Consumer 10.0: Ticket technology - and profit

Joe Spampinato is a lover of the arts and culture, but there are moments when he's not so sure about the accompanying technology.

Twice recently, Spampinato bought tickets online for a local performance. He and his wife, Patty, saw Krista Tippett at the Kimmel Center. Then they saw Kathleen Turner portray Molly Ivins at the Philadelphia Theatre Company.

Each time, he paid not just the price of the ticket, but also service charges: $5 per ticket at Philadelphia Theatre Company, and $6 per ticket at the Kimmel.

Spampinato, a retired aerospace engineer who lives in Newtown Square, doesn't get it. And he's especially galled when he contrasts the ticket purchases with other experiences online.

"We got this big package from L.L. Bean - no charge. Here, they're sticking two tickets in an envelope, and they charge six bucks a ticket," Spampinato says. "My complaint is very basic: I think that those of us who buy tickets remotely via computer or phone at Center City venues are being ripped off."

It's a fair complaint, and one with a very large context - as large, say, as the Wachovia Center, the Linc, or the Meadowlands. For better or worse, those kinds of major venues have pushed the envelope for ticket technology - and profit.

Once upon a time, the cost of ticketing was actually built into the price of the ticket itself. But as call centers morphed into specialty websites and high-tech ticketing platforms, prices were "unbundled," in economist-speak.

The Ticket Service-Fee Train was leaving the station, and even the plainest arts nonprofits clambered aboard.

So, before I share the responses to Spampinato's complaint from the Philadelphia Theatre Company and the Kimmel Center, a little more background might be helpful - just so you understand where this train is heading.

You may have noticed recently that Ticketmaster Entertainment Inc., the dominant player in online ticketing, is in the midst of a controversial merger with Live Nation Inc., a leading venue owner and concert promoter.

Live Nation had recently emerged as a online-ticketing competitor. To merger critics such as John Breyault of the National Consumers League, Ticketmaster found the easy way out: Faced with a new competitor, it decided to buy it.

There's more to this story than just ticketing, of course, and much has to do with the changing economics of the music industry. But Breyault says the ticketing business should be viewed separately because of the particular consumer issues it raises.

"We think if there was more competition in the ticketing market, there would be more downward pressure on fees," says Breyault, spokesman for TicketDisaster.org, a coalition of groups that fought the merger. Some are still fighting in court, even after the deal won Justice Department approval.

The Justice Department's answer was to set conditions aimed at ensuring future competition, including by requiring Ticketmaster to sell off Paciolan Inc., one of its ticketing platforms. One result is that Ticketmaster may eventually face off against Paciolan's purchaser, Comcast Spectacor L.P.

Since Comcast Spectacor is still mostly a local player, Breyault says, it's too soon to tell whether it could help restrain prices nationally.

For a preview, I checked online Friday for prices to Thursday's Carole King and James Taylor concert at the Wachovia Center - a website "powered by ComcastTIX."

Two seats were available for $125 apiece. The extras, including a service fee, order charge, and delivery fee, will add at least $21 to my order - even if I choose the lowest-cost "delivery" option of printing them at home, for $2.50.

Things could be worse, as a look at the Madison Square Garden website - powered by Ticketmaster - illustrated.

There I could buy two tickets to the same tour for just $89.50 apiece. But the fees added on more than $29, including an $11.70-per-ticket "convenience charge" and that same $2.50 for printing at home - with my paper and my ink.

I took Spampinato's complaint to officials at Philadelphia Theatre Company and at Ticket Philadelphia, the ticketing agent for the Kimmel Center that's actually a joint venture of the Kimmel and the Philadelphia Orchestra.

The answer: The Fee Train has definitely left the station. But, hey, it costs money to run a railroad.

"A ticket-handling fee like that is industry standard - and it's standard whether it's on the phone or by the Web or by mail-in," says Debbie Fleischman, spokeswoman for Philadelphia Theatre Company. "It's basically a convenience fee."

Gary Lustig, vice president of Ticket Philadelphia, says its fees are simply designed to cover the costs of running a round-the-clock website and a call center that's open 11 hours a day, seven days a week. Together, they require a staff of about 25 full-time employees and 25 to 50 part-timers.

"We are trying the best way possible to fairly recoup all the expenses of providing ticketing services," he told me.

Lustig and Fleischman are proud of their services' relative restraint. For instance, neither charges customers to print tickets at home. And Philadelphia Theatre doesn't charge anything at all if you buy at the box office. (Ticket Philadelphia charges $2 to buy at the box office for tickets with a face value above $10.)

Lustig offers this, too, as a defense: Access to phone and Internet sales saves people trips to the box office, but at an administrative cost.

"All those other channels didn't replace the original channel," he says. "They just added expenses to the cost of providing a ticket."

I'll buy that logic. But I still don't get why they won't just add it all into the cost of the ticket.