the modern concert industry. He points out that Don Henley used to be opposed to Clear Channel! He’s trenchant and persuasive; he points out it’s the promoters’ fault. They tout the higher ticket prices as growth and hide losses as “investment.”

“When do they get told to stop? You can’t blame Live Nation at this point any more than you can blame a shark for eating people.”

He points out that a new ticket service would be an expensive proposition.

A great five minutes. This guy’s a star.

———-

Nice to see Jerry Mickelson; he’s a fighter and has been for decades. Jam has been grimly fighting off Live Nation for years.  “The new company has the ability to strengthen its hold on the entire industry.”

It will “suppress or eliminate competition” in every aspect of the music industry. “Vertical integration on steroids.” “A poster child of why this nation wants and needs antitrust laws.”

———-

Azoff is avoiding the particulars of the Springsteen imbroglio; he says there was a ticket malfunction “combined with the availability” of his reselling operation. I have to say, it hasn’t been established that TM actually *drove* fans to the reseller. It could be they just clicked on the (obfuscatory) button that said tix were available.

He’s the voice of doom as well.

————-

Azoff! He says he saw the Beatles at Comiskey Park. He says he serves artists and their fans. He headed west, he says, with Dan Fogelberg and REO Speedwagon.

———

Amid a litany of woes, he says 40 percent of his seats go unsold. I hope a senator asks him why that doesn’t mean he runs a very inefficient company.

————-

I love music, love artists; saw Prince in Minneapolis, he says. It’s a decentralized business. “Local entrepreneurs.” He’s playing the “we supply countless jobs” card.

The decentralization contention is risible; this used to be called Clear Channel. He’s whining about the company’s stock price. He says he needs to merge, basically, to save the company.

“The record business is broken,” he says.

———–

Now it’s Minn. Sen. Amy Klobuchar namechecks Prince and Bob Dylan; she’s not a fan of the merger eitheMinn. Sen. Amy Klobuchar. She namechecks Prince and Bob Dylan; she’s not a fan of the merger either. Now they are swearing in the witnesses.

Rapino gets five minutes.

————–

Orrin Hatch to speak first– this will be a key sign of how deep the Republicans will be in LN’s pocket. He’s babbling about football now. He rambles on a bit… sounds suspicious of the merger but oesn’t show his hand.

———–

Rapino and Azoff are about to talk.

Apropos of nothing, I just thought about how Azoff said last week the merger would make for a “more level playing field.” I guess he meant “level” in the Carthanginan sense.

—————

Kohl is bashing them hard: “The burden will be on TM& LN”

Schumer is up next. He thanks Kohl. He says he made it clear to Azoff and Rapino in his office that morning he was against the merger.

TM took advantage of its reselling operation to charges many times the tickets’ value, he said. It’s more about “money-making rather than malfunction.” He wants specific answer as to how it happened. He says he doesn’t think the company should be in that business at all.

———–

Herbert Kohl, senator from Wisconsin, is speaking.

Great facts:

LM: Owns or operates 140 venues, 30 music festivals, 305 large arenas; plus deals with U2, Madonna, Jonas Bros.

TM: “nation’s dominant ticket seller”: 280 million tickets, $8.3 billion in ticket sales last year… 77 of the 100 largest venues.

Front Line: 200 artists

Kohl: “One company with a stranglehold on all aspects of the concert business.”

———

It’s underway.

———

They are scheduled to start at 2:30 EST; the live webcast stream seems to be working.

Jim DeRogatis has some good information here.

The witnesses listed include Irving Azoff and Michael Rapino, who have yet-be-be-clarified positions at the top of the new company; Jerry Mickelson, head of Jam Productions, an independent outfit that has been fighting off Live Nation and its predecessors for more than a decade; David A. Balto, a senior fellow at the Center for American Progress in DC; and the just-added Seth Hurwitz, one of the owners of DC’s legendary 9:30 Club. I assume the last three will all speak against the merger, but I don’t know for sure about Hurwitz.

Remember how some unnamed Live Nation and Ticketmaster officials were telling the WSJ that big big names like Don Henley, Jay-Z and U2 were going to be supporting the big big merger?

That graf dropped out of the paper’s story quickly (and mysterously!), and those three artists have been conspicuously silent—and in Henley’s case, unusually so. Who has Henley muzzled? 

