Nathan Hubbard

commerce at Twitter. Now he's into some new projects. Nathan, how you do it? I'm doing great. Thanks for having me. Okay, so where were you born? I was born in Chicago, Chicago. Did you live in Chicago only briefly? I really grew up in Washington, d C. You grew up in Washington, DC. And what's your father do for a living? My dad was a was in the nonprofit world. Actually, he helped foundations that make grants to make the world of place. Really, yeah, and that's why I was in d C. Yeah, exactly.

And did your mother work outside the home? My mom was a teacher for a long time. But other than that, there were five of us and I sort of come from a patchwork quilt of a family. There's five kids with a bunch of different last names and all of us from different backgrounds. So we got stuff together and that actually drove a ton of like who I am and my business interests and everything. Well, let's go back. So your mother has been married? How many times your

father and your father has been married? How many times? I lost I lost count? So they're not still together? No, okay, So the five kids, where are you in the five? So I'm technically in the middle, in the middle. Yeah, okay, So how old is the oldest? How much older is the oldest? So I have too, I have two older older brothers. Actually, sorry, I have five siblings. So now at six by the end of the podcast, will I lose track? Now I have two older brothers and two

younger sisters and then a baby brother. Okay, So what did we do? Get attached to music growing up? I mean it was the center of everything that I did. You know, I used it. I started writing songs at at a really young age, and uh, I used it kind of as an escape to sort of get through family stuff. And so the family was chaotic, I mean in the beginning it was, and then and then we sort of all came together again like this patchwork quilt and and uh and actually built a family that is

super strong and and you know continues to this day. Okay, so you're writing songs at like early teenage years. What believe you're gonna be rich and famous now? You know? Even sooner? I sat next to a kid in first grade who today is like the foremost leading academic expert on American bluegrass musically. Yeah, and he's a teacher at Pomona east of l A. Uh do you still see all the time. And we sat next to each other in first grade and we started writing songs and we

did it through our sort of pre pubescent years. We wrote songs about frogs and ship and then uh, and then in high school and then into college, we start writing real songs. And he's just a fabulous musician, and I you know, I had a way with words, I guess, And so we created a duo and we started making albums and touring around and helped to put us through college. And okay, let's go back. So you're in school. I mean, there's certainly things that I know about you that the

listeners will find out, But you went to Princeton. Is that a legacy in your family? Uh? There, my my my brother went to Princeton. My parents were went to Northwestern. But uh so so no, I hope that I got in on my own blood, sweat and work. But you never know, how did you decide to go to Princeton as opposed to anywhere else? You know? It was, Um, I just went there and loved it. I just loved

the way that it felt. And uh, um, I just sort of it felt like a place where I could figure out who it was that I wanted to be. And do you still feel that way now having spent the four years there? Yeah. I I met a bunch of people who I still are you know, count as my closest friends. And uh I met my wife and yeah, it's a great place. So your wife was also a student at Princeton. Yes, well I didn't know that. So

what did you study at Princeton? So I studied. I was a politics major, but I really focused on South African politics, And you know, I started my whole life been fascinated with the ways in which people from a bunch of different backgrounds calmed together. After you know, all those different backgrounds and experiences and sometimes tragedies and come

and get together and what they do. And so that's the story of my family, and it's also the story of South Africa, which in nineteen ninety six, two years out of you know, Mandela being released, was sort of building this nascent democracy. And and so I went to South Africa and spent a bunch of time there doing like hardcore on the ground thesis research. And in high school I had worked for an organization with a woman named Amy Beale, who was killed in South Africa a

couple of years later. Um, and so I sort of went in her footsteps and and studied the sort of emergence of democracy in South African, interviewed everybody from like Conservative Thatcher right economists to the Communist party, you know, trade unions to senators and so forth, and sort of painted a picture of how, in particular the a n C was I can't believe we're talking about this, sorry, but in particular, how the a n C had made this transition from being a uh you know, sort of

rebellious uh liberation movement into actually a governing political party. And it turned out, just like our political parties, they had all sorts of differences, and it was creating fissures, which you know, as a liberation movement, those were not ever something that could come to the surface as a governing party. It was starting to affect the way that

they actually ruled the country. And it felt like being in the presence of Jefferson and Washington and Adams and Hamilton's and all of them when you were there at that time. And but for me, it was just an opportunity to go and study and and learn how all these different people come together to to make something happen UM. And I also wrote my second album there. Okay, well was the last time you were there? I was there a year and a half ago. And what do you

think about what's going on now? Well, I mean I think um, the latest uh sort of reports out of South Africa are pretty clear, which is that their project in post Nuremberg democracy like South Africa, from my perspective,

is the most important democracy since post Nuremberg Germany. And because it is a it is a lesson in how you know, post racial violence, hatred, awful things, um can be reconciled and forgiven, and whether or not those people of different backgrounds can actually come together and govern themselves in democracy, and it was working for a while, and it is not working right now, and they're they're just uh, there has been Zuma's administration has just become thoroughly corrupt.

Uh And so it is not in good shape. And it's a sad said thing, because it is so important to how we as human beings think about governing ourselves. To what degree do you see parallels in our own country? Well, I think, um, I see a ton which is that, you know, the institutions. You know, there's some there's some quote that that was in an article that Bloomberg wrote lately, but it basically says, you know, institutions are only as strong as as the character of the people who are

running them. And and in the case of South Africa, the character that people running those institutions has has sort of fallen by the wayside, and there's a you know, massive population in Africa that's suffering because of that. So you're in college. We all have to study something in college to graduate. Did you anticipate having a future in

that field? No, I didn't. I really needed something to do with my summer while I'm my friends went to work at banks and consulting firms, because at that point, you know, I would we were. We'd made a couple of albums with with we got named John Aalaysia, who had produced Dave Matthews band. He did John Mayer's first record, Room for Squares, he did Jason Mraz and a lot

of folks. So we'd made we'd made our second record with him, and I was just trying to get passing grades in college so I could figure out how to how to write songs and play music. Okay, so the name of the act was you two. I've seen them, I've heard of them. Well, so this is the problem. When you meet a kid in first grade and you sit next to each other, you create a band. Uh, you usually funk up the name. And so my middle

name is Church. His last name is Rockwell. So the band was called Rockwell Church, which was great until we got a record deal and everybody started calling asking who the hot young Christian band was, and radio had hard decisions to make about whether to play you know, suburban woosy acoustic rock and pretend it was Christian or not. So Okay, so when you're in high school and it's already rock old Church are you gigging at high school? Yeah, well we played, we had we had a couple of

bands that we played with our with our classmates. We didn't really play shows until college. When we got into college. He went to Haverford down the road and from Princeton, and so we would go to the Fez in New York City or the biterand in New York City would go to teena Angel and Philadelphia or you know, back to some of our old stomping grounds in d C.

And play shows. And then we we'd also you know, play a bunch of schools and just like you know, we sort of followed the map of the day Matthews band. That's why I ended up obviously working for Corner Cap Sean and and love him to death, sort of watched his model and how he nurtured those bands and um and and that was that was how we did it. And were you making any money? Yeah, you know, we ended up doing okay, you know, uh again, when you focus on touring, it's it's a great way to go.

And and was there a manager and agent? Yeah, the Corns red Light Management to care of us. Really. Yeah. So what year did you graduate from college? Uh, so Dave Matthews man had already made Dave Matthews Band was taking off right sort of as we were entering college, and uh, and John Elisia connected us with the Red Light guys and and and a sweet wonderful man named Chris ted Selly took us on his management client and sort of shepherded us through that that that process. And

so while you're in college, this is happening. Yeah, we were. We were out gigging on on weekends a lot. And uh, you know, we put out I think we put out to yeah, two of our albums while we were in college and um, selling them out of the back of our you know, of our dorm rooms and uh and doing it well. Were you famous on campus as the musician? I don't know that. Nobody's famous at Princeton the uh,

the nuclear physicists are famous at Princeton. But but you know, we had a good thing going where we could go. Played a couple hundred people, um in most of the you know, major towns on the East coast, and we ended up when graduated, playing a lot of schools sort of west and almost every state we played in. Uh. And so we've been do you enjoy it. I loved it. They loved the road and every that I loved everything about it. I I mean, what's wrong with turning around with

your best friend and meeting people? And you know, um an underappreciated thing about about gigging is you get to

see all parts of the country. You get to meet people in the middle of Utah, you get to go play pulled pork barbecue at the University of Western Alabama, and and you know, you understand how the sort of cultures match up and how they flow and driving it is so important because when you fly in you don't really see how not only sort of topography changes as you drive across the land, but the people change and sort of how they flow and how those cultures pass

and um. So it was a great learning experience for me, you know, sort of consistent with understanding how people of all these different backgrounds get together to to to make a moment. Well, yeah, it's fascinating you say that because in light of the election, you're reading the mainstream media and you realize, other than the people on the opinion page, they don't interface with any of these people all day long. I'm writing about Paul takes I'm hearing from people across

the spectrum. So when you go to these places, you learn something that a lot of the Bloviators on television and in print really have no idea of. Yeah, I mean, look, Zuckerberg took a lot of ship for traveling state to state.

