News Summary Writing
Exercise
Below
you will find an article that appeared in Billboard magazine, followed by an
abstract of that article. Read the full article and then review the news summary
that follows. After getting a sense of
what makes a good news summary, read the article, “The
Future of Ticketing.”
All MGT 310 students must write a news
summary about this article using the same format, length, and style. Submit your completed article news
summary at
http://www.entertainmentmanagementonline.com/cs
by Tuesday at 1 p.m. This will be the only week in which
all students will review the same article.
Directions on how to submit precede, "The Future
of Ticketing," below.
Actual Article
It's Not Easy Being Green. By: Christman, Ed, Billboard, 00062510, 5/12/207, Vol. 119, Issue 19
Retail Merchandisers Mixed About Environmental Packaging Initiatives Introduced At NARM
When talk at this year's NARM convention focused on new environmental packaging, as it did in a closed-door meeting attended by leading accounts and major distributors and in the bars afterward, the discussion wasn't just geared toward stimulating CD sales--it was also a centerpiece of a developing industrywide "green" movement.
Artists clearly appear to be backing green innovations--on May 29, Perry Farrell's new Columbia album with his band Satellite Party, "Ultra Payloaded," will be issued in a recycled-paper Digipak; the carbon dioxide used to make and ship the disc is being offset with contributions to renewable energy projects. But labels and retailers are onboard as well. At NARM, held April 30-May 2 in Chicago, budding initiatives by nearly every major label were either introduced or widely debated.
• Sony Sales, the shared-services department that represents Columbia and Epic, was touting three different packages for every new release, a retail source says. The eco-friendly "paperback" version would feature either a one-page card or, at most, four pages of liner notes, and retail for between $9.99 and $11.99, the source says. In addition, a standard package would list at $18.98 and a deluxe version for $19.98-$21.98.
The latter package, a digital and physical hybrid, would allow users to access ringtones, wallpapers and other downloads, all of which would be priced accordingly. But retail accounts could only order the paperback version in conjunction with one of the other packages. Initial releases in the triple format are expected in July.
• Virgin Entertainment Group North America VP of marketing Dee McLaughlin revealed at NARM that the chain is converting all its shopping bags and point-of-purchase material to recycled stock. Company owner Richard Branson has been at the forefront of the green movement.
• Warner Music Group, which has launched a companywide initiative to reduce or offset greenhouse gas emissions, reported at NARM that it has also been using ecologically enhanced paper for the last month.
• Universal Music Group has reissued its Millennium greatest-hits series in eco-friendly packages that replace the CD booklet with a single card, featuring only the cover of the album on the front. On the back, a small notice directs the buyer to a Web site to obtain complete liner notes.
• Montreal-based catalog reissue specialist Madacy Entertainment, meanwhile, has experienced a fourfold increase in sales since it began issuing product in recyclable "tin can" containers last fall, according to Madacy CEO Amos Alter. Tins used for Madacy's 30-title Collector's Series hold as many as three discs, each with generic packaging. Such releases are available at varying price points. The budget version, for instance, contains a single disc retailing for $5.99 and features 12 tracks plus a bonus ringtone valued at $2.99, Alter says.
While retailers as a whole support going green, some larger accounts anticipate significant retrofitting costs when they transition into carrying the newer configurations. And with music manufacturers considering streamlined CD packaging, rackjobbers worry that modifying or replacing an estimated $100 million in inventory sortation equipment would also be costly.
"The rackers don't want the new green package too thin or too light," one retail source says. "But that could translate to additional savings in shipping and trucking costs."
Other retailers are concerned that one-card packaging could cut into sales. Without liner notes, says Brian Faber, director of operations for the eight-unit, Phoenix-based Zia chain, such a product could be mistaken for a burned CD. "Packaging absolutely matters," Faber says. "It's part of the perceived value of the CD."
Another merchant expressed concern that, when store customers are directed to a Web site for liner notes, they might also make purchases there from the label, which could hurt physical retail. "I hope the labels, under the guise of green, don't use this effort to increase direct sales to consumers," the merchant says.
"My fear," one account familiar with NARM's closed-door meeting says, "is that the logistics people will win out over the visionary green guys."
