TICKETMASTER: SORDID DETAILS

posted by James Reel

Douglas McLennan has looked into the gaping maw of Ticketmaster and its proposed merger with another company, and reports what he has found here. This is what interests me the most:

TM's fees are exorbitantly high not because it costs so much to process ticket orders, but because the company kicks back money to venues in return for exclusive deals to sell tickets. These payments can run into the hundreds of thousands of dollars, and the company recoups them by charging the consumer higher fees on ticket transactions, claiming the kickbacks as a cost of doing business. The practice effectively cuts out competitors from selling at these venues. The company defends the practice saying it provides added revenue to concert facilities. The practice has ensured that TM maintains its hold on the ticket sale business.

DIRTY FINGERS

posted by James Reel

My Arizona Public Media colleague Robert Rappaport, one of the few people I know who still dirties his hands with newspapers instead of just browsing news Web sites, has an amusing blog entry showing how desperate the Arizona Daily Star is to get its product into the hands of people like Robert. But aren’t house ads that promote the newspaper merely preaching to the converted?

Meanwhile, National Public Radio personnel will no longer sully their fingers with other news organizations’ ink. Jim Romanesko got his hands on this memo from NPR’s director of morning programming and posted it at Poynter Online:

From: Ellen McDonnell To: ME list; Davar Ardalan; Jenni Bergal Sent: Thu Mar 12 15:48:24 2009 Subject: saving money As of April 1 NPR is cancelling all newspaper subscriptions. We are making some arrangments to get the Wall Street Journal either on line or hard copy. You have until tomorrow to appeal this if there is a solid reason why you should be exempt. This is a cost saving measure company wide.

TUCSON CITIZEN: A PLUG UNPULLED

posted by James Reel

Contrary to expectations, the Tucson Citizen is not dead yet. With all due respect to the journalists who are now working there on a day-to-day basis, do we really need the Citizen?

Here’s a summary of the latest, drawn from an article in today’s Arizona Daily Star, which would become the city’s only daily paper if the Citizen is shut down by its corporate owner, Gannett:

On Jan. 16, Gannett announced it was seeking to sell the _Citizen_'s masthead, its Web site and Web address, some editorial equipment, its subscriber list, vendor and contractor contacts, and wire services. Not for sale was Gannett's share of the joint operating agreement, which means Gannett will continue to pull profits from the _Star_ even if it stops publishing the _Citizen_. The combined operating income for Tucson Newspapers [the middleman agency serving both the _Star_ and _Citizen_ under the terms of the JOA] for the 12 months ending Sept. 30 was $21 million, according to Lee's annual report [Lee Enterprises owns the _Star_]. That's a 42 percent drop from the previous year. Newspaper industry experts said because Gannett was seeking to sell the _Citizen_, but not its share in the JOA, prospects for a sale were slim. The _Citizen_'s average daily circulation is about 20,000 newspapers, Gannett said in a news release. That compares with the _Star_'s 94,055 on weekdays and 147,558 on Sundays, according to Lee's annual report. … In an interview Tuesday before Gannett's announcement, Mike Hamila, owner of UNIsystems Mainframe Sales LLC in Phoenix, said he was interested in purchasing the _Citizen_. He said Gannett is insisting that a new owner publish a print edition at least three times per week instead of making the _Citizen_ an online-only publication. Gannett's spokeswoman would not confirm any such details.

Before I discuss whether or not the Citizen deserves to survive, let me just point out that Gannett is the sinister villain in this story. The huge chain, which at its peak owned about 100 papers, including USA Today, is greed incarnate (if a corporation can serve as an incarnation). Oh, Gannett can argue that things are looking bad finacially, as in this story that Reuters reported last month:

Moody's Investors Service on Thursday cut its ratings on Gannett Co into junk territory, citing the newspaper publisher's challenges in producing revenues from online initiatives that are replacing traditional newspaper readership. Moody's cut Gannett's long-term debt two notches to "Ba2," two steps below investment grade, from "Baa3," the lowest investment grade. A rating downgrade into junk territory can significantly increase a company's borrowing costs. "The downgrade reflects Moody's expectation that changing media consumption habits and the heightened level of price and volume competition that Gannett faces as it seeks to monetize its strong local-market content positions in its traditional media and newer digital distribution channels will continue to erode operating cash flow," Moody's said in a statement. "These pressures along with a deep cyclical slowdown in advertising spending and high operating leverage will lead to a weakening of credit metrics to speculative-grade levels for at least the next two years despite revenue-enhancement initiatives and significant cost reductions," Moody's said. Gannett on Wednesday said it would cut its quarterly dividend by 90 percent and use the more than $325 million in free cash flow savings to pay down debt and position itself to "seize opportunities for growth." The move came after the publisher of USA Today said in January its profit fell 36 percent on lower advertising revenue and that it planned to write down the value of its newspapers by up to $5.2 billion.

Looks terrible, doesn’t it? But read that carefully: Gannett’s profit fell, but it’s still making a profit. Oh, maybe not the 28-30 percent profit that was the company standard a few years ago, but the dollars continue to roll in, even if Gannett has not yet figured out how to make money from the Internet. The problem is that profits aren’t sufficiently high for Gannett investors (it’s more common for a newspaper, in average times, to turn a profit around 10 percent).

