LOS ANGELES (VIP NEWS) — Ticketmaster informed its affiliate partners in an email on Thursday that as of October 15 it will no longer pay commissions on affiliate sales.
The affiliate program still exists and Ticketmaster will continue to provide affiliates access to its concert database. That program has long paid a small fee (about 1% to 3% of the ticket price) to third parties whose traffic to Ticketmaster.com resulted in a sale.
“This was a difficult decision to make, as we recognize the fiscal impact on our affiliates,” the company stated in the email. Indeed, affiliate revenue is important to companies that provide concert listings and collect a small fee for sending traffic to their ticketing partners.
The company had recently made other cutbacks in its affiliate program. In July, Ticketmaster cut some of its smaller affiliates and stopped paying commissions on tickets sold during pre-sales.
Some insiders Billboard spoke with feel Ticketmaster will look to keep paying some of its bigger affiliates. Such a move would help drive traffic to Ticketmaster.com and would address increased competition from smaller competitors. And the move could precede changes to the way Ticketmaster markets its events. For example, if the company launched new social network features that reduced reliance on third parties and cost-effectively drove awareness for events, Ticketmaster would have less need for affiliates to drive traffic to Ticketmaster.com.
This latest move confused some industry insiders. While Ticketmaster’s desire not to pay an affiliate fee is understandable, people in ticketing and other areas of e-commerce agree that affiliate programs are an effective, cost-efficient way to get third parties to drive traffic and help incremental sales.
One executive questioned the logic behind the move. “With over 40% of concert tickets going unsold, and the primary driver being lack of awareness, is now the time to cut back on additional distribution?”
In addition, some people believe former affiliates will begin to put more emphasis on driving traffic to secondary market sites. StubHub, for example, currently pays an 8% commission on concert tickets and a 7% commission on theater tickets. Razorgator pays a 7% commission on any ticket sale.
Ticketfly, for example, just launched its own affiliate program last week and is using the demise of Ticketmaster’s program to gain affiliates.
“The decision for Ticketmaster to slash and burn its affiliate program is emblematic of the old school thinking that plagues the live music industry,” Ticketfly CEO Andrew Dreskin said in a statement posted at the company’s blog. “They have consistently taken a command-and-control approach that alienates the music community: fans, bloggers, promoters and now developers.”
According to Billboard.com