Now comes some big news: Seal, Van Halen and Shakira are behind the merger, Reuters is reporting:

Live Nation Inc’s (LYV.N) planned acquisition of Ticketmaster Entertainment Inc (TKTM.O) has received support from rock stars including Van Halen, Seal and Shakira ahead of a U.S. antitrust hearing on Tuesday.

The companies said they have received supportive letters and emails from these artists, even as others including Bruce Springsteen and Senator Charles Schumer have opposed a combination of the world’s biggest concert promoter and largest ticketing company.

The story includes this tidbit:

Rapino said fans are frustrated with the lack of transparency in ticket sales that lead to scalpers and resellers charging exorbitant prices for the best seats.

But does not include what you think would be the logical next sentence, which I’ll supply:

But critics of the merger say that the heart of the new company’s plan is to have Rapino and Co. collect those exorbitant prices themselves.

Hitsville is live-blogging the hearings here.

Irving Azoff, the supermanager and CEO of Ticketmaster, and Michael Rapino, for now capo di tutti capi of Live Nation, will be in attendance.

Following, a few issues the senators should address; any I missed?

(Hitsville’s complete coverage of the merger is here.)

1) A few questions about Ticketmaster. A typical $100 rock show might carry with it a collection of service fees reaching $20 or $30 or more. Where does the money go? How much, typically, goes back to the artist? How much to the promoter? How much to the venues? If you can’t generalize, give me specifics from one or two recent tours.

2) Now, aside from routing back specific fees from specific shows to a venue, how much a year does Ticketmaster spend arranging long-term deals with venues? How are they generally configured? Is it a lump sum, or an annual fee? Are there other considerations? What is a typical payment to, say, a basketball arena?

3) Now, don’t these long-term deals restrict competition? In other words, aren’t you in effect forcing people to pay money for fees, which you then use to tie up venues, which prevents competitors entering the business and helping to lower those fees?

4) By which I mean, far from letting you merge with an even more powerful company, shouldn’t we break up the monopoly you already seem to be guarding so jealously?

5)  How much does it cost to actually sell a concert ticket? By which I mean, leaving aside the payments to venues, promoters and artists, what is your company’s net cost per ticket sold? Read more

The words “Irving Azoff” haven’t appeared in the Times for at least the past week. He’s no Katie Couric!

Nor the LAT.

Sure, it’s weird, how the Wall Street Journal’s profile of Irving Azoff starts off with the once and future most powerful man in the record business sitting in an “armchair” in his “spacious Beverly Hills bathroom” with no further explanation.

Isn’t this weirder, though?

Mr. Azoff’s proposed merger would concentrate power in the music industry like never before. It could also occasionally put him in direct conflict across the negotiating table — with himself.

If Live Nation merges with Ticketmaster, the new company will be both artist manager and concert promoter, two sides whose interests don’t always align. A musician’s manager wants to squeeze the most money possible out of a concert promoter, and this has been Mr. Azoff’s role through his Front Line Management firm, which is part of Ticketmaster. A concert promoter such as Live Nation, which shoulders the risk of financing a tour, has the opposite motivation.

The story goes on to report on today’s hearing about the antitrust implications of the merger; but this is a different issue, right? The inherent conflict of interest at the heart of the deal, and the difficulties a non-Jay-Z-level artist might have in trying to assert his or her rights. (I mean, what are they going to do? Fire Azoff as their agent, and have the biggest entity by far in the business pissed off at them?)

The story lets someone else make the charge, and lets Azoff answer it:

Mr. Azoff, 61 years old, says his loyalties haven’t changed. “The artist’s interests always come first,” he said in a recent interview.

But that’s weird, too, because his duty is to his shareholders. If you own stock in Live Nation, do you want Azoff looking out for Don Henley?

As far as rising ticket prices, we see Azoff say the deal with all for “more efficient pricing.” Hitsville has noted the tendency in the digital world for the terms “attractive” and “flexible” in this context to mean “higher.” Live Nation’s euphemism, it seems will be “efficient.”

(Of course, seen one way, it is more efficient. Higher prices means that the money fans hand over to artists and corporate behemoths like Live Nation will indeed be coming into them more quickly and in larger quantities.)

One other question: The story says the Eagles could have made as much as $50 million from the Wal-Mart deal Azoff brokered for them for Long Road out of Eden. Interesting, if true. (The record sold three million and change, at $12. If this isn’t a big mistake, isn’t that one of the craziest loss-leaders of all time? Was Wal-Mart giving the Eagles a $15 per CD royalty?)

