The Hot Seat: Adam McArthur

Published in The Music Network

Adam McArthur, GM of Moshtix and now Foxtix, discusses News Limited’s move into ticketing, lower fees, new business and overseas expansion.

When Foxtix announced its arrival last month, it made bold claims of challenging the big two of Ticketmaster and Ticketek. What’s the plan?
We’ll take them on with the Moshtix experience, which is having lower fees as a starting point and a much-more flexible experience. We’ll do that through our technology, and we don’t have that legacy of a highcost operating structure. They’re used to receiving high fees. For them to change, they’d have to accept earning less money doing the same thing. We expect our fees to be a lot lower than what’s currently being charged by the big players.

How much lower?
We can’t change the ticket price, but we can certainly change the fee part of it. And it varies by deal, depending on the level of services that are required. We certainly see it in the 20-30% range of the fee (charged by the big two). The fee should be in the $4-5 range in most situations (on international tours). Some transaction fees are soaring well above that. We’ve seen some transaction fees through Ticketek at $17-$18. They’re blaming the credit card charges, but they’re not being charged that themselves. There are some large fees in this country. They don’t need to be as high as that.

How’s business?
There are a couple of deals coming up which are in the process of being signed. Moshtix is doing very well, but it is being impacted by the festivals market. The oversupply is affecting our customers in that space. There are a couple of standout festivals, but most are a fair way down on last year. They’re expecting sales to happen later in the cycle than early on.

You look at December and you’ve got U2, Bon Jovi, Linkin Park all touring here and that upsets the festival market as well. It’s going to be hard for (Foxtix) to win the first couple of deals. There’s going to be a lot of competition from the big two not wanting to let us in. Over the course of 3-5 years, we expect to take a significant chunk out of those two players.

Foxtix is handling a David Campbell indoor concert. So will Foxtix chase the pub-end?
We’ll stay in pubs and clubs with the Moshtix brand. Foxtix will be the more mainstream events, covering theatre, arts and certainly music but focusing on an older demographic than what we have done with Moshtix.

What’s been the initial reaction of the launch?
The promoters are saying that strong competition would be good because there hasn’t been competition at that end of the market for a long time. There’s probably 20-30 ticketing companies in Australia but they’re all very small and they have a very small niche. And no-one has the investment to take on the big players because of the deep pockets needed to do that. But they’re slightly wary because they know many of the large deals – for stadiums and arenas – are in long-term ticketing arrangements.

In Australia, the venue controls the ticketing rights. We won’t change that overnight, but there’s always opportunities around and tenders coming up which we’ll be involved in. There’s a good part of the market we can go after – outdoor shows, the arts community, large exhibitions, and the sporting market.

Why is News Limited getting busy in ticketing?
The majority of News Limited’s revenue is from advertising. If you go back to the 2005-2006 period, the advertising market started to downturn. Ticketing is an alternative revenue stream. Also it fits well within a media company because if you promote events more widely, then you can sell more tickets. It’s worked well over the past three years with Moshtix, which has been really successful. So what’s Moshtix’ marketshare? We think it’s in the 5-7% range.

Will you merge the two ticketing companies?
We went through those talks before we launched the brand. Our original approach would be to use Moshtix across everything. A year ago, we decided we needed a new brand. I’d like to think they both have their own life. But there might be a time when it just makes sense to merge them, if one is able to serve both of those markets properly.

So you’re looking abroad?
Yes, we’d like to start an international expansion in the next five years. We should prove ourselves first in Australia and NZ. If we’re able to do that, then there’ll certainly be opportunities to expand.

Click here for the original story.