Still, retailers largely welcome the changes and acknowledge that they'll have to adapt.
"The green issue is like the longbox all over again," Newbury Comics CEO Mike Dreese says. "There are two stances the industry can take--we can do nothing and wait 18 months and react to a coming negative attack from environmentalists, or we can be truly proactive. The question is: Are we going to man the dykes or build a new bridge to the future?"
By Ed Christman
Copyright of Billboard is the property of VNU eMedia, Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.
News Summary
It's Not
Easy Being Green
(from Billboard Magazine, May 12,
2007)
by First Name Last Name
May 10, 2007
(from Billboard Magazine, May 12, 2007)
After focusing on new environmental packaging for CDs, this year’s NARM convention introduced the concept of developing the music industry into a “green” environment. This convention, which was held April 30—May 2, discussed the issue on moving away from the carbon dioxide used to make and ship the compact disc and considering contributions to renewable energy products. The proposal to change the music industry into a green environment is being introduced or debated at most major record label.
The several record labels that are dedicated to this change are beginning to introduce this concept into the processes of the company. Richard Branson, owner of Virgin Entertainment Group, has been a strong influence in the green movement. Branson’s company announced at the convention the chain will be converting all the shopping bags and point-of purchase materials to recycled stock. After introducing products in recyclable “tin can” containers, Madacy Entertainment, a Montreal-based catalog reissue specialist experienced an increase in sales.
The majority of retailers support the efforts of the green movement; however, several music manufactures are worried about the estimated $100 million needed toward modifying or replacing existing equipment. Brian Faber, the director of operations for the eight-unit, Phoenix-based Zia chain, is concerned with the one-card packaging for products. Universal Music Group has been focusing on replacing the CD booklet with a single card only featuring the cover of the album on the front. Faber’s concerns are on the decreasing of sales, suggesting “packaging absolutely matters because it’s part of the perceived value of the CD.”
Although this problem is causing concerns, retails recognize the importance of adapting to the changes. Mike Dreese, Newbury Comics CEO, believes “there are two stances the industry can take—we can do nothing and wait 18 months and reacts to a coming negative attack from environmentalists, or we can be truly proactive.” This growing concern with protecting the environment will continue to effect practices in current business trends.
How to Submit Your Article:
Using the Writing Guidelines for EMOnline.com (See blackboard), read
the article below and write a 300-350 word news summary using the specified
guidelines. You will submit the news summary at
http://www.entertainmentmanagementonline.com/cs
If you ever have a problems submitting
to entertainmentmanagementonline.com - email your News Summary in the message
body of an email to em@missouristate.edu
Practice Article
THE FUTURE OF TICKETING. Billboard, 00062510, 7/28/2007, Vol. 119, Issue 30
HOW A LIVE NATION/TICKETMASTER SPLIT COULD CHANGE THE CONCERT INDUSTRY
It all started with a seemingly innocuous comment by Live Nation CEO Michael Rapino, discussing the company's 2005 fourth-quarter results on an investor conference call: "By the end of 2008, we should have clarity on ticketing, as our current Ticketmaster deal will expire in December of that year." In retrospect, that may have been the first card played in one of the most closely watched deals in recent memory, the ongoing negotiations between concert promotion giant Live Nation and Ticketmaster, the world's largest ticketing company.
The financial stakes are huge for both companies, but ultimately this is an issue of control: who controls service charges, who controls inventory, who controls the secondary market and who controls the contact with fans.
The culmination of the deal, no matter what happens, could be the catalyst for a sea change in the way artists and live entertainment producers interact with live music fans in the new e-world order.
Whether Live Nation re-ups with Ticketmaster to handle ticketing for its venues and thousands of events, or if Live Nation takes ticketing in-house (as many observers think it will), most who have a stake in this business agree the concert industry at large will be greatly affected.
For Ticketmaster, Live Nation represents a huge client and for Live Nation the decision is about maximizing revenue and connecting with fans. It's a business decision for both, but the live entertainment industry overall seems to view the situation as a "clash of the titans" of sorts.