Let’s take a look at more recent Gannett financial news. Fox Business reported yesterday:

Gannett (NYSE: GCI: 2.52, 0.09, 3.7%) shares rocketed 14% today after the company reported that online advertising revenue at USA Today, its flagship domestic paper, grew 27% year-over-year in February. Overall, Gannett's fourth-quarter profit rose to $353.5 million, or $1.51 per share, from $343.3 million, or $1.44 per share, in the year-earlier period.

Hey, wait a minute—just a few weeks after that Reuters report, Gannett finds that it has figured out how to make money on the Internet! And profits and share values are up!

But that’s not enough for Gannett. Remember, it wants to sell off the unprofitable Citizen, but not its share in the JOA. That means Gannett could continue to suck undeserved profits from the Star for several more years, until the JOA expires in 2015. If the Citizen ceases to exist, Gannett could pull profits from the Star without the expense of supporting a newsroom of its own. Brilliant. Sleazy. Typical.

But it seems that a certain regulatory agency has noticed Gannett’s maneuverings, and now the corporation, which just a few days ago was planning to shutter the TNI plant’s south wing (where all those expensive, pesky Citizen reporters were nesting), is now back in talks with potential buyers. Jimmy Boegle blogs at the Tucson Weekly Web site:

We can piece some things together here: Gannett previously announced that a deadline for offers had come and gone without anything meaningful. Then came word that the U.S. Justice Department was peeved at Gannett for not making all that much of an effort to sell the afternoon daily–with specific unhappiness about Gannett’s demands that any would-be buyers promise to keep the paper going in print at least three times per week. Well, after the DOJ crackdown–during which Gannett’s broker had to touch base with everyone he’d contacted previously–apparently, lo and behold, Gannett found some serious would-be buyers after all.

I’m not sure anything will come of this. What buyer would want the money-sucking Citizen without the JOA share?

And this is why I don’t think we should mourn the demise of the Tucson Citizen, whether that comes next week or next year. There’s no justification for keeping the afternoon paper on life support. With a circulation of only 20,000 in a market this size, the Citizen has less impact than a single raindrop on the sands of the Santa Cruz. Hardly anybody reads the thing, meaning hardly anybody would want to advertise in it (the paper gets ads mainly because they piggyback on ad contracts with the Star, something that wouldn’t be possible without the JOA). As an afternoon newspaper, it’s doomed.

If the Citizen is to survive, it must abandon the old daily newspaper model, and that does not mean merely publishing three times a week instead of six. Tucson does not need this newspaper.

But it does need a professional, reliable source of information and analysis to keep the Star on its toes (and, for that matter, the Tucson Weekly). And that does not require a dead-tree edition. One potential model is the Seattle Post-Intelligencer, which, as of this week, is a Web-only publication. The P-I is not the best model of its kind, though; it seems that it will rely on the equivalent of wire services and reprints to bulk up its site. Outlets like the P-I and the Citizen do not need to be conduits for national-level news and reviews. That material is already easily available online from established, well-connected news organizations with a national presence. The Citizen should be exclusively, intensely local. It doesn’t need to run local movie reviews, but it does need to provide wide, intelligent coverage of all kinds of arts and entertainment in Southern Arizona, and the minutiae of prep and college sports and outdoor life. And, most importantly, it should assign its reporters to beats that have fallen by the wayside nationally as newspapers have gradually shredded themselves into pillow fluff: detailed coverage of cops and courts and local government, not just feel-good puff pieces about ordinary residents and small businesses.

Hardly anybody would pay for an online subscription, and advertising is still an iffy thing online, so new revenue sources would have to be established—and this could mean going for non-profit status, with funding coming from foundations and endowments. Profits from the JOA, which are generated mainly by the Star anyway, could serve as a financial crutch until the non-profit money engine could be built and revved up.

Such an online news operation would serve the community well, and it might even shame the Star into becoming a responsible publication again. That’s the best conceivable future for the Tucson Citizen. But as an afternoon daily newspaper, the Citizen has no future, and should be taken off life support.

THE FUTURE (?) OF ARTS JOURNALISM

posted by James Reel

Here’s an interesting article about the future of arts journalism—that is, how the arts will be reported on and reviewed in a society in which newspapers either don’t care about such things or don’t exist at all. One trend: fired newspaper critics are getting published at online-only sites. This is fine, except that these sites are run on a shoestring budget, and most of the contributors don’t get paid. My rule is, if you aren’t paid for your work, you’re not a professional, no matter how “authoritative” your writing is. So even though these arts sites are springing up (don’t be surprised if some ex-Citizen people find their way to one), the future of professional arts journalism remains dire.