But if you don't go and spend your time there and and dig in, I don't know how you you know, I don't know how you can pretend to understand who who people are, whether you're in whether you live in Alabama and you don't go to Los Angeles, you live in Los Angeles and you don't go to Alabama, it

sort of creates the same set issues. So you're pursuing the dream in your mind, you're gonna hang in there as long as it takes to make it, or well, yeah, we're gonna hang in there as long as it takes, and and uh, and keep writing songs and and keep playing and um, you know, we did it for a couple of years. We end up making five albums. Um. But there's a time when he and I are driving down the back roads of Iowa headed to a gig in the fall about this time of year. It's gorgeous

and Iowa. Everything turns golden and we're head to do gig and he turns to me hours on the road where we don't and say ship to each other. You're driving an suv or whatever. And he turns to me and goes, my dad's gonna kill me if I don't go to grad school. I was like, oh God, I gotta figure out what I'm gonna do with the rest of my life. And uh, you know, one thing that another we pivoted. I we kept playing for a couple of years after that. Really, yeah, so I picked up

with a startup in San Francisco. Before you do that. As I said, I didn't know until this conversation that the guy is now a bluegrass expert. So what did he go to graduate school in? So? So he went to he went to to get his PhD in music and and so, uh he went to University Chicago. And while he was at University of Chicago, I was at the startup that I'll tell you about. And and we would still hop on the plane and fly to Philadelphia and play absolutely and and and keep doing it. Um,

so you're at this startup, tell me about that. You know? It was like Nielsen is to consumer package because this company was to wireless mobile data, and so it was the first come funny that really was helping the CEO and CMO of a ten t year Verizon measure their business and make decisions based on But how did you look up with this company? I had a friend who was starting it in San Francisco, and I looked at what they were doing and it looked boring as hell.

It looked awful. But I looked at it and said, you know, there's a massive internet boom happening in San Francisco right now. I'm gonna learn a ton and I'm gonna go for it. And I don't know if this is going to be two months or you know, two decades, but I'm gonna go for it. And just stopping for a second, you met your wife in Princeton. When you're gigging on the road whatever, you're maintaining a relationship, I mean, as best as you can when you're on the road. Yeah,

And what was she doing at that time? She was a management consultant. Okay, so you moved to San Francisco. You gotta work for the start up and uh and I did three years there. I got an awesome business education. We grew from probably six people to couple hundred and um, and I just could not get the desire to be in the business of music out of my heart. And um.

So that company eventually got bought by Nielsen and and did really well and not too long after I left, and and I learned a ton about mobile and tech and data and um, you know, things that I ended up using even you know, when I was a ticketmaster and Twitter for sure. Did you have any stock in the company? Oh yeah, absolutely, like everything, like like every person do well on the sale and did okay? I did? Yeah for for me at that age, right, yeah, for me at that age, it was great and and I

never thought it would amount to anything. But but that was a gift, just uh, you know, serendipitous happenstance. But but I really, I really wanted to be involved in music.

And so I went back to business school. And because it just felt like again you asked me why I went to prison, I went to business school because it felt like two years to figure out how to pivot and and to learn some things that again my friends who had gone and gotten banking and consulting education had probably picked up some of the basics UM, and that hopefully that skill set would give me some leg up in the business. Okay, so you felt you actually that's

why I went to law schools. You're thinking, you go to business school and then you figure out your place in the music business. Absolutely, Now you went to Stanford. How did you decide to go to Stanford? Uh? You know, I felt like, uh, that school. You know, I've since done a lot of board work for them and spent I'm a big advocate, so I'm super biased. But that school does not just sort of teach the X and os.

It teaches xs and os. It teaches you how to uh manage and lead people and and it teaches you how to understand yourself to be sort of the best leader that you can be. And Stanford was also at the sort of heart of a bunch of the dot com things that were happening at the time and UM, and so it just felt like a place that that was going to be supportive of me as a sort of non for aditional MBA candidate, you know, songwriter guy

who also had been at a startup UM. But a place that that that could welcome me and teach me and make me better. So, but to my understanding, it's not my area of expertise. Stanford has a slightly different model than a lot of these other business schools that there's smaller groups and you stay within a group. Yeah, it's it's a much smaller school overall. And uh, and you stay with your class. Most business schools they sort

of divide you up into sections. Stanford here with your whole class and and so that's an opportunity to get to know three sixty people at the time, really really well. And these are people who go off and do amazing things, from you know, steel mills and in Argentina to you know, oil business in Russia to you know, uh, startups in the valley. Now to what degree that those relationships continue to pay dividends for you? Uh, they continue to this day.

I mean you know that there's a there's a great network of Stanford Business school people all over the world and all in almost all industries. Um, candidly, the only the only place didn't help me was in music. Um Um, I think there were no graduates in the music field. There weren't. There weren't and um and that was okay because it actually, you know, I think probably at the end of the day, it was a nice little brand that gave me a leg up and an interest in

some places and gives you that sort of validation. But um, but certainly the education gave me a lot that I used in every single thing I've done in business sense. So would you recommend people today to get an mp Yeah, I do. I I'm I am not. I am not in the camp that says you should drop out now, I don't recommend that people go get any m b A. And what you're seeing right now is the drying up

of a lot of those programs. They're just having problem feeling a two year education in some schools because the opportunity cost of going to school x versus taking those two years if you know what you're gonna do and

going and starting a company is not there. Um. I do think that the program and the ideas that you know an MBA program like Stanford each is are super universal because at the end of the day, it's shifting more from here's how you um you know, here's how how you do accounting, and here's how you do statistics. It's moving more to here's how you understand yourself to know how you influence people and read other people and motivate them and give them candid feedback and lead them.

And that's really the value of an NBA, especially for a lot of people who have been management consultants and bankers taking orders. So in between your first and second years of business school, during the summer, what do you do? I moved to New York City and I worked for

Michael McDonald at a t O Records. Uh, Dave Gray's album has come out, and I have no official job, and I just show up and start building spreadsheets thanks to my UM Excel class that I took a Stanford in my first year, and start building spreadsheets to help them build a little bit of a predictive model around what each artists they're gonna sign, how well that artist's album is going to sell based on past history, and how much money we were investing in marketing and all

these things. So I was kind of making it up as I went along. I'm really just interested in jumping in and figuring out how to help. And this is the turn of the century. To what degree are the people surrounding you at that time interested in data? Um, well, you know, a couple of years later, I went to the Aspen conference and I met you there and I think I made a case that that we would be able to use data to to better predict the songs that people liked, and you blew me up in front

of everybody. So at that point in time, I don't think there was a whole lot of interest in data. Obviously I made a big impact. I'm sorry about that. Moving right along, you graduate from Stanford and then what's your next step? So, uh well, I called the folks he used to manage me, and uh I called Corn. And Corn at the time was, you know, expanding his business is pretty rapidly. He was growing his management company from basically Dave and Us and a few others to

you know, the behemoth that it is today. He had the record label, he had, you know, a whole bunch of business and festival business, and he had this little business called Music Today that was doing the online stores for just about every band you'd ever heard of. Who

idea was that Corn's idea? Originally? Yes, it was. You know, Corn is a student of the Grateful Dead, and he watched how they ran their business and understood the internet and the power of the Internet and basically took the model that was not just hey, let's have the band tour every year. Um, but you know, he understands the fan experience and so he said, we can also take that amazing merchandising organization that that the Grateful Dead has and we can move that online and so um, he