Will be live-tweeting there, live-blogging here, on the Ticketmaster/Live Nation hearings tomorrow, assuming the promised web feed materializes.

Ticketmaster has settled with the New Jersey Attorney General’s office after the Great Bruce Springsteen Reselling Ticket Imbroglio of 2009. Here’s what the complaining people get:

The settlement creates a random drawing for 1,000 consumers who filed complaints against Ticketmaster with the Division of Consumer Affairs as of last Tuesday, February 17th, to purchase two tickets each to one of the two concerts scheduled for May 21st and May 23rd at the Izod Center.

In addition, those consumers who filed complaints but are not chosen in the random drawing for the opportunity to purchase tickets to the May concerts will be given a $100 Ticketmaster gift certificate and will be given the opportunity to purchase two tickets to a future Springsteen concert in New Jersey prior to a general ticket sale.

It doesn’t say what sort of tix the folks are getting. The show seems to be sold out, though, so one would assume the company has had to cough up some of the decent seats it was holding back and presumably was going to scalp.

More importantly, the company is paying the state $350,000 and has agreed to limitations on how it links to its scalping operation for at least a year. The release (reprinted below) says that it will have to get the AG’s office’s permission before it does it.

It’s pretty clear that the NJ AG didn’t have the heart to address the real issue, which is Live Nation’s owning a resale operation in the first place.  Jay Hancock, of the Baltimore Sun, has his own complaint, stemming from the link restrictions:

[T]he link ban applies to only one kind of page on the Ticketmaster site, the “no tickets found,” page that comes up after you search in vain. Sounds like there is plenty of room for other links from Ticketmaster to TicketsNow, and people are still going to be confused.

The link, I notice, is already gone from the page to the Springsteen show that caused all the problems.*

The complete release:

Attorney General Announces Settlement with Ticketmaster on Sale of Springsteen Tickets
Tickets will be made available for thousands of consumers shut out by Ticketmaster and steered to a more expensive ticket re-sale website

Attorney General Anne Milgram announced today a settlement with Ticketmaster to resolve more than two thousand complaints filed by consumers with the State Division of Consumer Affairs this month in connection with the sale of tickets to Bruce Springsteen and the E Street Band concerts scheduled for May at the Izod Center in the Meadowlands in East Rutherford, New Jersey. The agreement also mandates reforms to Ticketmaster’s business practices.

The settlement creates a random drawing for 1,000 consumers who filed complaints against Ticketmaster with the Division of Consumer Affairs as of last Tuesday, February 17th, to purchase two tickets each to one of the two concerts scheduled for May 21st and May 23rd at the Izod Center.

In addition, those consumers who filed complaints but are not chosen in the random drawing for the opportunity to purchase tickets to the May concerts will be given a $100 Ticketmaster gift certificate and will be given the opportunity to purchase two tickets to a future Springsteen concert in New Jersey prior to a general ticket sale.

For those consumers identified by the state and Ticketmaster whose credit cards were charged for ticket purchases but the transactions were never completed because of technical problems, Ticketmaster agreed to complete the transaction and provide consumers with the tickets.

For those consumers identified by the state and Ticketmaster who within the first five hours that tickets went on sale went from the “No Tickets Found” page of Ticketmaster’s primary website to Ticketmaster’s wholly-owned subsidiary TicketsNow.Com and purchased tickets at a higher price, Ticketmaster agreed to refund the difference between the purchase price and the face value of the tickets.

The settlement, known formally as an Assurance of Voluntary Compliance, places a wall between Ticketmaster and its ticket re-selling subsidiary TicketsNow.com for at least a year for all shows and entertainment events Ticketmaster handles. After the conclusion of the year, Ticketmaster will need prior approval from the Attorney General for any links between its “No Tickets Found” Internet page to its TicketsNow re-sale website.

Ticketmaster agreed not to engage in paid Internet search advertising that would lead consumers searching for “Ticketmaster” on Internet search engines to its TicketsNow re-sale site. In addition, Ticketmaster confirmed and agreed that all tickets it receives for sale to the general public will be sold on its primary market website. Ticketmaster also agreed not to allow the sale or offer of sale of any tickets on the TicketsNow.com re-selling website until the initial sale begins on its primary website.