The attention focused on this deal bespeaks an industry that has sliced and resliced the financial pie many times. "The artists are counting every penny, the promoters are counting every penny, the venue managers are counting every penny," says John Scher, Metropolitan Talent co-CEO and a veteran independent promoter.
"As this [Ticketmaster/Live Nation] decision gets made, everybody else, from the biggest of the other players to the smallest club owners to all of the major independent promoters and all of the sports franchises, are waiting for the smoke to clear," Scher says.
Even more important than the economics could be the ticket buyer data, its inherent value and ownership of the touchpoint. As live performance increasingly is the platform from which merchandising, branding and career development are launched, that touchpoint has more value than ever.
So the music business is watching. "As representatives of artists, we [support] whomever provides the greatest opportunity for us to touch our fans directly, in whatever manner we choose to," says Jim Guerinot of Rebel Waltz Management (Gwen Stefani, Nine Inch Nails). "Be it fan dubs, auctions, VIP, however the artist wants to engage their fans directly, we're looking for someone who will allow us the opportunity to do that in our own way, without intrusion."
The contract between Ticketmaster and Live Nation dates back to 1998 and Live Nation's predecessor, SFX Entertainment. (Venues acquired as part of Live Nation's House of Blues acquisition last year are contracted with Ticketmaster through 2009.)
Ticketmaster struck the deal as consolidator Robert F.X. Sillerman rolled up concert promoters and their amphitheaters into SFX, and the deal held forth when Clear Channel Communications bought SFX for $4 billion in 2000 to form Clear Channel Entertainment.
After Clear Channel spun off CCE to form the independent, publicly traded Live Nation, Live Nation CEO Michael Rapino publicly expressed an interest in tapping into new revenue sources, including concessions and ticketing (Billboard, March 4, 2006).
Since 1988, the volatile ticketing business has changed drastically, with direct-to-fan ticketing, the secondary market, presales and dynamic pricing increasingly common and popular with fans and artists.
Ticketmaster and Live Nation have made moves that seem to enhance their bargaining power. Last year, Live Nation acquired a 51% interest in Musictoday, the acknowledged leader in the direct-to-fan space through artist e-commerce and fulfillment, and artist fan club ticketing. Through Live Nation's acquisition of a stake in CPI, the company also acquired another player in that realm, UltraStar.
Earlier this year, Ticketmaster purchased echomusic, another successful direct-to-fan site, though not of the breadth and depth of Musictoday. Asked at the time if Live Nation's Musictoday deal added a sense of urgency to Ticketmaster's entree into the direct-to-fan space, Ticketmaster CEO Sean Moriarty said, "No, not at all. This is something that we contemplated well before that, and our focus is genuinely extending our platform so that we can offer the best possible service to our clients. It really was internally driven and based on our own focus" (Billboard, March 31).
Live Nation's deal with Ticketmaster allows Live Nation to sell 10% of its inventory in-house, a provision that Rapino felt was underutilized. "In the past, we have not aggressively pursued this," Rapino said in that 2006 investor conference call. "Going forward, we will pursue this opportunity with the benefit of a united brand and a single destination in livenation.com. As we build livenation.com and build traffic and a database, we are confident we can drive our brand and create new ancillary revenue lines."
This seems to be occurring. In the time since, Live Nation has significantly ramped up livenation.com to the point that its unique visitors are approaching 3 million per month, second (if distantly) only to Ticketmaster's 21 million unique monthly visitors as a live entertainment destination.
It's clear that livenation.com wants to be the "go-to" site for live entertainment fans. With a broad venue and event database in place, Live Nation will at the very least have made significant inroads toward the digital infrastructure required to compete on that level. The site already bills itself as the "world's largest concert search engine."
Building up livenation.com would seem a savvy move with or without a ticketing component. "The thing that is becoming clear in a new e-commerce world is anybody who doesn't touch the consumer is making a mistake," Guerinot says. "The record companies realized that if all of a sudden you sell 5 million records and you don't know who these people are and you can't communicate with them going forward, then you've made a mistake."
But the immediate financial issue here is rebates: basically royalties paid by the vendor (Ticketmaster) back to the client (venue, team or promoter) for the right to sell its tickets. Ticketmaster makes its revenue from service charges (roughly 5% to north of 10% of total ticket price) paid by ticket buyers; part of the service fee, typically less than half, ends up as rebates.