had a huge one going with Dave Matthews Band. And not unlike Amazon Web Service is he understood that he could build a business that basically scaled up his infrastructure that it took to support the Dave Matthews band and do online stores for just about every band. And that company at the time was not interesting to me in any way, shape or form. I moved to Charlottesville, Virginia to go work with Corn and and thought, well, I'll get to manage some bands and I'll get to, you know,

work on the record label. And um, Corn of course, in his wisdom, had better ideas. And you know, the truth is, a month into me being down there, it was clear that music today was an amazing asset that just needed a little bit more focus and attention and and and maybe a little bit of um, you know, maybe a little bit of a bit of leadership and sort of full time, although there were some great people there, but um, but I went over to Music Today and I worked at A Corn's office, But I spent almost

all my time looking at music today and figuring out how to take it from something that was it could be to a uh to a realize said, so, how long do you work at Music Today until it's ultimately sold to Live Nation? So I think I was there for about two two and a half years. And how

what is the decision process to sell it to Live Nation? Well, um, you know, Michael had taken over Live Nation, you know, not not not yeah, not long there before, and I flew out to Los Angeles to watch him speak I think at the poll Star convention, and uh, you know, he gave a just super inspiring presentation on you know, how his vision was to connect artists and fans. And I walked out and called Corn said, I think Michael Repino is gonna buy music today, and and we sold

it to him for the end of the year. Now, just jumping forward, Live Nation has now sold music today itself. So what's the status of music today? You know, I don't know the answer to that. Actually, um, I think Corn Corn, to my knowledge I think he brought it back, and um, you know he's I never I never doubt

Korn's business decision. He's always got something up his sleeves. So, um, you know that asset, though, played a played a really important role through the course of a lot of things that we did at Live Nation, including launching the competitor to Ticketmaster that ultimately forced the merger with Live Nation or with the Ticketmaster. Okay, so you are there at Music Today, you sell it to Live Nation. You know

that you're gonna go Live Nation as part of that deal. Yeah, I think that was something that that we had spoken about with Michael and gotten Corn's blessing. Uh you know, again, to his credit, he was super supportive of me. And so moved from Charlottesville to to Los Angeles. And how

did you end up running Ticketmaster? Well, you know, look, um, when I moved out, Michael understood that his contract with Ticketmaster was expiring in in a short you know, year and a half or something, and um, he knew that he wanted to control ticketing, and so he uh convinced me to go build that build a competitor and um, and so in a very very short period of time, we from scratch built up a competitor to Ticketmaster that was going to take over Live Nations tickets, and we

ultimately signed a deal with SMG and others that that I think built up a real competitive threat. And um, I think that as much as anything, was a big forcing function for the merger. Now. But if we go back in history to that time proximately ten years ago, did it work? You know, well, I know it launched in the issues of sustainability, but did the ticket did the Live Nation competitor Ticketmaster actually work? Well? So the answer is yes, we did the Lamp theater season on it.

If that's the if that's the metric. Uh. Did we get what we wanted from the company that we licensed software from, No, and that was proven out through arbitration everything else. So, UM, I think we did. The team that the team that was behind getting that thing off the ground. That was the hardest year of my life by a mile. Uh. We didn't sleep well, and you know, were all the physical burdens of stress that you hear

about when you start up a company. It was the scariest thing because we knew on January first, two thousand and nine, that this thing was going to go live and either you know, a billion dollar plus business was going to go into the ground or it was going to take off and it was gonna work. And and it worked enough for us to uh, you know, to do the bare minimum and get get get those tickets sold. Now, the company that you're referencing, what assets did they not

give you? So it didn't work. I don't even want to go go into that. What I can tell you is that, uh is that we had we had heroic work to do to to get the app theater season up and running and going. And it was it was by the by the amazing work of that team that we were able to keep the walls up and keep the business going. So the merger happens, how do you

end up running Ticketmaster? Well, I think, uh, you know, Music Today had been doing a lot of fan club ticketing, uh and you know, we'd built up a competitor really thinking about the soft underbellies that we saw at Ticketmaster at the time, and so UM, it was pretty clear in the moment that um that you know, the Ticketmaster

needed a new leadership. You know, I don't know the numbers totally right, but before the merger, you know, Ticketmaster lost maybe a third of its IBATA over just a short number of years, and so there was definitely a need for culture change and probably strategy change. And UM, I think we were you know, Michael and I were lined around around the way to to do that and uh, but it needed a leader and and so he asked

me to go do that. He gave me that opportunity. Okay, So what was your biggest challenge once you actually were placed in that role? Well, UM, biggest challenge you had. You had a really big cultural challenge. You had you had a company that uh that probably didn't believe in itself um at the time. UM. And and you had a you had a client challenge, which is that you know, as has been well documented, I think UM, taking Master probably had underinvested in technology at the time. And you

know that's changed dramatically since then. But at the time and UM, and those two things together meant that you know, you'd lost business over the last couple of years, you had probably demoralized staff, and you probably had some people who weren't right for the business there anymore. UM. And you know, you had obviously the people joke about the brand of taking Yes, at the time it was it was not thought highly of. But that was the least

of the problems that the company had. I mean that on the company had was how do you continue to your in a lot of ways, your marketplace business. You've got consumers on one end and you've got supply on the other end. Well, this is a supply driven business, ticketing is, and uh, the question was how do we

hang on to supply through that merger. A lot of people worried about what that meant for them, you know, Live Nation, Ticketmaster coming together, and so we had a whole lot of ballet dancing to do to reassure clients that this was going to be great for them, and and and most importantly show them a vision for where we're going to go forward. Hey it's Bob left Sets. I thank you for your time. Welcome to my new podcast, the Bob left Sets Podcast. Remember to subscribe I've tuned

in iTunes or wherever you get your podcasts. Okay, we're back with Nathan Hubbard, the ticketing Expert. And there are a number of issues, number of challenges that are facing the concert business today. Let's stick into the weeds a little bit on ticketing because you're the big ex it on this. You stated earlier that Live Nation wanted to have its own ticketing business inside the business, it's concerned, it's considered this point the only money is in ticketing.

Can you explain that to our listeners? Well, I don't know if I agree with that. Okay, start with what you mean. Look, let's let's just go back to to you know, on the Live Nation side. And I don't I don't need to comment on this, but but but you know, Michael had the vision which he understood the power of content, and he understands understood from the beginning if he could aggregate a bunch of content and pay the artist as much as possible, that he would find

other ways to make up that money. And and and a lot of that was sponsorship from his background, and you know, turned out a lot of that was going to be ticketing too. And there's a lot of other ways that that that I'm sure that they're inventing. So so uh, you know that said that was also in a moment right when the merger happened, you know, in

two thousand nine. That's in a moment when the headlines about what's happening in the record of music industry are are as bad as they can be, right, And revenues have gone with and artists go from making their money from from from their albums, from from the road to you know the inverse at best um and so so there was a lot of money in touring. It just depended on what part of the value chain you were in. Okay, okay,

but let's explain, because Ticketmaster, generally speaking is hated. Explain what ticket masters function is and how the money is split up, how ticket Masters make steals with buildings, and how the the ticket fees, how that comes in, just in terms of explaining that because a lot of people don't understand it. Yeah, I mean, look, I take issue with your hated thing UH at this point in time, I'm proud of what they've done since then. But I will I will give you the basic layout, right. The

basic layout is this. You know, Ticketmaster is is a software platform that UH signs venues and UH distributes the tickets to the fans. And what you're really asking me what that question is, what's up with the fees? I think and and I think that that's one of the most Look, I spent a lot of time when I was there and uh, you know, helping to try to

educate the world about what those fees are about. And um, you know, through time they became you know, the economics of the business are such that the artist takes a really big percentage of the price of the ticket, the face value of the ticket, and the fee became away for other parties in the value chain to make money on the concert, whether that was the venue or the promoter or yes, the ticketing company. Also let's insert here that the artist had a percentage of the orall income

but could not commission the fees. That was a big driver of the creation of the phase. Yeah, that's right, there was kept outside of the deal, right, and so needless to say they got bigger through time. Um, but I think listen, you know, Ticketmaster has you know, even to this day, there's a ton of transparency behind their financials because their public company, so you can see what their margins look like, you can see how much money

they make. And I think at the end of the day, what's massively misunderstood is most of that feed does not go to Ticketmaster. Most of that fee goes to other parties in the value chain. In a lot of cases of the venue um and they use that to make money because so much of the face value and sometimes more than the face value of the ticket, as you know, in the live business, is going to the artist. And what and how many cases does the artists participate in