“This settlement swiftly and fairly resolves a significant issue for thousands of loyal Springsteen fans in the Garden State who believe that Ticketmaster tilted the playing field against their efforts to purchase tickets to the May concerts,’’ Attorney General Milgram said. “Everyone deserves an equal chance to buy tickets on a primary ticket selling website and shouldn’t be steered to a re-selling website where the prices can be substantially higher.”

“Because of the excellent cooperation of the New Jersey Sports and Exposition Authority, the agreement will make tickets available for many of those who filed complaints with the Division of Consumer Affairs as of last week,” Milgram added. “I also want to thank Bruce Springsteen and his management in our efforts to hammer out this agreement. He was as outraged as anyone over the circumstances surrounding the sale of tickets to his concerts.”

“Significantly, Ticketmaster has agreed to change its business practices and not allow any link from its No Tickets Found Internet page to re-sale Internet sites for at least one year, and after that any proposed linkage will not be permitted unless approved by my office,” she said.

Dennis Robinson, president and chief executive officer of the New Jersey Sports and Exposition Authority, said, “On behalf of our Chairman, Commissioners and staff whose dedication to customer service have made the IZOD Center one of the world’s most successful concert venues, we deeply appreciate the Attorney General’s commitment to bringing about a solution to the issue which occurred with these ticket sales.’’

The 2,000 tickets – 1,000 tickets for each show – are being made available for purchase through the random drawing by the New Jersey Sports and Exposition Authority. All Ticketmaster fees and service charges will be waived.

An investigation by the Attorney General and the Division of Consumer Affairs into Ticketmaster’s sales practices began with the immediate uproar over the sale of Springsteen tickets when they were made available for sale on Feb. 2. The Division of Consumer Affairs created a link on its website to receive complaints. As of Tuesday, Feb. 17, approximately 2,200 complaints were filed concerning the Springsteen concerts. Complaints filed by 5 p.m. Tuesday, Feb. 17, will be covered by the agreement.

Consumers complained that sales were blocked on the Ticketmaster website and they were re-directed to the ticket re-selling website called TicketsNow.com where tickets were available at substantially higher prices.

The state receives a settlement of $350,000 to cover investigative, attorney and administrative fees and to support New Jersey consumer protection initiatives.

# # #

* If you’re keeping a list of irritating things Ticketmaster does, there’s this communication on that page:

Tickets Not Available
Tickets are currently not available online for one of the following reasons. Please check back for availability.

• Tickets may not be on sale yet
• Tickets may not be available at this time. More tickets may become available later
• Tickets may not be available online just hours before an event occurs
• On rare occasions, tickets may only be available at ticket outlets or the box office

Can’t they just say which applies to that show? And in this case, can’t they just say the show is sold out?

The ticketing system is unavailable due to routine maintenance.

… will be webcast tomorrow from a Senate web site, Jim DeRogatis reports.

The antitrust division of the U.S. Department of Justice will hold its first hearing on the proposed merger of the controversial ticket broker Ticketmaster with the giant national concert promoter Live Nation tomorrow, and the scheduled witnesses include Jerry Mickelson, co-founder of Chicago-based Jam Productions, one of the largest of America’s few remaining indie promoters.

Jam and Live Nation have been involved in a years-long range war, ever since the Chicago outfit refused to be rolled up in the massive industry consolidation in the 1990s.

Though it is now in the minority among major U.S. cities, Chicago remains a deeply competitive market for live music, with Jam and Live Nation often vying for major arena shows, and Jam maintaining a firm grip here on smaller theater gigs. In 2005, Jam won a $90 million verdict against Live Nation in a highly publicized anti-trust suit after testimony that included executives at the larger company boasting that they’d love to “crush, kill and destroy” the regional promoter.

And stars? You want stars?

Also scheduled to testify in Washington, D.C. are Irving Azoff and Michael Rapino, the Ticketmaster and Live Nation executives set to become the reigning braintrust at the new Live Nation Entertainment, and David A. Balto, senior fellow at the Center for American Progress, a self-described “think tank dedicated to improving the lives of Americans through ideas and action, combining bold policy ideas to help shape the national debate to expose the hollowness of conservative governing philosophies.”

DeRogatis says the show starts at 2:30 EST and will be webcast here.

Hitsville will be live blogging.

