Pandora's move into ticketing won't end high fees, expert says

If you want to go to a concert, chances are you'll have to use Ticketmaster. The service and its fees have become synonymous with buying tickets. But a new competitor may have finally arrived.

Ticketfly purchase may help connect users with concerts, but won't make them cheaper

Ticketfly was recently purchased by the music service Pandora for $450 million US. (Supplied Photo/Ticketfly)

If you want to go to a concert, chances are you'll have to use Ticketmaster. The service and its fees have become synonymous with buying tickets. But a new competitor may have finally arrived, with the recent purchase of a rival ticketing service.

The American internet radio service Pandora — which is currently not available in Canada — announced on October 7 that it bought Ticketfly for $450 million US. Ticketfly is a distribution service that offers tickets to some clubs and festivals in both Canada and the United States.

For Pandora, acquiring a service like that means it can connect its users directly with local events, according to the company's statement on the deal. For example, audio messages on Pandora could be targeted to listeners in a specific market to help promote a concert, which Ticketfly sells tickets to.

Dean Budnick took note of the deal. He's the co-author of a book called Ticket Masters: The Rise of the Concert Industry and how The Public Got Scalped.

Purchase won't likely reduce ticket fees

He says merging an internet radio service with Ticketfly is a good move, but unfortunately won't do much to reduce ticket fees.

"It will help individual performers connect with new, and I think quite possibly an emerging, fan base," he said. "But in terms of those fans who already are on top of that information and just want to be able to go more often or to see concerts that are less expensive it just, honestly, it just won't offer much to that end."

Budnick's reasoning is based on the exhaustive research he's done on the ticket industry.

Ticketfly says it sold 16 million tickets to 90,000 live events in North America last year.
He said the reason there's a virtual monopoly by Ticketmaster on major shows is because they have exclusive contracts with venues.

But he explained that isn't actually the company's fault.

"It's always easy to vilify Ticketmaster, and I think it's much more complex than that," Burdick said. "It's really the whole system, the whole concert industry collectively — including the artists, by the way — sometimes because they're getting some of those ticketing fees as well."

Ticketmaster's system dates back to 1960s

That system Budnick is referring to came about in the late 1960s, when a company called Ticketron emerged. It pioneered computerized ticketing, and was eventually bought out by Ticketmaster.

Venues wanted to use the computerized method, and they entered into exclusive contracts with Ticketron.

Budnick said it all seemed fairly innocuous at the time, but that system is still in place. And added that for Ticketfly to make a dent in Ticketmaster's business, the system would need significant change.

"You really would need a large company that could again facilitate this direct connection between artist and fan, and would have deep enough pockets to compete with Ticketmaster on a venue-by-venue basis," he said.

Budnick said that would require a company much bigger than Pandora — perhaps a big player like Facebook.

But until that happens, he said we'll have to accept the fees that come with concert tickets, because venues won't start using multiple ticketing companies.