that fee? You know? Uh? I don't ye, I don't think the artist really directly is participating in that fee. But if you've got to deal you know, at a venue where the artist is making of the gross and then the artist business partners, how's that possible? Well, you know, artist business partners are in there too, So you know, you've got a whole bunch of other revenue streams, one of which is fees. There's beer and popcorn and parking and all these other things that that that that make

up how that artist gets paid in that way. Okay, going on to a couple of other issues. Some people might say, Hey, I have a fee for these concert tickets, but there's no feet when I buy a Dodger ticket a sporting event. Why is that? That's one of the weird artifacts of the of the business. Right in the same arena you can go to to to to uh, you can be a season ticket holder and pay no fees, and if you go to another event, you're going to

pay the fees. That um, as you referenced earlier, can sometimes frustrate people because they don't understand them to say the least um and and so the point there is just we're in a world where uh, concert fans are subsidizing sports fans. And while there is some overlap, but well, well it's not complete. Well go a little bit slower so my audience can understand in what way are they

subsidizing them? Well, so the ticketing company has got to make their money, right, The ticketing company gets paid, as do a bunch of other players in the value chaine the venue. Okay, but but let's go back to the beginning here. Let's assume my own arena. I choose a ticketing partner and it's an exclusive deal. That's right in the u S. It is okay, and money is it changes hands when I signed that deal. No. Generally, the way that it works is that is that the ticketing

company gets paid uh percentage of that service fee. It's a lot less. I'm not trying to say let's say, uh, I own arena X and I make a deal. Let's just say with ticket Master. When I sign up for three years, this ticket Master either write me a check or guarantee me income. Look not to speak generally. Let me speak generally about it and not specifically about Ticketmaster, because I'm aware of, you know, the practice of a

bunch of businesses generally speaking. The way that it works is you do this is oversimplifying it, but we do a deal and uh, yeah, you sign up for some term. Pretend it's three to five years or something, and uh, I sell those tickets and there's a fee on those tickets, and we split that fee and I get as a ticketer, I get a small percentage of that. You, as the venue,

get a larger percentage of that. And then the venue sometimes goes and splits that fee with his partner, whether that's promoter, artist or you know, whoever, sports team, whoever it is. Isn't that okay? But there are a number of ticketing options. How does the venue decide which one to go with? They'll put out an RFP and everybody will come and bid and do a dog and pony show, and they'll make decisions about what's best for them. But but the key there is that those contracts and this

is again ticketing platform a stick. Generally charge fees on individual events and individual game tickets in sports, but don't charge fees on season tickets. Well, in a world where most of the tickets for a sporting event are sold as season tickets, that means that you make a heck of a lot less off fees then on a on a game than you do when the circus came to town, or a concert or you know, wrestling or whatever it

is in the building. Which is to say that those fans who are going to those non sport events pay a fee that subsidizes a lot of the fans who come to see a sporting event. Well, as I say, that's an historic fact, just like uh, we talk about certain things with phone calls or services in our cars that don't exist anymore. Question is well that continue to be the case or do you foresee some reckoning down the road. Well, I think the sophistication level of owners

of these of these venues is increasing. Right, You've got really smart people who are invested in the whole building, and so there they know that they're competing against you sitting at home on your couch and watching a game on TV or or you know, not coming out to the event. And so I think as they look holistically at their business, one of the things they will think about is how can we get somebody to convert more easily, just like again Amazon does as they think about a

fan coming through their purchase funnel. So uh so as they look at that problem, if they look at the fees as a blocker, Um again, you know, the last thing that we wanted a ticketmaster, that I wanted, I'll just speak for myself, was you know, I hated the fees because because we got blamed for m and we didn't even make all of it. I wish I wish we were able to make pocket all you know, all that fee. And I'm sure every other ticketer feels that

way too. Um. You know, So it's on the venue or the artist or the sports team to make decisions about changing that structure. And I think that as owners of those venues, who are generally now in a lot of cases, the owner of a sports team, big ones, right, um, might look across there, they're the entirety their business and say, let's think about how we present ourselves to the fans in a different way. And I guarantee you that the ticketer will happily fall in line very quickly behind that

because it's better for their brand too. And one of the big complaints consumers have is that they see tickets for events online before the on sale date. What is going on there? Yeah, so that's in a lot of cases, that's speculative ticketing, and that UM. Frankly, we talked a lot about issues in the industry now that UM, some of which have been addressed, some of which are are sort of evolving. There's a lot of interesting solutions to them. One of which that the big issue, a big issue

that has not been touched a speculative ticketing. And what that effectively is is a broker will post a ticket to a site that he does not have, and uh, it will not be communicated to you that that ticket, at least it won't be communicated to you in a in a clear way that that ticket doesn't exist. And the broker will say something like, hey, it's you know, for the National Championship Collegiate National Championship game that's in

Atlanta this year. Um, you know, you can buy a ticket for five thousand dollars and two tickets in you know, row twenty and the broker will post that because he knows that he if you buy those two tickets um, even though he doesn't have them, he knows or he believes that he can go into the secondary market and find two tickets that are as good or better for less than that. So he arbitrages the difference. Maybe he can go find those tickets for two thousand dollars each um.

And so what that really means is that they're fishing for suckers. They're trying to find people who are so anxious to go that they're willing to pay an exorbitant amount. And then the broker has the money in his pocket, he leaves he can go out and find those those tickets for less. Not not everybody does this. But there's a couple of problems here. Number one, there's not clear communication to the fan about about whether or not those

tickets actually exist. That's not a problem, I guess. I mean it is a problem because the consumer should know. But in practice, if the broker goes and fulfills that request and you get your tickets for five thousand bucks, you know, did you get did you get? You know? Were you a sucker? Yeah? But at least you got

your tickets. Now what happens, unfortunately, is brokers. This is like short selling a stock, and sometimes broke will get pinched and there's so much demand for an event that yeah, maybe you bought your ticket for five thousand dollars, but the broker can't actually buy those tickets for less than five thousand dollars. So he's in the hole now because tickets are being priced for seven thousand dollars for the

National Championship game. And what happens in a lot of those cases is broker's close up shop and disappear the you know, uh, sort of bad acting brokers. There are a lot of good acting brokers on guys who run real businesses and have real relationships with with with customers and so forth. But in the speculative business, if they're

getting pinched, they disappear. So none of these brokers ever say I charge five thousand, but I'm gonna go out and buy the ticket for There may be some who fill their orders in service of protecting their brand, but there are a lot who don't. And that's a problem for a game like a National Championship game, where somebody's traveled from miles away. They show up, their tickets don't exist, and they're stuck because there's so much demand that that

they can't actually get access to those tickets. Now. Um. Now, you know, I think there's been some governmental interest in that issue. Um, but that to me is one of the sort of hanging there's no reason why you can't have a a concierge service that says, Bob, I don't have the tickets right now, but tell me what you want, tell me what you're looking for, tell me how much you want to spend, and I'll go find it in

the market. That seems like a totally reasonable service. But to offer that alongside in the same user experience as tickets that supposedly do exist feels pretty misleading to me. And so um, that's a practice that I expect will be cracked down on in in you know, in in the kind I know there was example was at last year, everybody went to some big football game, they traveled, maybe not Tre Dame or something, and their tickets didn't exist.