For your pleasure on awards weekend, a list of quotes I collected for an Oscar party invite a few years back:

“In the mythology of the cinema, the Oscar is the supreme prize.”
– Federico Fellini

“It’s the intellectual rutting season, a thoroughly awful and debasing time.”
– Dalton Trumbo

“If you win, by the end of May it’s not such a big deal. If you don’t win, it’s not such a big deal either.”
– Billy Wilder

“You can’t eat awards-nor, more to the point, drink ‘em.”
– John Wayne

“I don’t care about the Oscars. I make movies to support the causes I believe in, not for any honors.”
– Jane Fonda

“If you have no hope of getting one, they’re very despised. But if you have, then they’re very important.”
– David Lean

“Prizes are nothing. My prize is my work.”
– Katherine Hepburn

“If you’re lucky enough to win an Oscar, never polish it with cleaning solvents. Dusting him off now and then is all you need to do.”
– Scott Seigel, president of Chicago-based Oscar manufacturer R.S. Owens

“These two ritualistically dumpy men reassure us that, in spite of the vast rewards to be gained by irregularity, our interests as a people are being protected. There still may be a surprise winner; God and the Devil still exist.”
– David Mamet, On Price Waterhouse Managing Partners Frank Johnson & Dan Lyle

“I cannot abide by the judgment of other people, because if you accept it when they say you deserve an award, then you have to accept it when they say you don’t.”
– Woody Allen

“It was just a small group getting together for a pat on the back.”
– Janet Gaynor, Best Actress [For Wings], 1928

“After the Oscar I was convinced producers would come pounding on my door with all sorts of exciting parts.”
– Rita Moreno, Best Supporting Actress [For West Side Story], 1961

“It might be a good career move to be present.”
– Sydney Portier, Best Actor Nominee [For Lilies Of The Field], 1963

“I want that Oscar. I want to be the first to win three!”
– Bette Davis, Best Actress Nominee [for Whatever Happened to Baby Jane?], 1962

“Just think, you can actually see the losers turn green.”
– Bob Hope, On The First Ceremony Televised In Color, 1965

“I would rather have a good three-man basketball game than sit here in my monkey suit.”
– Elliott Gould, Best Actor Nominee [For M*A*S*H], 1969

“Thanks. You’re applauding my stamina.”
– Cary Grant, Honorary Oscar Recipient, 1969

“Peculiar as it may seem, I mean no disrespect to the academy. I simply do not wish to be involved.”
– George C. Scott, best actor nominee [for Patton], 1970

“Oh my God, the winner is George C. Scott!”
– Best Actor Presenter Goldie Hawn, 1970

“Nothing would disgust me more morally than winning an Oscar. Nothing in the world would make me go accept it. I wouldn’t have it in my home.”
– Luis Bunuel, Director Of Best Foreign Film Nominee Tristana, 1970

“Hello, my name is Sacheen Littlefeather.”
– Bit-Part Actress [And Miss American Vampire 1970] Maria Cruz, Declining Marlon Brando’s Best Actor Award [For The Godfather], 1972

“In recent years there has been a great deal of criticism about this award, and probably a great deal of the criticism is very justified. But I’d just like to say that I think it’s one hell of an honor and I am thrilled.”
– Jack Lemmon, Best Actor [For Save The Tiger], 1973

“The Academy should fold its tent and go back to baking apple strudel or whatever they can do well. The Exorcist is head and shoulders the finest film made this year or in several years.”
– William Peter Blatty, 1973

“Watching it in my hotel suite, I kept telling myself that I ought to turn it off and go to bed. I felt disgusted with myself.”
– Glenda Jackson, Best Actress [For A Touch Of Class], 1973

“Just think: The only laugh that man will get in his life is by stripping off and showing his shortcomings.”
– Presenter David Niven, Post-Streaker, 1973

“It’s ironic to get a prize for a war movie while the war is still going on. I hope my children grow up in a better atmosphere and in a better country.”
– Peter Davis, Best Documentary Feature Winner [For Hearts And Minds], 1973

“If only half the actresses with whom he’s had affairs vote for him, he’ll win by their ballots alone.”
– Unidentified Actress, On Best Actor Nominee [For Chinatown] Jack Nicholson, 1974

“The Academy Awards are obscene, dirty, and no better than a beauty contest.”
– Dustin Hoffman, Best Actor Nominee [for Kramer vs. Kramer], 1974

“If Dustin wins, he’s going to have a friend pick it up-George C. Scott.”
– Bob Hope, 1974

