Ticketmaster CEO Nathan Hubbard. Photo: Ticketmaster

Fifteen years ago, Nathan Hubbard and his band Rockwell Church played Austin’s South by Southwest music festival, the gathering of industry insiders and plain ol’ fans who meet each year to catch some of the 2,000 bands that descend upon Austin in search of fame and fortune.

On Friday, Hubbard returns to SXSW once again — only this time as Chief Executive Officer of Ticketmaster. In Austin, Hubbard will face music of a different kind, directed at one of the most loathed companies in America.

Now 35, Hubbard’s career has shot up faster than a Vassar Clements fiddle-solo. After graduating from Stanford Business School in 2004, Hubbard worked at Musictoday, then Live Nation, before last year’s merger with Ticketmaster

That combination created a three-headed entertainment colossus made up of an artist management division, run by Irving Azoff, a concert promotion division, Live Nation, run by Michael Rapino (who also is CEO of the Live Nation parent), and a ticketing division, Ticketmaster, which Hubbard now runs.

On paper, Hubbard looks good for the role: he’s young, a musician and a Stanford MBA. Wired.com sat down with him in New York this week, ahead of his appearance at SXSW for a discussion about Ticketmaster, the role of technology in the concert business, and what it means to become what he calls a “life-long fan.”

In a wide-ranging and candid interview, Hubbard detailed plans to introduce dynamic pricing, paperless tickets, social media tools, and what he called “the science to set the right ticket price.”

Hubbard had harsh words for secondary ticket market StubHub, which he accused of waging a “propaganda war” against Ticketmaster. Finally, he addressed the sensitive and controversial topic of ticket fees, saying it is “critical” that the industry heed calls by consumers that all fees and charges be displayed “right up front in the buying process.”

In contrast to some of the music industry’s Baby Boom-era titans — who ran the industry by God-knows-what-logic — Hubbard is among a new generation of entrepreneurs and executives using science and technology to try to transform hidebound companies and industries.

At the center of Hubbard’s focus, naturally, is ticket price, and he made it clear that the time has come to move beyond the industry’s traditional approach to ticket pricing, which he called “very unsophisticated.”

“We price a bunch of inventory below the intersection of supply and demand, and the preponderance of unsold inventory teaches us that we price a lot of inventory above the intersection of supply and demand,” Hubbard said. “As a rule in our industry, the good inventory is priced too low and the bad inventory is priced too high.”

Heading into the summer tour season, consumers should expect to see as many as 8 to 10 seat price choices and ‘dynamic pricing’

A typical arena or amphitheater concert has three price points, Hubbard said, in contrast to sporting events, which can have as many as 10 to 15 price points. Heading into the summer tour season, consumers should expect to see significantly more seat price choices for concerts — as many as 8 to 10 — in a move designed to price tickets more efficiently.

Consumers can also expect to see “dynamic pricing,” which uses data to calibrate the price of a ticket based on supply and demand, a fairly revolutionary development for the concert industry. Airlines and hotels use dynamic pricing to adjust ticket prices, but Hubbard says Ticketmaster won’t go as far as those industries, where prices fluctuate on a minute by minute basis.

Hubbard said that within the next few months, Ticketmaster would roll out “demand forecasting tools that use predictive models to spit out a recommendation for what each seat should be priced at.”

Hubbard said the company would be using dynamic pricing on about 50 percent of its amphitheater shows this summer.  “In some cases that’s going to mean moving inventory across price points as demand ebbs and flows,” he said. “We engage more fans through better pricing and we get more butts in the seats.”

One of the more controversial initiatives that Hubbard is spearheading is paperless ticketing, which is fiercely opposed by secondary markets like StubHub, for obvious reasons: paperless tickets are non-transferable and cannot be resold, because the buyer has to swipe their credit card at the entrance to the show.

StubHub is so exercised about paperless tickets that it recently sent out an ominous email to all of its customers warning that paperless tickets “could deprive you of your essential rights as a fan.” The company urged its customers to join what it calls the “Fan Freedom Project” to protest the injustice of paperless tickets.

Hubbard said StubHub is waging a “propaganda war” based on scare-tactics to try and protect its own interests.

Pages:12 View All