But what I've viewed stuff like this, it's like, you know, we've talked earlier about spam email, and we talked about the no call list. Every day my phone rings with illegal phone calls, and the government seems to be powerless against that. So I think you could deter this, but

I'm not sure you could eradicate. The solution is if you digitize every ticket, you know if it exists or not, so you can you know, you should have secondary market sites that can look the fan in the eye and say, yes, we have the ticket, will deliver to you right now, or no, this ticket does not exist. As long as tickets are pieces of paper divorced from identity and payment and geolocation, you have all sorts of scurl less like you know, um, bad actors and and bad behavior that

can happen around that ticket. Because it's really just a piece of paper. It can be photocopied ten thousand times and sold and the first guy gets in the building and the rest are stuck. Right, it can be transferred around sort of without you know to to to again other bad actors. If you if you actually digitize the access credential, you can solve a ton of those problems around fraud, around the consumer experience, and and sort of massively make make the user experience better. Let's go to

Broadway for a second. You have the Hambletons. They give a certain number of tickets away in a lottery, and they have a certain number of tickets that are sold close to a thousand dollars. Now, in this particular case, we're not talking about repeat business. The play will the music will be on Broadway for X number of years, maybe it'll be a revival ten or twenty years down the road. Most people don't go more than once. Why

not just either charged with the ticket is worth. It's not like a band that going to continue to be on the road for two decades. Why in that case,

just not make every seat in the house a fair price. Well, I mean you have to ask the produces that my senses that they believe that what they have is a very very important piece of content, and that they want to spread it far and wide, and that they feel like there's one part of their mission, which is to make a bunch of money, but that they've made a shipload of money, and that that from here they're also

interested in in educating people and bringing them in. I love what they're doing, and I think I think from an artist's perspective, By the way, there's gonna be a Hamilton's movie. There's a ton of Hamilton's merch people are going to see that thing multiple times. God knows, I've taken my daughters twice. Uh, so you know they're they're uh. I think when you think about lifetime value of a fan,

you start to think about distributing your inventory differently. We now have more interesting sets of data, more usable tools to flush that data through, to help you think about how to distribute the inventory in some way other than first come, first served. Everybody go, the gun goes off, there's a big stampede, a bunch of people get trampled,

and whoever survives gets the tickets and comes into the show. Okay, so we understand from a business standpoint why the fees exist, but the public can't wrap their head around these fees the same way the public has had a hard time wrapping it set around streaming. I still get email people saying, hey, if I don't have a connection, I won't be able to stream, not knowing that you can sink files to your hand set with a streaming service, assuming you have

the premium version. So is there any way to grant transparency or to clean this up so that the person at the end, the person buying the ticket, we'll understand what's going on. Yeah, I think I think the ticketing business has gotten better at this. We talked a lot about this when I was there, and and you know, the fee is an extension of the ticket price. What we've done in the live event business, and I'm not talking about ticket mester, I'm talking about just the ticketing

business in general. What we've done in the live event business is, uh is we have sort of shipped our order chart, which is to say, we've exposed the inner workings of the deal structure. Right, why should the fan know? You know, all the fan cares about is how much of my hard earned money are you asking me to pay? Right, and you know, don't show me that it's forty bucks and then there's another twenty dollar fee on top of that.

And one of the things that that we did and that continues to this day, is we started showing the all in upfront and you can see the breakout. But at the end of the day, trying to tell the fan, here's how much of your money that you've got to spend to go see artist X and um, And that has a remarkable impact on a fan's happiness with the processes.

You can imagine now. You know, one of my big criticisms of the secondary market right now, and I'm sure we'll get into this, is, you know, the secondary market is way less transparent about what those fees are. You can get up to the very last about to buy it button and all of a sudden be slammed with fees that can increase the overall price by ten fifteen

sometimes of what you thought you were actually paying. And you know, I'll leave it to I'll leave it to others to stop stop Hub go to an all in pricing. And then their sales went down. You know that's the sort of um, that's that's the lore. Uh. You know, I also think that their growth has slowed in a significant way regardless because of a whole bunch of other

dynamics in the business. So sure when you um, you know, that's in part I think because other companies in the secondary space continued the practice of what I think is effectively tricking fans and telling them, hey, come on in the prices X and then it ends up being X plus Y and lies a lot. SOUM. Did they suffer

from that? Maybe? Um, but it still feels to me like an issue in the industry as a whole, which is, how can we be more forthright with the fan about how much of his or her harder money we're asking them to pay. Okay, let's start. Let's start in the concert business, because there's certainly sports and other events. Why does the secondary market exist? Well, it exists because historically

with two reasons. One does it exists because we used to be really bad at pricing and and we still don't have as much data to price the inventory as most of the rest of retailers have. Um. And then I think, to a sec you know, to a lesser extent, I think the secondary market exists because, hey, being being a concert promoter, being a a sports team owner is a risky business in getting people out, and brokers have historically and to this day, um, you know, much more

so in sports than concerts at this point. But uh, you know, brokers have been an insurance policy, basically, a way to offload risk in the event that people aren't going to come out. Let's let's speak English year for the person at home. What we're saying is that the promoter is paying so much money for talent that they are literally selling the tickets to brokers to make sure

that they can help meet their number. I think that that happens way more in in sports than in concerts, right, UM, I think you know, just generally speaking, you know, brokers are now partnered with teams UH in a lot of cases to help take some of that risk off. But a but a sports season is way different than a concert, right, A sports season. You've got eighty one home games for the for the Yankees. UH. As a season ticket holder, you know, you may not come to all any one games.

And by the way, the Yankees might be crappy in August and you're not gonna go sit in the upper decks to go watch the team play. UM. And so for teams, sometimes there's an opportunity to offload a little bit of risk that that happens, UM, and brokers are happy to do that because the upside is that if the Yankees are great, then as a season ticket holder, you get face value access to playoff in World Series tickets. And so that just happened with the Dodgers, right the Dodgers.

There are a lot of brokers who through the Okay, since we're going into this, let's go a little bit slower. The Dodgers. Dodger Stadium is the largest baseball venue. But let's just say approximately forty tickets are on sale for any baseball team. Okay, how many of those season How many those tickets are sold as season tickets? How many to the public, how many to brokers? Obviously there's no

rigid numbers, but your best estimates. Look, it's hard to generalize because these teams take super different strategies, right they they There's some teams that think, um, you know that think that have trouble selling season tickets in their market, and so they're happy to offload big chunks of their inventory, more than fifty of their season tickets, for example, to

a broker or a series of brokers in that case. Um. And then there's others who say, no, you know what I want to UM, I want to try to sell directly to as many consumers as I possibly can, and I'm not going to use those brokers. And and so it really does run the gamut in the sports business right now. But there are teams who sell more than fifty percent of their seasons he gets to brokers. Now, it's important. It's important to point out any fans who come in and who want to buy a season ticket,

it's there for them. It's not like you can't get access to that inventory. That's the problem we've had historically in the concert business, which is that, you know, the prevalence of bots has kept, uh, kept fans from being able to actually access the tickets that they want. In the sports business, if you want to show them buy a season ticket from a team, you're gonna be able

to do that. It's just that, you know, in a market where uh, you know, there's eighty one home games or forty one home games for an NBA team, sometimes, uh you know, there's some markets where where there aren't twenty thousand people who want to go all in to spend the big money on that secondary market is accelerated that because as a fan, you know, now for a game tonight in any of your local NBA or NFL teams markets, you can go onto the secondary market and

buy a ticket at a reasonable price for the for that game. So why am I investing in season tickets? Now? There are good answers to that, um that involved how the experience on site can be, you know, really great and fun, and teams have invested in these venues to make great physical space. Uh. So that there's clubs and you know, food options and all these things to make it worth getting off your couch. But but but that's

why it happens. Okay, just to go back to your point, that you can in sports, you can buy a season ticket in sports. Is it like concerts where you can't get the good seats because they're taken already by inside relationships or brokers. Um that's true to a certain extent, except that that you know, there's people who have held

their season seats for fifty years in their families. Right, So it's much less that they're being sort of handed out to v I p s more than it is people have control of those seats and they hang on to them because because the team plays, you know, forty one times this season and they're coming back next year. Right. It's it's a lot different than a concert, which is a one off event that you may not you may not be able to see that artist in your town

for another three for five years, if ever. Right. So, um so wholly different dynamics, um Uh. In terms of how those season seats are are distributed, It's hard to get a courtside seat for the Knicks because nobody's given those up. Um, it's you know, you can get in there and get a decent season seat for the Knicks if you're willing to invest the money that takes to to do that. And for hot games like the Yankees come to Dodger stadiums. To what degree are brokers buying

tickets from season ticket holders in order to resell? You know, in sports, that happens a little bit, and basically they'll they'll they'll search for suckers who are willing to were

willing to to, you know, sell tickets for cheap. But mostly the dynamic in sports is brokers make decisions about how many season tickets they want to buy, they buy them, they try to basically break even through the course of the season, and then you know, regardless of sport, Um, maybe they can make a little more in football, maybe they're can be a little more in in in basketball. If you know your Warrior season ticket holder right now,

you're probably doing pretty well. Um, but you know, uh, you're holding for the playoffs because that's when the games get tight and the competition gets gets awesome, and people want to go and they're willing to pay hundreds If not thousands of dollars, right, and so so they're really taking a bet that and it's not just a one year bet. Their betting you know, Dodgers season ticket Uh, Dodgers brokers who bought a bunch of season tickets for

the Dodgers were in there for years. I mean, they were betting over the last five years that the new ownership group was going to build a team with the payroll that they were spending, that was going to make it to the playoffs. And um and you know that paid off for them this year with a seven game