WHERE I'VE BEEN

posted by James Reel

I’ve been away from the blog and the radio station for a while, occupied with other duties. First, I was making my biannual appearance in A Conversation with Edith Head, in which the Invisible Theatre’s Susan Claassen plays the famous Hollywood costume designer, and I serve as a heckler in the audience (typecast again) correcting Miss Head when she misspeaks. Then it was on to the Tucson Winter Chamber Music Festival, which I help organize as a board member of the Arizona Friends of Chamber Music. I also give the pre-concert talks, which was a problem on the first Sunday of the festival; I was scheduled to do that at the same time I was supposed to be in the play at IT. Solution: Make a poster out of a photo of myself, have the festival’s stage manager prop it up on stage and play a recording of my pre-concert talk. People actually thought it was an amusing solution, but I doubt that I could get away with it again.

The festival came off very well, despite a few glitches (besides that first pre-concert talk). Because of a contract error, the Tucson Convention Center double-booked Leo Rich Theater on the first Saturday; luckily, we needed the place only for rehearsals that day, so the TCC moved our musicians to another part of the facility. Also, bassist Volkan Orhon was separated from his instrument courtesy of an airline, but they were soon reunited. Our artistic director, cellist Peter Rejto, got very sick late in the week, but one of the festival’s other cellists, Antonio Lysy (a very nice fellow, by the way), subbed for Peter in the one concert that coincided with Peter’s illness. There was also a complication with some of the rental scores, but I think I’d better not go into any details until we’ve sorted things out with the publishers.

Despite all this, the performances were excellent, and so was attendance, although the Wednesday-night concert, typically, didn’t draw more than 500 people—still a quite respectable number for a hall with an official seating capacity of 511 (we can actually, and legally, get more like 550 people in there).

During this period, I also co-taught an Elderhostel class on chamber music, for which I didn’t have to do much more than show up and talk, because I still have my materials from the last two times I’ve done this. I did crank out a little PowerPoint presentation to make playing recordings easier; odd that Elderhostel has a computer projector but no equipment for audio playback (I had to bring my own computer speakers).

So, a very busy week and a half, during which I sent other people in my place to review plays for the Tucson Weekly. I did manage to find time to attend a workshop production of an expansion of the play Mesmeric Mozart by my friend Harry Clark, with original music by Libby Larsen. Libby was a bit disgruntled, I think, because she’d written the music for quite a different version of this play, and by the time she got to Tucson to see what was going on, a lot of elements of the script and structure had changed. Harry and I tried to convince Libby that the production needs more music from her, but she’s inclined to drop in more bits of Mozart. Frankly, I think the play has grown away from Mozart—originally, it was one of Harry’s “portraits,” basically an excuse to weave Mozart’s music through a text—and now Libby really needs to take ownership of the soundscape. Harry should probably come up with a new title, too, but Mozart sells. We’ll see what develops.

HAIL TO THE NICHE

posted by James Reel

Journalist Greg Sandow has spent the past few years blogging for change in the classical music sphere—opening it up, in various ways, to broader culture, and indeed making it more like pop culture. Here’s a recent explanatory post of his:

From my heart, I'd say that I'd love classical music to change, that I live in the wider world, and want classical music to fit with all the lively, creative, artistic things happening in so many other parts of life. I want to see those reflected in the classical music I hear, and the classical music performances I go to.

You’ll find the full post here. I’ve followed Greg’s arguments with interest for a long time, but in the end, I think his campaign is wrongheaded. Almost everything in our culture today is predicated on the niche—specialty radio stations, specialty TV channels, specialty magazines, each focusing on a narrow interest and marketed as a small piece of a huge cultural smorgasbord. There’s no reason to draw classical music into the overall culture, because the overall culture already embraces what classical music is: a genre appealing to a particular audience. Altering the way classical music is presented in silly ways, like encouraging chatter and disruptive applause, is not going to make it fundamentally more attractive to new audiences.

I do agree with one of Greg’s more important points, that concerts should be more engaged with the music of today, especially since the classical music of today is no longer alienating, for the most part. At the Arizona Friends of Chamber Music, we commission and premiere two or three new works each season, and on every concert we strive to include some fairly recent music, depending on what the touring artists are offering. And guess what? Our core (older) audience receives it very well, usually with great interest. But just playing new music doesn’t seem to draw younger audiences. In fact, hardly anything seems to draw UA students, and UA fine-arts administrators have all sorts of theories about this, all of them having to do with the students’ busy lives—nothing we can address at the presenter end.

So, no, I see no urgent need to make classical concerts more relevant to the larger culture. Yes, we need to market what we do in a way that conveys what we’re really about in a way that connects with people who don’t already come to our concerts, but it’s no tragedy if the majority of them decide that they can get what they want only from, say, Keith Urban or Flo Rida or Incubus or the Fray or whoever else is topping one or another Billboard chart. Keith Urban isn’t going out of his way to attract the classical audience, so why should classical presenters worry about attracting Keith Urban fans? None of us should try to be all things to all people. We just need to do what we do well, in a cost-effective manner, and make ourselves known and accessible to potential audience members. And by “accessible,” I mean in terms of ticket price and convenience of purchase and attendance, not in terms of tolerating boorish behavior that is inappropriate in any number of venues—movie theaters, playhouses and, yes, classical concert halls.