Can AEG's AXS change the way tickets are sold?

In its bid to create a ticketing system that can eventually compete head-to-head with Ticketmaster, Los Angeles entertainment giant AEG is putting forth a bold argument: The long-standing concept of the morning on-sale needs to die. 

"It's 2013, a 24-7 fully-distributed on-demand world, and we still have this process that's a legacy of how we used to sell tickets 30 years ago, when you stood in line outside of Tower Records," said Bryan Perez, AEG's president of digital, ticket and media.

"Why are we doing that method on the Internet, particularly in an environment where everyone is complaining about the brokers being the ones who get the good seats?"

AEG's solution is a program it's calling Fair AXS. Although it has not yet been implemented on AEG's 18-month old ticketing site, the pitch is simple: turn the on-sale into more of a lottery system. 

Fair AXS will allow fans to sign up to purchase tickets up to a week in advance of the on-sale date. Customers can select up to three sections in which they would like to sit, and tickets will be purchased in advance via a lottery system. If tickets remain, there will be a general on-sale.

Fair AXS is a key component of AEG's ticketing platform, which this week started selling concert tickets for  Staples Center, the busiest concert venue in the United States. 

AXS was launched in August 2011 and now counts 24 venues among its stable, including London’s O2 Arena. AEG is Ticketmaster’s largest third-party customer, but the company has long known a split was happening. As a condition for getting antitrust approval for its 2010 merger with promoter and venue owner Live Nation Entertainment Inc., Ticketmaster agreed to license its ticketing service to AEG.

Ultimately, AEG struck a joint venture with Outbox Enterprises, which has been selling tickets to Cirque du Soleil events. Competing with Ticketmaster won't be easy. While AEG Chief Executive Tim Leiweke earlier told The Times that AEG owned and operated venues account for about 20 million tickets yearly, not all have switched or will switch over to AXS.

In a statement provided to The Times from Ticketmaster, the company noted that its renewal rate with venues is essentially perfect, and that Ticketmaster will still handle two of the three sports teams that call Staples Center home. 

"We look forward to continuing to serve the Lakers and Clippers at the Staples Center and all of our other Los Angeles based clients," read a Ticketmaster statement. "L.A.'s fans will still be able to tag themselves into their own seats, manage their season tickets and purchase tickets through Ticketmaster online and mobile apps."

This summer, AXS will begin selling next season's Kings tickets via the platform. Perez spoke optimistically of the Lakers and Clippers eventually joining the AXS stable (AEG owns a minority stake in the Lakers). Asked to elaborate, Perez said simply, "We're in the process of migrating the sports teams at Staples Center, starting with the Kings."

When it comes to concert tickets, fans usually have two main questions: Will ticket fees become cheaper and will it be easier to get the best seats in the house?

On the ticket fee issue, both services look to be relatively on par. A $31.50 ticket, for instance, to a March 18 concert with the Specials at downtown's Club Nokia on AXS comes with $16 in fees. A $26 ticket to a March 20 show at the Fox Theater in Pomona on Ticketmaster comes with an additional $15.60 in fees.

However, while AXS does not charge to allow fans to print their tickets at home, there is a $5 charge to have those Specials tickets mailed to you. Ticketmaster has largely eliminated print-at-home fees, and if you want to see the Specials in Pomona, they will mail those tickets to you at no extra charge. 

Where AXS will primarily aim to win over fans is with its suite of features. "The first experience people have with a concert is the ticket purchasing," Perez said. "It is incumbent upon us to make sure that experience is as positive as possible. We want them happy when they show up."

In terms of ensuring that the best tickets get in the hands of the fans, that's where AXS is hoping Fair AXS comes in. It's also worth noting that this is the area in which the rivalry between Ticketmaster and AXS could provide the most drama. Ticketmaster has been proactive in arguing in favor of the benefits of paperless ticketing, which typically requires that the credit card purchaser show up at the venue. 

The loudest opponent of paperless ticketing has been StubHub, which has funded an entire advocacy group against the process because it makes it harder to re-sell tickets on secondary sites. StubHub is one of AEG's partners in AXS. Further complicating matters is that Ticketmaster runs TicketExchange, which allows fans to buy or sell paperless tickets to some events. 

AXS appears to be avoiding the paperless ticket debate, at least for now. The company's big-picture idea is to simply change the way on-sales are conducted. By putting less emphasis on morning on-sales -- the standard 10 a.m. on-sale, for instance -- Fair AXS hopes to take power away from those using automated computer programs (called "bots") to snatch up a bundle of tickets.

"There's a lot of conversation in the marketplace around the bots," Perez said. "The only reason brokers have an advantage with bots is because you've set up a system that gives them an advantage over the indiviudal with a computer. If it's a big-bang on-sale, and everyone has to buy at once, naturally the guy with the hardware to overwhelm the system is going to have the advantage.

"You get rid of the bots," Perez continued, "by changing the process, not by having a technology war."

Those old enough, for instance, to remember getting up at 3 a.m. to stand in line at Tower Records in Bloomingdale, Ill., for R.E.M. tickets may find some similarities between Fair AXS and the systems of yore. In those days, numbered tickets were given to everyone in line to prevent fans from camping out all night. If you knew, for instance, you drew the 50th place in line, chances were good you could forget about scoring good seats and go out for breakfast instead.

Fair AXS is sort of the online equivalent of that process. Essentially, you show up, announce you want tickets and you'll find out ahead of the on-sale whether you're one of the lucky ones.

Described Perez: "So Fair AXS, as soon as the show is announced, you can make a ticket request. It's a ticket request system. You can say, 'I want four seats and I'm willing to sit in these three sections.' We gather up all the information. We randomly jumble it up, we look at it all and we see who's buying more tickets than they should, and we pull out the bad guys in a much more orderly fashion. We process them offline."

It also provides more data to AEG ahead of time. If there are, for example, a lot of advance requests for tickets via Fair AXS, AEG can add shows. If there are few, the company will learn earlier that interest is low and perhaps "that the prices should be lower and there should be more marketing," Perez said.

The program will be rolled out throughout the course of the year, and it stands at the core of AEG's AXS philosophy. 

"The consumer doesn't get stressed because they're sitting there at 10 a.m.," argues Perez. "This is much more orderly. It's much more fan-friendly. It allows you to control the amount of spurious requests -- you can see them and take your time to sort through them -- and people get tickets without rearranging their schedule." 

Well, hopefully get their tickets, anyway. 

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