“He has no genitalia and he’s holding a sword.”
– Dustin Hoffman, Best Actor, 1974

“It’s all a lot of crap, but as long as it’s there….”
– Robert Duvall, Best Supporting Actor Nominee [For The Godfather], 1974

“It was like pumps trying to say that they’re more important than the well and the water. Last night, it was pumps giving pumps awards for being good pumps.”
– One Flew Over The Cuckoo’s Nest Author Ken Kesey, 1975

“I can’t believe it. They went for Fellini instead of me.”
– Non-Nominee [For Jaws] Steven Spielberg, 1975

“We want to thank all of you for watching ourselves congratulate ourselves tonight.”
– Warren Beatty, 1976

“I think you should be very proud that in the last few weeks you have stood firm and you have refused to be intimidated by the threats of a small bunch of Zionist hoodlums whose behavior is an insult to the stature of Jews all over the world and to their great and heroic struggle against fascism and oppression.”
– Vanessa Redgrave, Best Supporting Actress [For Julia], 1977

“I would like to suggest to Miss Redgrave that her winning an Academy Award is not a pivotal moment in history, does not require a proclamation, and that a simple thank you would have sufficed.”
– Paddy Chayevsky, 1977

“It’s insane to have winners and losers in art. To say that one performance is better than another is just plain dumb. You wouldn’t think of comparing two colors in a painting, would you? ‘This blue is better than that blue’?”
– Meryl Streep, Best Supporting Actress Nominee [For The Deer Hunter], 1978

“I accept this for every guy in a wheelchair.”
– Jon Voight, Best Actor [For Coming Home], 1978

“It’s done wonders for my sex life.”
– Ron Kovic, 1978

“I want to take this opportunity to say how proud I am of my little brother, my dear, sweet, talented brother. Just imagine what you could accomplish if you tried celibacy.”
– Shirley Maclaine, On Best Picture, Best Director, Best Actor, And Best Adapted Screenplay Loser [For Heaven Can Wait] Warren Beatty, 1978

“Make no mistake about it, the Oscar ceremony is now intentionally designed to inflict as much pain and suffering as possible on both its participants and its viewers.”
– Vincent Canby, 1982

“This is all connected to Oscar nominations-we may as well be honest about it. I was paid $50,000 for Garp, and now I make half a million. That may not be much if you’re Robert Redford, but that’s a lot of money to me.”
– John Lithgow, Best Supporting Actor Nominee [For The World According To Garp], 1983

“I hate tooting my own horn, but after Steven [Spielberg] saw Yentl, he said, ‘I wish I could tell you how to fix your picture, but I can’t. It’s terrific. It’s the best film I’ve seen since Citizen Kane.’ ”
– Non-Nominee Barbra Streisand, 1983

“I’m up against two Orientals-one of them an amateur-a black guy, and a dead man.”
– John Malkovich, Best Supporting Actor Nominee [For Places In The Heart], 1983

“AIDS action! 102,000 dead!”
– Ceremony Disrupter David Lacaillade, 1983

“I’m gonna cry, because this show has been as long as my entire career.”
– Shirley Maclaine, Best Actress [For Terms Of Endearment], 1984

“All you rock people down at the Roxy and up in the Rockies, rock on!”
– Jack Nicholson, Best Supporting Actor [For Terms Of Endearment], 1984

“It’s like chasing a beautiful woman for 80 years. Finally she relents and you say, ‘I’m terribly sorry, I’m tired.’ ”
– Paul Newman, Best Actor [For The Color Of Money], 1986

“If New York is the Big Apple, then tonight Hollywood is the Big Nipple.”
– Bernardo Bertolucci, Best Director [For The Last Emperor], 1987

“It’s very easy for people to trivialize what we do. They say, ‘If it’s such a big deal, how come nobody remembers who won the Oscar last year?’ But I’ve got a real flash for you. I will never forget what happened here tonight. My family will never forget. And my Native American brothers and sisters across the country will never forget.”
– Kevin Costner, Best Director And Best Producer [For Dances With Wolves], 1990

“Much as I love the Oscar- night pageantry, it’s just a silly bingo game.”
– Jodie Foster, Best Actress [For Silence Of The Lambs], 1992

“My God, they’ve put in everything but Teenage Mutant Ninja Turtles.”
– Anonymous Publicist, On Best Picture Nomination For Ghost, 1991