NUMBER: 9603067616 AUTHOR: Boehlert, Eric TITLE: Altered stakes. SOURCE: Rolling Stone. n730, Mar 21, 1996, p. 22. 1/2 pages PUBLISHER: Straight Arrow Publishers STANDARD NO.: 0035-791X TEXT: DON LAW cuts out the middleman ALTERED STAKES For the first time since alternative-rock superstars Pearl Jam made concert ticketing a consumers'-rights issue for the '90s, a potentially powerful competitor has emerged to disrupt Ticketmaster's domination of the market. Don Law, New England's biggest concert promoter, has ended his long relationship with Ticketmaster and has launched Next Ticketing, in Boston. Next will sell tickets for the three major concert venues that Law operates in the Boston area as well as for local clubs that he books exclusively. By taking advantage of computer technology, Law's plan to sell tickets to his own concerts cuts out Ticketmaster's lucrative role as the middleman, altering the equation dramatically. For years, Ticketmaster has maintained marketplace supremacy by locking venues and promoters into exclusive contracts and, in return, sharing millions of dollars' worth of ticket service fees. As promoter, venue owner and ticket boss, Law will try to do it all himself. If he's successful, other big-time promoters may follow. Much like the ETM system that Pearl Jam used last year, Next's system will feature automated-voice phone sales. Thanks to increased phone-line capacity, customers will be less likely to encounter busy signals, says the new company's general manager, Ben Liss. (Well-connected with promoters, Liss comes to Next after serving as the executive director of the North American Concert Promoters Association.) Rather than speaking to an operator, customers will be able to purchase tickets by punching credit- card information into the phone. To buy with a personal check, callers will receive a confirmation number and a PO Box address over the phone. Ticket outlets will also be set up at a dozen Newbury Comics record stores in the Boston area. By closely monitoring the limited number of sales locations, Next hopes to eliminate scalping. Consumers may be disappointed with Next's service fees: People will be charged $4 at Newbury Comics outlets (the store will pocket about $1 per ticket), $4.75 over the interactive voice system and $5.75 for operator-assisted sales by check or credit card. But box offices at the Great Woods Center for the Performing Arts, Harborlights Pavilion and the 2,600-seat Orpheum Theater will sell tickets without any service fee for fans who don't care about convenience. Last summer, Ticketmaster charged $5.25 for each ticket sold by phone to Great Woods shows. Based on Law's past summer-concert seasons, Next is expected to sell a million tickets this year. That could add up to tidy profits for the promoter. Ticket industry sources predict that Next will take a loss the first year due to hefty upfront costs, but eventually the company could be pocketing nearly $2.50 from every ticket sold, or more that $2 million annually. Under his previous Ticketmaster agreement, Law earned $1.20 a ticket from service charges. "[Next] has nothing to do with saving consumers money," says a source close to Ticketmaster. "It's about promoters trying to get more money because they're getting squeezed by the acts. Whether it works remains to be seen." Pearl Jam's well-publicized feud with Ticketmaster began when the group demanded that service fees be limited to $2 per ticket. While Next's fees are considerably more than that, Pearl Jam manager Kelly Curtis welcomes its entry into the business. "Change is a good thing," he says. Liss says that Next will consider lower charges on a case-by-case basis, but the company wants to avoid "a patchwork quilt of service fees." Law's move is not unprecedented. In 1992, Seattle promoters Ken Kinnear and John Bauer who had been pocketing 75 cents from every local concert ticket that Ticketmaster sold broke away and announced the start-up of their own company, Power Station, to handle ticket sales for the amphitheaters that Bauer and Kinnear operated. Ticketmaster responded by withholding the promoters' service-charge revenues. "[Ticketmaster] really played hardball,'' says one ticketing executive. A year after its launch, Power Station was out of business.