World Series. Now, so you're saying that one good year it can make up for five break even years if that, well sure, I mean, uh, if you're basically breaking even and then you get to the playoffs and you know you're clearing a thousand dollars a ticket, uh, and you control a significant number of tickets and there's four games, that math adds up pretty nicely. Uh, you know, over the course of just a World Series. Um, so yeah, it was. Okay, Let's assume you are a ticket season

a season ticket holdering four sports. To what degree at this point are the teams controlling your ability to resell those tickets. Yeah, they're not right now. I mean it's in the team's interests for a fan who invests that much in the season ticket to have liquidity and be able to resell when they can't go. So I don't I don't see teams put in many constraints on on

their fans in that regard. Um, I mean I think they you know, obviously, secondary market is come in and and has various deals with the leagues and and you know Stubbubs got deals and you know ticket Master's gut deals and Sea Geeks gut deals and but but for the most part, I think, uh, teams are happy to have this. The season ticket holders invested. You know, they're putting their money up front, and there's a lot of

reasons why you can't go to games. You know, my my dad was a Redskin season ticket older for thirty five years and uh, you know he um, at some point he just couldn't go to the night games anymore. Well, uh, he should be able to resell it. They still want him to have that ticket, And I just think down the road they want to know who that fan is who's actually walking in on Monday night. But okay, Um, but are they forcing new to use a specific reselling platform.

I I don't see that. I don't see that much. I don't see that much. I mean, I think there's, um, there's some sort of official ones, but I'm not I'm not really aware and I'm probably missing something, But I'm not really aware of a situation which you're forced to only use one platform to resell. There's some situations. I know in Cleveland, Uh, they've got a plat. In Houston, they get a platform called flash seats where sometimes they lock it down and they force you to only resell

the ticket to that exchange. And I think in general, for the fan, being able to resell in a bunch of places is generally a good thing if that's what they want. Um. But yeah, okay, let's witch, let's witch the concerts. Yeah. I've been made aware of the fact that if you are buying tickets to resell it concerts, generally you will be It's a very difficult process because the broker's own tickets have their algorithms. Let's say that if you price the ticket fifty, they'll price it at

so they will always scoop up that money. Can you talk about that? Well, I think what you're I think what you're referring to is that now brokers are sharks, and whether it's sports or concerts, And I mean I say that, I say that almost admiringly, and that in the in that they're getting really good at how they price and they're sophisticated. They've written software that is interacting with a bunch of the secondary site API s and scraping a bunch of data and figuring out what is

the optimal price for each ticket right now. So if your question is if I'm a regular fan and I'm trying to sell my ticket, um, are there going to be you know, I'm competing with a lot of sellers who have access to they have asymmetric information, They have better data than I do as sort of the ordinary fan in terms of what you know, the clearing prices for this ticket. Um. And yes, there's a whole bunch of automated software that's making pricing changes on secondary markets

to try to match supply with demand. That said, if you're a fan, you can't go and you want to put that ticket up and sell it. You know, as you said earlier, UM, certainly a a broker would be willing to buy a ticket at a certain price if they know they can get a higher one. And um, you know I I have shows or games that I go to all the time where I'm just trying to get my money back, and the secondary market super efficient

for that. Okay, But as I say, I've got an email from certain people who say I had X number of tickets I wanted to unload them. It's, you know, below face value. As I said earlier, fifty bucks, I put them up as soon as I go at fifty bucks, there's a bot that will offer the ticket marginally cheaper. Well, I think it depends on the supply and demand dynamics in that moment. If no inventory is selling, then yeah, the bot will likely lower the price because they're just

trying to liquidate it. Right. If you've got some demand coming in, then that broker definitely doesn't want to lower the price because he knows that he can make a lot more than you, and he might buy your ticket from you. Well, this begs the question of how many shows? What is the demand for certain shows? We all know that there are certain there's a thin layer of shows

where there's unbelievable demand. Yeah, okay, then on these other shows when ticket because we know, if you go out like on jay Z is on tour right now, okay, you want to buy a ticket in anywhere in the building, there are tickets available. So one would say the people who own those tickets were speculators, correct, if they were on the secondary market. Some probably, some probably were. I don't know the specific dynamics, but yeah, if people are

reselling tickets, then there's probably some speculators. It's also probably some people who just bought. Remember we're putting tickets on sale now, sometimes eleven months beforehand. I don't think that happened the case of jay Z, but you know, there are some people who buy tickets. They have no idea what they're doing on you know, October eighteen, and time comes and they got to resell the tickets. So there's some totally legit reasons why why tickets would be resold

in the secondary market. Like I wouldn't I wouldn't touch the jay Z situation other than to say, um, yeah, I wouldn't touch it at all. Your question is about is about are there is there a lot of speculative buying that happens in concert business. Yes, And when you see a lot of tickets that are um at low dollar value in the secondary market. Does that generally indicate that maybe there isn't a ton of demand? Yes? Does

that mean that the artist isn't making a ton of money? No, because, um, because you can optimally price a whole bunch of great seats, and you know, the marginal return on pricing a ticket at ten bucks versus six versus twenty in the upper deck is generally pretty low when somebody's paying hundreds, if not thousands of dollars in the front. Yes, but that's a very inside view in terms of the business the promoter, the agent, the act, etcetera. But peep, there's a lot

of opacity, uh to the end buyer. And the question is as the what do we know? It's stub hub, which is the giants of secondary sites. People have learned rather than buy the ticket a year in advance, wait to find out if they can actually go, and they're willing to pay more to get a good seat. So the question is does this undermine the monolith that the promoter at a an act have built. I don't think so.

I just think it changes the risk curve. I mean, then it becomes not unlike sports, right, well over fifty of secondary activity at this point is happening in the last forty hours, and so that's just that's just that's fans being conditioned. That's what happens over time when fans know there's tickets available, So inevitably, in the last forty eight hours before any event, there's a staring contest between a whole bunch of demand that wants to go and brokers who are going, Am I going to get my

number or not? Right? And you can always see who blinks. If prices hold, it means that fans are blinking, they want to go. If prices don't hold, it means that brokers are blinking and they're just trying to get you know, they're just trying to get their their their tickets cleared. So I don't think. I think what's interesting is now, um it gives the artist and his business partners, whether that's the promoter or somebody else, it gives the artist

an interesting decision to make. Um, do I want to just lock in money now and put tick it's up for sale and be a little bit less concerned about exactly who's buying them and whether they get resold but I get guaranteed money and I know it's in my pocket. Or do I want to start to think about, um, challenging what an on sale is. Do I need to put all my tickets up front for sale, you know, up front eleven months out? Do I want to wait until I have a better sense for what the market

looks like. Do I want to control supply a little bit more and release those tickets in a different way? I think, you know, look, I think in broad strokes, we can probably all agree that um that uh, you know, the traditional first come, first serve on sale put everything on sale months and months before the event probably isn't the most efficient way to optimize pricing in the venue.

