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Mother Jones • November/December 2003
Never Roll Over: How the String Cheese Incident–five barefoot, mandolin-plucking improvstsers from Boulder–is taking on the most hated corporation in music

What do you call a company that has preserved its near monopoly for more than a decade despite numerous antitrust lawsuits, that charges exorbitant fees to its captive customers, whose CEO is said to revel in the fact that he "crushed" one of America's most beloved rock and roll bands when it dared to take the company on, that (for these reasons and more) is near the top of most Americans list of companies they love to hate? Well, some people call it Ticketbastard, but Ticketmaster doesn't mind, so long as people keep calling-and logging on and walking up to its outlets, which they did enough times last year to buy 95 million tickets, worth $4 billion, on behalf of its parent, Barry Diller's InterActiveCorp. They call, of course, because they have no other choice. Ticketmaster has made hay during the recent consolidation of the entertainment industry, scooping up the exclusive right to deal tickets for nearly 90 percent of the nation's arenas and amphitheaters, and more than 70 percent of the clubs and theaters. And in the unlikely event that an artist is performing at a nonTicketmaster venue, the company also has exclusive contracts with the country's top promoters-Clear Channel, AEG, and House of Blues, among them-which together sell about 30 million tickets a year.

It's an arrangement that makes sense for Ticketmaster's promoter clients-and not only because it leaves them free to concentrate on getting people to turn out for a show rather than making sure that tickets are printed properly or that each seat is occupied by only one fanny. A part of each senice charge is rebated to the promoter or venue, creating a steady income stream invisible to the consumer-a practice that, according to one recently signed client, is central to Ticketmaster's sales pitch: "We'll take all the heat," the salesman told him, "and you get the money.~ With its hardball tactics, indifference to public wrath, and technology that even its fiercest opponents acknowledge is spectacular, Ticketmaster is a juggernaut, one that leaves concertgoers fuming about having to pay what the company indelicately calls "convenience charges" that cam cost more than 50 percent of the ticket; about being forced to wait through Britney-on-hold to talk to a computer; about having to deal with a corporate behemoth to indulge in rock and roll.

Resistance to Ticketmaster has proved futile-for performers as well as audiences. In a highly publicized fiasco nearly a decade ago, Pearl Jam tried to buck Ticketmaster, canceling its 1994 tour when service fees put prices over the $20 limit the band had vowed to maintain. An attempt to tour the next summer in non-Ticketmaster venues collapsed under its own logistical weight. And when neither congressional hearings nor an antitrust complaint filed with the Department of Justice led to any relief, opposition to Ticketmaster seemed crushed.

Pearl Jam couldn't take Ticketmaster on in court because it didn't have its own ticketing company. But the String Cheese Incident does, and in August the Colorado-based jam band filed an antitrust suit in federal court, alleging that Ticketmaster has used its exclusive deals-and colluded with another ticket dealer-to foreclose competition, to keep service charges high, and to interfere with other ticketing companies, all violations of the Sherman Antitrust Act. At issue are tickets that promoters hold back from the public for bands to use as they see fit-to give to friends or family, to use for prmotion, or to sell directly to fans. (SCI Ticketing essentially resells the tickets, pocketing only the service charges.)

Ticketing is not the band's only nonmusical enterprise. In fact, String Cheese Incident and its ancillary concerns comprise an entertainment mini-conglomerate big enough to nearly fill a two-story office building in Boulder Friendly dogs roam the hallways that connect offices for the venous businesses: a management company that handles affairs for String Cheese and other bands; SCI Gear, which hawks T-shirts and stickers bearing the band's distinctive, psychedelic iconography (heavy on images of jellyfish); SCI Fidelity, which produces albums for the band and other performers; the Footprints fan community-service project; even a travel agency that books accommodations for bands and fans on tour and helps String Cheese stage its International Incidents in places like Costa Rica.

In some ways, this vertical integration simply reflects the band members" preference for control over their own affairs-"50 percent perfectionism and 50 percent paranoia," according to guitarist Bill Nershi. But it's also a business model tailor-made for the music that String Cheese plays. The quintet has a wide-ranging musical vocabulary, but at its artistic heart is the attempt to use the many styles of popular music (folk and bluegrass, jazz and rock, calypso and reggae) as springboards for improvisation that reaches for musical ecstasies-bright dashes of inspiration that can catch an audience up in a Dionysian celebration of the moment of creation. It's a risky approach to performance, and it depends on an audience willing to tolerate the inevitable detours and dead ends of free-form jamming. For the

band to succeed artistically and financially, the fans' devotion must be nurtured, according to String Cheese's Michael King, who plays mandolin and violin. 'It's a minor miracle that we get to do what we get to do,' he told me. "It's all because of the fans. We have to keep the connection alive."