Rebates have become a significant revenue stream for all venues that outsource ticketing, particularly large, high-volume buildings like stadiums, arenas and amphitheaters. Rebates can be worth up to $1 million per year for one busy arena, so even scaled down between Live Nation's seasonal amphitheater business and non-Live Nation venues, the revenue is substantial.
Sources close to the relationship say Ticketmaster sells between 14 million and 15 million tickets per year to Live Nation events (music, theatrical, family shows, motorsports), generating about $100 million in service-charge fees for Ticketmaster, which saw revenue of nearly $1.1 billion in 2006.
Live Nation last year slotted Ticketmaster rebate revenue under its Digital Distribution division. This business segment then included Live Nation's third-party ticketing relationship with Ticketmaster, its in-house ticketing operations, and online and wireless distribution activities, including the development of livenation.com.
According to Live Nation's annual report, the Digital Distribution division generated $99 million, or 3% of total Live Nation revenue. Last year, this segment derived the majority of its income--$81.9 million--from ticket rebates earned on tickets sold through the phone, outlets and the Internet, for events promoted and/or produced by Live Nation. The sale of the overwhelming majority of these tickets is outsourced to Ticketmaster, with "no significant direct operating expenses associated with it," according to the report.
Beginning this year, the bulk of Live Nation's ticket-rebate revenue (including fees from tickets sold through Live Nation's in-house ticketing operation) is reported under its North American Music segment, and a portion of in-house ticketing revenue from livenation.com is now recorded under Live Nation's Global Digital segment.
Live Nation is clearly improving its position regarding in-house ticketing, no doubt resulting in part from the acquisition of Musictoday and the build-out of livenation.com. For the quarter ended March 31, Global Digital revenue increased $500,000 to $1.3 million, or a 70.7% increase over the same period in the prior year. The increase in revenue was primarily attributed to increased sponsorship revenue associated with Live Nation's in-house ticketing operations, driven by VIP programs, sponsored presales and other promotions.
Even if their 10% allotment is generating more dollars these days, by far the largest component of Live Nation's current ticketing revenue is derived from Ticketmaster rebates on tickets sold at North American venues owned or operated by Live Nation. The company also receives much lower rebates from tickets sold in third-party venues in connection with a Live Nation event where Ticketmaster or another company operates the ticketing.
As a public company facing the challenges of a cyclical live music industry, massive talent costs, a seasonal and flat amphitheater business and the dicey economics of a consolidated concert business, Live Nation must look at all potential revenue streams and how to maximize them.
Part of that process is determining whether the company should outsource ticketing or take it in-house. Live Nation must determine if it is more financially prudent to run a ticketing business and capture the revenue and information therein, balanced against the cost and sweat equity a massive ticketing infrastructure entails.
If Live Nation were to take its ticketing in-house, it would be able to capture fees that had previously gone to Ticketmaster. But once artists and managers weigh the fact that Live Nation is deriving more revenue from service charges, it could prove difficult for Live Nation to fully protect that revenue stream. In a crowded value chain where all parties operate on narrow margins, no revenue is left unexamined, no piece of pie unsliced.
Of course, artist representatives are already aware that rebates exist, and that venues and promoters get a piece of the pie they do not get. "Agents and managers have responded to that over the past decade or so by tightening the deals knowing--maybe not accurately knowing but at least believing--that the promoters and the venues were making ancillary income," Scher says.
Another question is whether Live Nation has the infrastructure to do its own ticketing profitably. In distributing 480,000 (free) Ozzfest tickets in just a few days in June, Live Nation showed it can handle volume (billboard.biz, June 14). But volume is relative. Live Nation says it drew attendance of 60 million to its 26,000 events in 2006, much of it at third-party venues already contracted to Ticketmaster.
Ticketmaster, on the other hand, sold 128 million tickets last year valued at more than $7 billion, with Live Nation accounting for roughly 10% of that volume. The Ticketmaster model is predicated on scale, and for Live Nation to achieve similar scale at 10% of Ticketmaster's volume would seem challenging at best.
