Business News Live Business

Is last minute ticket discounting good for the music industry?

By | Published on Tuesday 1 November 2011

Festival Republic

Festival Republic chief Melvin Benn has told Radio 1 that he expects an increasing number of live music promoters to start using Groupon style discount sites to fill out capacity on tours, though he vowed to never use such a method with his own events.

Radio 1 Newsbeat explored the concept of putting unsold concert tickets on sale via discount websites after Live Nation made a reported 5000 tickets available at vastly discounted prices via Groupon and Travelzoo for the current Britney Spears tour. Meanwhile another Live Nation company, Ticketmaster UK, has launched a new website specifically to promote discount deals.

The last minute discounting system works best for artists who are arena tour level, but who don’t automatically sell out every time, with average dates probably at 80-90% capacity. If said artists have more casual fans, who won’t automatically pay for tickets but can be persuaded if they are getting a last minute bargains, Groupon type websites provide a useful platform for ensuring a full house on the night and bringing in a little bit of extra revenue.

There are negatives, of course. First, there is the stigma of making tickets available this way at the last minute, basically admitting that the artist can’t sell out the venues they’ve been booked to play. Second, last minute discounts penalise an artist’s more dedicated fanbase, who rush to buy tickets the day they go on sale, possibly damaging the all important artist/fan relationship. And third, there is the risk music fans get in the habit of waiting to buy tickets on the hope there’ll be last minute discounts, even though they run the risk of missing out on tickets altogether.

But the more artists use Groupon et al the less stigmatised the system will become. Balancing last minute savings with early-bird and mailing list discounts may placate more committed fans. And providing there is a bit of unpredictability regards what events will ultimately sell discounted last minute tickets, a sizable part of the market may not want to risk missing out and will still buy early.

Speaking to the Beeb, Benn said that the last minute discounted tickets system “undoubtedly works”, adding: “It’s definitely emerging, in tough economic times people will look at varying ways of pricing their tickets”. However, he added that in his own business – the festivals space – he’d be too concerned about consumers starting to expect last minute discounts, and therefore damaging early sales, to go the Groupon route. He concluded: “People would come to expect it year on year and it would damage the viability of the festival in the long-term”.

The live sector seems divided regarding the last minute discounts approach. Some fear the negatives can’t be overcome as simply as the discounting promoters believe, while others think last minute Groupon discounting, coupled with early-bird discounts, constitute the more dynamic approach to ticket pricing some have long argued the live industry needs.