It is probably the best way to defray risk. But artists and their partners and concert promoters are getting way smarter about how they price the show itself, and so that gives them a bunch of options to maybe hang in there longer and wait and and and be able to to make sure that the product that they're selling is being priced at the intersection of supply and demand, which is what this is about. Okay, So why are

tickets being sold a year in advance? Well, I think in general, Uh, my observation is that, uh, you've got some artists who are like, we are hot right now, let's put these tickets on sale and let's capitalize while we can because you never know. And um, that is basically an artist making a decision to offload risk um or capitalize on on you know, the state of the brand. Maybe that's maximizing inventory because they think they're their brand

is going to go down. Um. I think in general that's about hey, let's get this, let's get this this uh this revenue stream locked and loaded. And you know it's hard it's hard to blame an artist for that when now their money is coming from that tour. You can see how that artists would say, let's make sure that we are locking this in and and uh and and if that means that I, you know, I lose out on five what I could have made, That's okay, because I'm really happy to make this money and lock

it in. What about the float that they have the uh customers money for a year. Well, you know, nobody's nobody's forcing a fan to buy that ticket, right, So I think if played right, um, you can give an advantage to those fans who are passionate enough to do that. Well, I guess they're saying in the promoter's mind, to what degree of the tickets going on sale a year in advance because they could hold onto the money. Well, I'm

not a promoter psychas to that. But when you put money in the bank, does it generally appreciate over time and you know you earn interest on it. Yes, But at the end of the day, it's it's the consumer's decision. Is it worth it to me now in this moment to buy a ticket for a year from now? Yes? Or if not? Uh. Generally a fan gonna say yes

if you're offering them a great seat at a great price. Okay, if you're not doing that now, fans are generally educated enough to know that I can wait until forty eight hours before the event and I'm going to get a ticket. That is you know, every fan, Look, every fan falls on a graph. Cost of seat on one, access quality of seat on another. Every fan is a point somewhere on that graph if you just go math on it,

and so uh. You know, from a fan's perspective, the question is when's the best moment to get to find my point on that graph right, and increasingly it's becoming in those last forty eight hours. Now, the unique part of this industry is it's supply driven. There's only so much supply. It's not like we're going to go make another you know, uh, two thousand U two tickets or whatever it is. Um, there's only it's it's only this night,

right and and so um. You know, with better data, incredibly smart tour promoters like you know are theur Vogel for you too, are gonna make really interesting decisions about how they release that supply and and and put it on sale. I think the gap historically has been we don't really have the information to price this ticket properly, and maybe we don't even have the distribution channels to reach the consumers in those in those right moments. And I think that's a big part of the progress that

the industry has made over the last decade. Okay, let's just talk about an arena show, and I'll use the large arena. Let's call it twenty thousand tickets. When how do they actually do twenty thousand tickets? Are those available for sale? Well, you're asking the wrong guy, because I'm not a tour promoter. But but what I can uh,

are they all available for sale? They need to sell Listen, there's I guess what I'm saying is just when you start with twenty thousand, you can chop off a couple of thousand for what are so called senate seat season ticket holders in the building, okay, and hold backs, So even when you go on sale, there's notts. Yeah. I think like the State Attorney General in New York did a did a sort of reveal on this about a year and a half or maybe two years ago, where

they looked at a bunch of data. They they you know, foyed a bunch of a bunch of seat manifests and so forth, and and there are some situations in which, yeah, for for an on sale, uh you know, half of the half of the arena wasn't going on sale. Um. And I don't at the court, I don't have a problem with that. In principle. I think the question is what do we communicate to the fan about their likelihood

of getting tickets in this moment. So let's say there's a certain number of people who are locked into the building for every event. Then for tours, there's the fan club, and there's also a credit card company can explain those presetts. So so yeah, there there are a lot of pre sale lists that are out there, whether the building has a deal with American Express or you know, Chase car and anybody who owns one of those cards gets access to a select pool of inventory, so they're basically fishing

in a smaller pond. Um. The venue sometimes has its own list, the artist fan club sometimes has its own list, and those uh, you know, not unlike an Amazon Prime member gets benefits. Um. There are people that venues and artists have that they take care of because because they've they've achieved some sort of status, right. Um, And again

that seems like normal business to me. What doesn't seem normal is the way that historically it was communicated to the fan about what their odds were of getting a ticket in the moment. And I think a lot of that is starting to change. Uh is starting to change. Okay, So, as you know, I've talked to some of these promoters. They can have an arena where fewer than a thousand tickets are available at the traditional Saturday Saturday morning on sale. So what we hear from the average concert goers, I

can't get a good seat at face value. Forget that a number of concert goes are delusional because everyone believes they should be able to sit in the front row for free price. Um, what is the best way to tackle the problem of getting the so called fan into the seat at whatever the price is? Yeah, I mean

you're right that. When there's two million people who want twenty thousand seats, and by the way, those two million people all want the first twenty rows, you're gonna have you know, one million, eighty thousand disappointed people, and then another you know, eighteen thousand disappointed people who did get exit tickets. So it's a tough business in that regard.

There's two weights. Look, I think about solving the problem like the um like the animated uh lady in the Tramp movie where the two dogs are eating the piece of pasta all the way and they meet in the middle. There's two sides to it. One is, um, how do

we price the inventory? Right? Let's stop pretending that the ticket isn't worth what it's worth, and either you're going to charge the fan what that ticket is worth, or a bunch of capitalist arbitragers are going to come in and figure out how to get ahold of that inventory

and resell it. That's what happens um and the only there's only one way around that, and that is if you make a ticket absolutely locked, tied to identity, non transferable, and say, Bob, I'm going to sell you this ticket for twenty dollars that could be resold in the secondary market for two thousand, but the deal is for this ticket, you're gonna spend twenty bucks. That's the benefit to you. The metaphan to me is I know it's you, Bob,

who walks through the door. And by the way, if you can't go, maybe I'll give you a refund up until a day or two before the event, because I got a line a mile long of people who want to pay only twenty bucks. But but that's one way you handle let's stop you price it. But let's start there. The so called paper lift ticket. Now, what do we know? Miley Cyrus went on and all these parents could get went out people, all these parents couldn't buy their kids tickets.

Then they went out paperless and found out the man was not as strong as they expected. You know, there are some people say sell the good tickets paperless. What is holding back paperless. Is it the government, the fan or the act I don't know that anything is holding back paperless. It's an option for the it's a tool for the artist to use. I mean to forget about paperless.

It just restricting transferability. Is a tool for the artist to use as a way of getting a ticket that is probably below face value into the hands of the fans that they want to have. Uh, get that ticket now, I think, you know again, one way to approach that problem is to price the ticket right. The other way is to try to do something about filtering out the bad actors who come in and snap up those tickets,

you know, basically by cheating. And I think there's been a lot of documentation about the role that bots play and in buying up tickets today. But if you look at spam, you have the best minds on it, and for twenty five years we still have an email spam problem. As long as the tickets are priced below fair market value. Can you get rid of the so called box or

whatever they invent to get the best inventory. I don't know, But um complaining about it and not taking a shot at trying to do something is probably the dumbest thing we can do. But my question is, is it is the best solution that the primary ticket seller like Ticketmaster, like Access price the ticket at what it's truly worth. Well, remember that those the primary ticketer is not setting the price.

It's the artist in the promoter right the I was CEO Ticketmaster, I never sold, I never dictated what the ticket price was. We get told by the client. You know, in that moment, of course, what the ticket price is going to be. Yes. Number one, The best possible way to to eliminate that activity is to price the ticket at the intersection of supply demand. Yes, and I think there is um. Just think about it from a business perspective. You don't always try to shake as much money as

possible out of a customer on a single transaction. Amazon thinks about the lifetime value of a customer, and so they think about how do I give you some value with every purchase so that instead of instead of spending uh, you know, two dollars with me today, which I could probably get you to spend, um, I'm going to have you only spend fifty dollars, and over the life cycle of your experience with me, you're gonna spend dollars right, that that's the idea, And so I think there is

something um not just noble but smart business sense to building the lifetime value of a fan, especially in this day and age when live income is so important to artists. Right, So the idea is, can I get that sixteen year old kid who can't afford the two thousand dollar front

row seat or first twenty row seed. Can I get that kid in the venue for a massively reduced fee because I know that she is going to grow up and make millions of dollars and over the course of her lifetime, she's going to spend a hundred thousand dollars or fifty thou dollars or twenty dollars with me. That to me is something that I feel like the artist has the right to be able to control. And the question is, is is their technology that we can give to the artist as a tool to help them give a

ticket below face value to a fan. One way to do that is to restrict transferability. The other way to do that is to try to create a net that catches the bad actors. So what's the status of that net today. Well, there's a couple of companies that are that have tried to do that, you know, the the verified fan product that Ticketmaster has done them. You know, song Kick had had a product. I think there's some

others who are working on that. And look, I'm biased. Uh. You know, Adam Baine, the CEO Twitter, introduced me to the guy who's the chief data officer a ticket Master, and I hired him, and probably the first meeting, he walked in with a graph that showed probabilities of every request on the system being a broker or not and said, I think I can solve this problem. So you know, there's a whole bunch of people who have worked on that sense and long since I left, and they're doing

you know, a whole lot with that product. Um, I'm biased, meaning like those are my like I I of course agree that that's a an approach. Um that is that is worth investing in and is it going to be you know, is that app And now I'm speaking just generally about about the approach And again there's a lot of companies that are thinking about this. Um is the approach going to be fail safe right out of the gate?

