my response

[Adam Rixey]

The logistical problems of keeping slips of paper in a wallet ruin
this whole idea?  Fuck, I had no idea band members (or pizza delivery
boys) were so inept.  I'm glad I'm not a concert promoter, I'd
constantly live my life worrying that tonight's act would show up
without their instruments or need me to tie their shoes for them.

On 3/9/06, Joseph Presley <jwp7 at pitt.edu> wrote:
> Has anyone done this in practice? The reason I said that the logistical
> problems are not trivial is because in similar arrangements in other
> industries, complications come up.
>
> The -really- big problem I'd hate to see is the that I've seen in the
> pizza business. The drivers are expected at the end of the night to give
> the store money equal to the total sales that they delivered. Any cash
> left over is their tip and commission. Sounds simple, right?
>
> Well, sometimes what happens is that someone drops a $20 or an
> undeliverable order isn't canceled in the system. This would be as if
> the band misplaced tickets or lost the money. So, the driver is expected
> to cough up the missing money. If he doesn't have enough in tips to
> cover it, he has to go to the atm and give the money out of his own
> pocket. Needless to say, there is tremendous amount of frustration for
> both the manager and the driver.
>
> Now imagine that the promoter and the band gets into a disagreement
> about how much money is owed from the band's ticket sales. However it's
> resolved, someone is going to feel screwed. The risk of a situation like
> that makes me think that such an arrangement is not worth the potential
> extra promotion.
>
> Now suppose instead of the promoter fronting the ticket, he pre-sells
> the ticket to the band for a discount. Well, then the band would have to
> have a relatively significant amount of money to spend up front. If you
> have any deal to refund unsold ticket, then you have the problem that
> you have in the first scenario.
>
> Joe
>
> Chris Rapier wrote:
> > On 3/9/06, Joseph Presley <jwp7 at pitt.edu> wrote:
> >
> >>This sounds like an interesting idea, if as you stated, it's provided as
> >>a service for the opening bands. The only way I can see that happening
> >>is if the deal for the band included a percentage of the door after a
> >>certain number of people show up. Then you can offer the band tickets in
> >>order to help them out.
> >
> >
> > I think thats overly complicated.
> >
> >
> >>How would you deal with the logistics? It doesn't sound like a trivial
> >>problem to keep track of how many tickets the band sold and to get the
> >>money from the band for the tickets they sold.
> >
> >
> > Actually this is pretty trivial. The promoter offers the band T
> > tickets for presale. The band says 'okay' and pays for T tickets at a
> > discount price of P. The band sells N tickets. The band hands the
> > remaining  (dT = T - N ) tickets to the promotor who refunds the band
> > dt*P dollars. The difference between the face value of the ticket F
> > and the discount price P times the number of tickets sold N ends up
> > being extra profit for the band ((n*F) - (T*P) + (dT*P)) . The band of
> > course, can sell the tickets at any price they want to as long as they
> > are willing to absorb any loss this might incur.
> >
> > So say Band X is playing a show. They buy 50 tickets from the promoter
> > at a discount price of $5 for a total outlay of $250. The tickets have
> > a face value of $10. The band then sells the tickets to friends and
> > others for $7.50 each. They sell 40 tickets. Band X gives the
> > remaining 10 tickets back to the promoter and receives a $50 refund.
> > Band X makes ((50 - 10) * $7.50) -  (50 * $5) + (10 * $5) = $100 just
> > on the presale of the tickets. The promoter helps fill the venue in
> > addition to piggybacking on the promotion the band does. The promoter
> > might feel that he might be losing money because these people who show
> > up might have paid full price - but of course, they might not have
> > shown up if it wasn't for the fact they dealt directly with the band.
> > So thats a risk the promoter has to take however, its really just a
> > risk that they won't maximize profit. The promoter of course, needs to
> > determine what the optimal discount ticket price is - this should be
> > (at least) the break even price so they don't actually lose any money
> > on these tickets - unless he wants to use these tickets as a loss
> > leader.
> >
> > In short, the band doesn't take any real risk because they can get
> > their money back on any tickets they don't sell. The promoter doesn't
> > take any *significant* risk because he has the money in his pocket (he
> > might have to refund all of it of course, but this doesn't represent
> > an actual loss for him). The band can be assured of making *some*
> > monkey as long as they sell some tickets. The promoter gets to fill
> > the venue and gets free promotion. The logistics are dirt simple
> > because you only need paper tickets to track everything. Of course
> > agreements have to be made to handle some issues that might come up
> > but it wouldn't be anything horrifically complicated.
> >
> > Also, if that math was beyond anyone here you need to log off and get
> > back to studying pre-algebra for your big quiz tomorrow.
>
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--
Adam Rixey
arixey at gmail.com