Op-Ed: Wal-Mart Enters Ticketing – By Bob Lefsetz


With the death of the CD, the Fayetteville, Arkansas company has decided to deliver what the public truly wants, tickets.

Aware of their failed online music strategy, said tickets will only be available in stores, delivering what Wal-Mart truly wants, foot traffic.

Shows will be offered on an act by act basis, everything will not be available. Rather, Wal-Mart will pick and choose which performers it wants to work with. And in exchange for making this deal, the Arkansas company will deliver tons of promotion, and cash.

First act to sign on the dotted line?

Bon Jovi.

Bon Jovi has been criticized for scalping its own tickets. To the point where fan club members have been complaining on the band's boards and the act has been removing these posts. It's a no-win situation. Bon Jovi wants all that secondary market revenue, but does not want to appear greedy. In this case, Wal-Mart has guaranteed the spread. After months of negotiation with Rob Light, Wal-Mart has determined exactly how much money Bon Jovi got from scalping its own tickets and is paying the act this sum. The band's next tour will be advertised in all Wal-Mart flyers, and Bon Jovi stores will be constructed in each retail establishment, where one can buy band merch, musical products and DVDs of the filmed entertainment Jon Bon Jovi has participated in. Rumor has it that live DVDs of each show will also be sold in Wal-Mart, but I have not been able to confirm this. As Michael Rapino has so often said, the Live Nation venues have been fitted with hi-def video equipment, so this could be easily done. And further foot traffic could be garnered at Wal-Mart. But the sticking point has been how big a piece Live Nation gets.

Tickets will go on sale starting at 10 A.M. You must be present to purchase. There will be no telephone sales, and no online sales. You will be limited to two ducats. This is why Bon Jovi rejected Costco's offer. Costco insisted on bulk purchases. With each buyer purchasing a block of twenty tickets, more than any individual can use, at a very cheap price. Costco saw this as a consumer give-back, that it would deliver pandemonium at its stores and burnish the brand. And was willing to pay Bon Jovi handsomely for the privilege. Double what Wal-Mart is ultimately paying. But Bon Jovi nixed this plan, even though the end result would be the same as today, with most of the tickets ending up on the secondary market.

To prevent resale of Wal-Mart tickets, every entrant at the gig will have to provide a Wal-Mart sales receipt from the date of ticket purchase. The original plan was to require a $100 minimum total in addition to the ticket price, insuring Wal-Mart's ultimate gain, but this was scrapped at the final hour. Other anti-scalping strategies have also been devised, but they won't be revealed in advance. Industry insiders believe once scalpers are left with unusable tickets, the secondary market will decline.

It is envisioned that the lineup and sales process will be an event unto itself. With people camping in the parking lot overnight. Wal-Mart will sell hot dogs and soft drinks, but no beer. It will be just like the old days, but you won't have to bring your own provisions. And Wal-Mart will be selling tents and sleeping bags to make the wait more endurable.

In a bidding war, Viacom has beaten out Disney to gain the right to provide entertainment at the lineup. The goal is to break Disney's stranglehold on the development of new acts. Each on-sale will feature live entertainment from a Viacom act. Yes, Viacom is going into the "record label" business. By signing a 360 deal, you will get not only recorded music sales and these live gigs, but tons of TV exposure. With its cradle to grave strategy, Viacom can deliver eyeballs for kiddie acts to has-beens, from Nickelodeon to MTV to VH1.

Second in line after Bon Jovi? KISS! The KISS advance is much lower than the New Jersey band's, but there are numerous side components. You cannot buy tickets alone. You must also buy authorized band merch, a minimum of fifty dollars worth. Anything from t-shirts to action figures. Or, you can make a down payment on a KISS Kasket.

Irving Azoff has gone on record that it is not Ticketmaster's goal to be monopolistic. He has no problem with Wal-Mart entering the ticketing business. He believes it will reduce the D.C. heat and grease the way for the Ticketmaster/Live Nation merger to be approved. He is releasing Ticketmaster venues from their exclusives when it comes to Wal-Mart deals.

Randy Phillips and Doug Morris were seen lunching at the Palm. AEG and Universal may be joining forces. Consolidation seems to be in the air.

Jerry Mickelson and Seth Hurwitz have already put out a press release decrying Wal-Mart's entrance onto their turf. Both have rebuffed similar deals from Target, claiming that it's best to live in the seventies forever.

Not every act will have the privilege of going into business with Wal-Mart. They're interested in superstars. But the tickets of the most famous are the hardest to get, so most people see Wal-Mart's move as a positive step. Then again, years ago, people could only see the good in Wal-Mart coming to their town. Before the behemoth eviscerated the local economy. Will Wal-Mart eviscerate the value of music, leaving the touring industry on the side of the road as it goes on to sell Pampers and other household products? It's too soon to tell right now. But this is a done deal. The fans are going to love being able to finally get the seats they want. Get used to it. April Fools.