LCD Soundsystem vs scalpers: How online verification could disrupt the music biz

LCD Soundsystem vs scalpers: How online verification could disrupt the music biz

In case you’ve been living in a soundproof cave in Afghanistan over the past few years, then you’ve likely heard of the band LCD Soundsystem with frontman James Murphy, who has won over the ears of music aficionados and dance music enthusiasts the world over.

When Murphy recently announced that the band would be playing their final show on April 2nd, 2011 at New York City’s Madison Square Garden, all hands turned to Ticketmaster. The show went on sale in early February and sold out in minutes, with ticket scalpers leaping from the gates.

In response, Murphy wrote a heart-felt letter to his fans and added another series of shows at nearby NYC venue Terminal 5:

this here is just to say that we were more than taken aback and surprised about the speed of ticket sales for the april 2nd msg gig, as well as the effectiveness of scalper pieces of fucking shit at getting their hands on said tickets before fans could, and it’s knocked us on our asses…

no—we didn’t have a smart paperless ticketing system in place, and no—we didn’t have the pre-sale worked out very well, but this is simply because we’ve never sold anything out so quickly in our lives, and certainly never sold out anything as big as msg…

we tried calling our lawyer about the ticket scalping. “it’s legal”. no joke. it’s fucking legal. i tramped around with friends and band getting insane. i wanted to buy some expensive tickets and then track the seller down to beat him….

so to the point. you can’t make everyone happy, and i’m sure this will wind someone up somewhere….

we’re going to play 4 shows at terminal 5 in nyc leading up to the msg show, and they will include most if not all of the songs we play at msg… obviously we’re going to look seriously at the way we sell these tickets. not “paperless, (i’ve been advised that the “paperless” thing is apparently now illegal in ny… seriously—don’t ask me) but there are some ideas floating around that could be just as effective (though it’ll take a minute to get folks in the door.)…

oh—and a small thing to scalpers: “it’s legal” is what people say when they don’t have ethics. the law is there to set the limit of what is punishable (aka where the state needs to intervene) but we are supposed to have ethics, and that should be the primary guiding force in our actions, you fucking fuck.
and to everyone else: thank you. you rule. don’t let the shitbags win.
i feel like conan o’brien.
-james

After, James Murphy lambasted the secondary ticket market and added four additional shows at Terminal 5 the issue is that they’ve decided to use Ticketmaster’s experimental paperless ticketing system. With this system, you literally can not transfer your tickets what so ever because you have to show up at the door of the show with your ID and credit card in hand.

Here are a few reasons why this is lame:

* What if you can’t make it to the show and want to sell your tickets? Too bad.
* What if you can’t make it to the show, but you bought four tickets for you and three of your friends on your credit card? Guess what, you need to either be there to let them in, or they’re left out.
* What if you totally overslept and missed the on sale for the show, and just didn’t get tickets? Well guess what, there’s no chance of buying tickets on the secondary market from any of the sites, because tickets can’t be sold or transferred.

I’m still unsure how LCD Soundsystem and Ticketmaster are getting away with this ticketless system since last year the NY state government passed a law stating that any paperless ticket event must still offer a physical ticket option to consumers. Obviously, scalpers suck and I hate when tickets are sold out through expensive secondary markets but at the same time– can’t technology save us from these necessary evils?

If done right, the secondary market could be very beneficial to consumers. We just need a little band innovation, the right kinds of secondary markets and the right kinds of online verification from the start.

Online verification for ticket sales

“Paperless tickets seem great for the band, but in fact they are very counter-intuitive for fans. People are so quick to rip “scalpers” for selling tickets at a profit, but don’t realize that a large majority of people selling tickets on the secondary market these days are people like you and me. Plus, over 40% of tickets on the secondary market are sold under face value!” says SeatGeek’s Ben Kessler.

SeatGeek, a New York City startup is an interesting alternative because, while most people are used to just going to StubHub, SeatGeek aggregates the many different secondary ticket markets, working only with trustworthy, legitimate companies. Aside from having a slick, easy to use website, they’re concerned about the fans and go to great lengths to protect anyone from getting ripped off. A site like StubHub handles the transaction, gets the tickets from the seller and ships them to you. But LCD Soundsystem still accused StubHub, a popular secondary ticket market of being ‘barely legal.’ So how can we verify tickets sold online aren’t going to scalpers but still give customers the freedom to sell their tickets at will?

If Ticketmaster or other aforementioned secondary markets were to include a verification like Facebook Connect, OpenID or the recently launched Tru.ly, it could seriously cut down on scalpers. Imagine if Ticketmaster offered verified accounts so users could just transfer the tickets to another user? Sounds easy enough, yeah? However, I have my doubts that Ticketmaster even cares about scalpers, judging from the fact it has its own shady secondary market called TicketsNow. The things you learn…

On the evils Ticketmaster, it’s not even that their ticket fees are insane. There’s also a class action law suit against them because they charge a flat shipping rate of 12$, while they just mail them tickets to you via a 50 cent post.

Meanwhile, in band innovation

“I think the best way to tackle this is to talk about how bands are trying to find new ways to offer tickets to their fans, and that paperless ticketing might not necessarily be the best approach because people can’t transfer, sell or get tickets if they missed out,” says Kessler.

One band that’s had a huge amount of success in the past is the popular hippy jam band Phish, who has continually sold out MSG shows for the past 15 years. The cow funk band from Vermont implements a 3rd party Ticket Lottery system in 2009. Tickets were first available through Phish’s Web site, which reserved up to 50% of tickets for each show for the band to sell itself before making tickets available through Live Nation and Ticketmaster. For those band-sold tickets, which cost $50 a piece before processing fees, Phish fans were able to request tickets to whatever shows they wanted. Lottery style, winners were notified a few months later, and the losers got their money back. It’s always a good day when I can write about my love for Phish.

Interested in how technology has disrupted the music biz? Don’t miss The New World Order of the Music Business. What other rock star ideas have you heard of that can be used to disrupt the music industry? Share in the comments please!

Also, if you’re an LCD Soundsystem fan, be sure to watch this:

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