Ultimately for Live Nation the real value in handling its own ticketing is the resulting consumer intelligence. If Live Nation is already selling tickets to millions of people at their own venues, they "would be crazy not to" take control of their ticketing, one industry insider says, given the value of this database to sponsors.
"If they don't move forward and do this, they're basically giving up a huge growth engine, not just in terms of what they make ticketing-wise. That's the small picture," says the source, who chose to remain anonymous. "The big picture is the huge opportunities for cross-marketing, advertising and sponsorship platforms. They have to do this."
For its part, Ticketmaster has in the new millennium used its data to become a powerful marketer of events. "There's no question that for an independent promoter like myself Ticketmaster has become an excellent marketing partner," Scher says. "They have turned the company from just being a nonproactive service company vending tickets to a company that has been very proactive in helping market shows, and I think that's vital."
Many large venues and festivals have done very well by handling their own ticketing, but smaller venues that try to go it on their own are often at a disadvantage, Scher says. "The public is unquestionably used to looking for shows at ticketmaster.com," he says. "We've found when we do shows at [venues with in-house ticketing systems] that, even though these systems are good systems with hard-working people, fans think shows are sold out, don't exist or have been canceled. For the average consumer Ticketmaster has become Coke."
That said, as a promoter Live Nation is a marketer by definition, and has built its own considerable concert-going database. The company continues to show marketing innovation, such as the sponsor-driven free Ozzfest, its own VIP upsell programs and numerous other Web-based initiatives. By owning and controlling the list of all ticket buyers, Live Nation will have information not only of huge value to itself as a promoter, but to sponsors seeking targeted marketing opportunities.
Ticketmaster has long forged its alliances with venues, promoters and sports teams as opposed to artists. Live Nation primarily aligns with artists through relationships with agents, managers and the artists themselves. However, when Ticketmaster parent IAC purchased a larger stake in megamanagement firm Front Line--a stake Live Nation was reportedly desirous of--Ticketmaster created a de facto alliance with artists it has not previously realized to any large degree.
Ticketmaster is at its heart a technology and technological services company that has increasingly delivered value in terms of marketing and promotion of live events. Aside from its hard-fought contracts and investing millions of dollars in infrastructure and R&D over the years, Ticketmaster has not been involved in the risk-taking, or concert promotion, side of the business.
If Live Nation can potentially be in the ticketing business, why couldn't Ticketmaster be in the concert promotion business? As the ticketing model changes and Ticketmaster faces competition on all fronts, surely the company will seek to leverage its deep pockets and marketing expertise to look for an expanded role in the business. It is not that far a step from marketing and promotion of an event to outright concert promotion and risk management.
"[IAC] have made a significant investment in a big management company. There's probably nothing stopping them if [concert promotion] is the business they want to be in," Scher says. "The concert promotion business is a pretty risky business. You can't quantify whether people will come to a show or not. Could Ticketmaster with IAC become promoters? I don't know if it would be out of the question."
At this point, only executives with Ticketmaster and Live Nation, whom declined to be interviewed for this story, know what is best for them.
"As an observer of the industry, what's probably best for us is for them to be able to make a deal," Scher says. "Ticketmaster has built this amazing infrastructure that works very, very well. They're synonymous with concert and sports information; I think the public is trained to go there."
Others believe a new major player in ticketing could be a good thing. "Whether it's in ticketing, venues or promoters, more options wind up creating a more fair market in which to make a decision," Guerinot says. "When you have options, you're always better off as a seller."
Again, Guerinot believes the endgame is about connecting with fans. "It's something all e-commerce models embrace: a direct relationship with your consumer, and get the middleman out of the way so that you can do this," he says. "People who facilitate the direct-to-consumer relationship for artists are of significant value. People who block that are not."
When it comes to signing a new contract, Live Nation holds the pen. If it re-ups with Ticketmaster, it will likely be because it is given more control over inventory rather than a sweeter financial deal. For Ticketmaster, Live Nation is a mega-client--but still only one client as the company expands into new territories like China, the lucrative secondary market and the vast potential of new marketing opportunities.
Copyright of Billboard is the property of VNU eMedia, Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.