Don’t believe recent reports that Amazon is planning to take on Ticketmaster. Amplify has learned that the retail giant is actually working to become a distribution partner with the major ticketing companies – but is having some disagreements over who controls the data.
Here are the facts: Earlier this year, Amazon Tickets hired former Warner Music Group VP Lawrence Peryer to serve as co-head of music for Amazon Ticket from the company’s Seattle office. Peryer and his growing team are building a ticketing distribution system that ties into the APIs of the various ticketing companies — including potentially Ticketmaster — that will push out ticket offers to users of Amazon Prime.
The service will be split into three tiers — Prime Tickets, which matches members of Amazon Prime with tickets from the company’s partners; Prime Experiences, which connects Prime users with special events; and Prime Events, which includes small concerts organized by Amazon for Prime members. It’s similar to what the company has offered in the U.K. with Prime Live Events, according to IQ Magazine, with a members-only show by Blondie on May 23 at the 750-capacity Round Chapel in Hackney, London and several special performances by Robbie Williams and John Legend.
What Amazon is not doing is building out a box office software suite for venues that would compete with the primary ticketing companies. What they ARE doing is creating deals with various ticketing platforms to pull inventory and work directly with content owners to market tickets to Amazon’s 85 million subscribers, according to recent Consumer Intelligence Research Partners — that’s a 22-million subscriber increase over this time last year.
There’s a lot of talk that Amazon’s advantage is that it can couple merchandise with ticket sales, but here’s the dirty little secret on that: Amazon’s site is rife with bootleg band gear (like this, and this, and this….oh and definitely this). Live Nation is one of the biggest merchandise companies in the world and license holders of intellectual property. If Amazon is serious about making a merch play with ticketing, they have some serious housecleaning to do (i.e., stop selling all the bootleg gear from China).
There are also apparently some disputes between the two companies over data and who controls consumer information. Whether or not that can be worked out is unclear, but a failure to reach a deal with the primary ticketing giant would seriously curtail the inventory available to Amazon. As one person familiar with the talks told me, “you have two major companies who are used to doing things their way, trying to impose their will on each other.”
An eventual deal fits in with a move by Ticketmaster to open up its platform to distribution partners that include secondary site Gametime and retailer Costco. AEG’s AXS tickets also recently announced distribution partnerships with Costco, Gametime, Groupon and Goldstar.
What’s not happening, at least not now, is a “Goliath vs Goliath” fight between Ticketmaster and Amazon that would disrupt the U.S. exclusivity model where big companies like Ticketmaster, Eventbrite/Ticketfly, AXS and many others pay upfront money for the rights to sell tickets on behalf of a venue. Upfront royalty payments — which I’ve referred to in the past as the “pay day loans of the music business” — are certainly flawed and lead to higher ticketing fees, but isn’t in serious jeopardy of being disrupted.
Amazon is not trying to sign away big arenas and music venues from Ticketmaster. Yes, Amazon has the opportunity to disrupt the space, to improve the customer experience, to do something about annoying ticketing fees and teach us new things about the consumer we don’t already know, but it’s not a Ticketmaster-killer.
The fact that the financial media is reporting Amazon as a serious rival to Ticketmaster, leading to a drop in Live Nation’s stock price, is a bit astonishing. Wall Street and the financial community view live entertainment in a myopic box and this episode is a testament to their short-sidedness and a partial indictment of how much these guys get paid.
But I digress. Bottom line, Amazon is pursuing a distribution deal for tickets and not creating a primary box office software suite. They might be in a disagreement with Ticketmaster over data, but if Amazon wants to move forward, they will have to work it out. For Amazon, the goal isn’t to take over box offices, it’s to increase the number of people who use Prime. That’s really it. Everything else is #FakeNews.
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