I don't know, but boy, I really commend to anybody who's trying to do something to shake up the traditional way that we distribute tickets, Like think about it this way, Um, when two million people want twenty tho tickets, probably the least efficient way of distributing that inventory is first come, first served. Like that's a that's a very usable UM

distribution vehicle. If you're selling TVs at Walmart on Black Friday, you know, you know, next week, Like, first come, first serve people can line up at Walmart and they trample each other trying to go get you know, cheap Samsung's. That's not the best way to create an online and mobile you know, distribution experience. So UM, if you can slow it down, if you can identify, get to know all of the people in line. Why do we only

know the first people who show up in line. Let's get to know all two million people in line and then make some decisions based on a set of business rules around who gets access to that inventory. That feels like a and more fair, be a more enjoyable experience, um for everybody involved. And I think some of the products that you're seeing out there are just the first full ray into making that happen. So verified fan live Nation is going on with Live Nation and Ticketmaster how

well it's working. Do you believe it's working as well as they say it's? It's not for me to say. I think it's it's really not for me to say. I again, I am biased in that I'm rooting for those guys, and it sure looks to me, um like, there weren't a whole lot of tickets. You know, there were obviously tickets on StubHub for the Springsteen show, but but it's sure you know, there wasn't have the house, so um uh, you know, I those are my guys over there, working hard and and I'm cheering for him.

So as we march forward the best way to get the fans in the building. We have certain options we have. You can't transfer it. One, you can price it according to its value. Three you could have this net. Okay, Now this seems relatively complicated to me. Are those the paths we're going down? Or is there something in the future that's going to solve this problem? I mean, how do you solve supply and demand if you believe in capitalism?

I mean, no, those are the options, and you know the hurdles in the way of that are you know, I think there's probably some some stakeholders in the industry who get nervous about restrictions on transferability. There's some stakeholders in the industry. Yeah, look, you know it is an arms race. And I guarantee you that you know when song Kick did their um you know, their equivalent product

on the adel ship. There are people who have five burner phones in India and a bunch of social profiles and you know who are thinking about how do I basically create a fake identity? And it's gonna be you know, there's gonna be times when the when the defense is winning, and there's gonna be times when the offense is winning. And I'm sure that that that's how it will work

in our industry. But if you look at it, Let if you look at like buying electronics, TVs, stereo equipment whatever, it used to be that you went to the store and it was kind of like buying a car, you haggled over the price. Now you go online and there is a price and you can possibly get a slightly cheaper price two percent or something if you're not willing to buy it from a traditional retailer i e. Walmart, Amazon, etcetera. How come we don't have the same thing in tickets,

and I think it's coming. I think the problem historically has been data and and you know that was one of the most important things that I focused on a Ticketmaster. I know they have considered that. I mean I heard, you know, you asked me about that startup a guy that I worked with at that startup in San Francisco.

I hired a ticketmaster to run live analytics, start live analytics and and run it, which was a business built on how do we capture a bunch of data and help teams and artists make better decisions about their fans

and how they price their inventory. And it sure looks to me if you just take a step back, um and now again not talking about Ticketmaster, but just generally speaking in the industry, it looks to me like value is accruing to the people who put tickets on sale first, away from people who are trying to resell tickets, which is to say, I think we're getting smarter about pricing. And it takes time. You've got to build up a historical data set, and you've got to put in place

the tools. But generally speaking, I think artists and teams have much much better information I mean, uh, than than than they did even even three years ago. And and you know, uh, the sports teams in particular have highly sophisticated teams of three to ten people who are in their offices all day long. They're just thinking about building the most sophisticated pricing models they possibly can. Right there's sixty five thousand seats in an NFL stadium. Each one

of those seats ostensibly has its own value. It's kind of the same way at a concert. And even still in the music business today we basically put three different price levels of tickets on sale. At least in the sports business, we've gotten a little more sophisticated in that. I think the music business is ready for that. I think they're smart enough to do it. I think now they just have to condition the fan to get ready

for that. And the secondary market helps in that capacity, because today, when so many people buying the secondary market, they don't show up and turn to the guy next to them and go, hey, how much did you pay? Oh you paid a hunter bucks less than me. Oh, I'm angry. There's sort of condition to the fact that you sometimes get a good deal, sometimes you get a bad deal, And and so you know, that's sort of

the natural progression and evolution of our industry. I think is is that as you acquire more data and build up a sophisticated internal sort of analytics function, you can start make better making better pricing decisions and maximizing the intersection of supply and demand. So getting back to the point you made earlier, Yeah, when there's six dollar seats on StubHub. You know, if if a tour is massively hot, would you expect that every seat would be sold? Yeah?

But does that mean that the artist isn't hitting it out of the park and optimizing the revenue and making a bunch of money. Uh, it means the artist still probably is because those aren't mutually exclusive things. Okay, just going uh to slightly different matters the NFL. What's the

future there? Don't get me? I mean, look, I don't I don't have an answer right now other than you know, I'll say this on the inside, UM, I have never seen as much UM I don't want to see distract focus on a series of problems and challenges, uh, and ideas and conversations about that are sort of core existential things to the league as as we have this fall which is to say between you know, I mean we

we we live in Los Angeles. We've got a lot of people around us who cannot even believe that there's any issue with the anthem protests. Well, you know, regardless of where you fallen the issue. And to be clear, I fallen the issue supporting the players right to do this and understanding that it's a protest against a bunch

of social injustice. But there are a lot of folks who have who have seen it another way or sort of believed propaganda that it that that it's geared towards something else, and and they're real business effects on the league, right, But the Wall Street Journal did a study and they said they found that there was no reduction in viewership as a result of the Yeah, but the Wall Street Journal isn't answering phones from angry season ticket holders and

sweet holders. And that's not to say that those people, right, I'm just saying it's a real issue. It's a real business issue, Okay, but that's a temporary issue. What about the ct E I E concussion, Luke Garregg's disease. What degree do you think that will have a negative effect on the league. I think I think, who the hell cares what I think. I'm not a doctor and I'm

just an idiot. But but the the the answer is, I think there are a bunch of existential issues with the league right now, and so everything uh that you're seeing play out in the press, from health issues to the anthem stuff to you know, the breujaja over over the over the commissioner and so forth, I think are all symptomatic of a league that's really trying to chart a new course. Now, I will say this, there are really smart people who are involved in this who I

think don't get enough credit. Um, whether it be the owners, some people work at the league, so and so forth for how they think about this. You know, the nuance of the challenges ahead and um, and so this is a whole lot of words for me to sort of duck. The answer is, I think the NFL has a whole series of challenges that um that we're inevitable and we'll see if a bunch of smart people who who understand

the issues better than I can can weather the storm. Now, if we look at concerts, concert ticket prices have gone up dramatically since the Eagles health reeze is over, tour of the mid nineties, but we did see a reaction in the year when people didn't go the contract. Ticket sales going to continue to go up in a world wards focused on experiences or what are the challenges we face there? Well, I mean the music industry is doing right right now, isn't it. I mean it's hard to

find a business that isn't doing well. And so, you know, you look at Universal. I'm not picking on Universal, but you look at a record label that says, hey, we're back, everything is going great. I don't was that the result of management decisions or is that the result of you know,

Spotify right and inventing a solution for them? I don't know what I'll say in the live businesses, you know, I certainly by the by drink the kool aid and by the argument that in a world in which we are so focused on our devices and looking down, we have so many solitary experiences. Um. Just getting back to

sort of me and what drives me. I believe that we are chemically wired to interact with each other, and that you know, so much of retail now is being converted to places where people can congregate, and so I think the idea that, um, we need, we need opportunities to come together and be in a moment. And that's fascinating to me that I've always been fascinated by the energy of the crowd and so, um, you know, I'm always going to be probably overly optimistic on on the

opportunity there. Well, thank you Nathan for illuminating all these issues about ticketing in concerts. So you've been listening to Nathan Hubbard opine on the state of ticketing and State of America. It's been a very edifying experience. We have much more to cover, but we'll do that in a subsequent podcast. Thanks again for attending the Bob left Sets podcast. Thanks for having me. Hi, this is Bob left Sets. I want to thank you for being a fan of

my podcast. You can email me at Bob at left sets dot com and let us know what you think and suggestions. We're open to alle ideas. Be sure to subscribe and tune in iTunes or your podcast player of choice. Can think of in reason and don't know reason