To judge from the numbers, String Cheese has succeeded in doing that. Nearly 300,000 tickets were sold to Incidents last year, mostly to a tie-dyed legion of fans who follow the band from town to town, creating a scene

part traveling Chautauqua, pert '60s re-enactment camp-that would be familiar to an older generation that traipsed around after the Grateful Dead: parking lots where veggie burritos are sold by hemp-clad vendors listening to last night's show on their boom boxes; shows where fans greet each other with hugs and hang raptly on every note and lyric; and do it yourself ticketing. Grateful Dead Ticket Sales has served Deadheads for 20 years, and like that business, SCI Ticketing (which began as a phone line in a candle shop owned by the brother of the band's bassist) builds fan loyalty by offering early sales of hotly demanded shows, tickets panted on icon-bearing stock and a family sensibility that turns a ticket into a token of belonging to the String Cheese community. It's an approach that leaves customers satisfied, even as the band grows. "You can still call and talk to a real person who has answers and is happy to help," one ticket buyer told me. "You can still spot the staff at shows, boogying down with the rest of us."

With so much at stake symbolically and financially, it's no wonder String Cheese is willing to spend big money (even before lawyers" fees, litigation expenses are expected to exceed a million dollars) to preserve its right to sell tickets to its own shows. But things weren't always this contentious between SCI Ticketing and Ticketmaster. Until 6112001, in fact, the two companies worked together. Fans purchasing tickets on the SCI Ticketing website were actually doing business through Ticketmaster, which operated the ticketing page and fulfilled the orders. The two companies shared the service charges, and up to half of the band's tickets were sold this way But, says band manager Michael Luba, when tickets went on sale, "it would be a mad rush for the first 10 seconds, which would invariably blow up whatever system we were using. There were all sorts of other problems, like multiple charges. We would get letters from kids saying, 'I'm defaulting on my student loans because Tidketmaster charged my credit card $3,000 when all I wanted was a $25 tlcket.' We got pushed to the brink where we had almost burned the bridge with our fans."

So SCI Ticketing invested $250,000 in its own software and equipment and opened in September 2001, selling more than 90,000 tickets in its first year with deeply discounted fees. (An online customer buying two tickets, sent via UPS, to each of four String Cheese shows on a recent tour would pay SCI Ticketing $264.45 for tickets that would cost $365.25 from Ticketmaster-a $100 difference that, Luba likes to point

out, is enough to buy a pair of tickets for another show, with money left over for gas to get there.) This success is what provoked Ticketmaster, according to Luba, who thinks the company realized that "if a bunch of idiots from Colorado can figure out how to do this, then what's to stop the New York Yankees or anyone else?"

Terry Barnes, Ticketmaster's CEO, confirms that in span" 2002, his company was feeling pressured by online upstarts-not only by SCI Ticketing, but by a large number of band-run sites. "All of a sudden," he told me, "band holds were going up and our inventory of tickets to sell to the public was going down. We felt that we had to act to protect our investment." In May, Ticketmaster sent its clients a letter warning them that the practice of holding tickets for bands was getting out of hand, that these "excessive holdbacks" were potential violations of their exclusive deals. A subsequent letter defined "excessive" as anything more than 8 percent of the seats-far lower than String Cheese's usual allotment. In short order, promoters with Ticketmaster deals, or working in Ticketmaster venues, began to waffle on providing the band tickets, sometimes refusing outright. But String Cheese insisted on getting its customary allotments and was soon scrambling to find space in the dwindling number of non-Ticketmaster locations or, more often, haggling with nervous promoters over something once taken for granted. One show had to be moved on a moment's notice, tickets already sold were declared invalid, and relations with promoters were strained to the point that, says Luba, some were reluctant to deal with the band. That slowed the company's growth. SCI Ticketing already has clients besides String Cheese, including Steve Winwood and Charlie Hunter. But attempts to expand further, which its president, Jason Mastrine, says have included discussions with the White Stripes and Bob Dylan, have stalled because "we can't guarantee that [promoters] are going to give us tickets from show to show, band to band, year to year."

Ticketmaster issued a press release denying that it is stifling competition from SCI Ticketing and accusing them of trying to "fire -ride" on the infrastructure that it built. Luba disputes this charge. "If that's the case, then don't let us use it. Just let us in the building-we'll use our system." SCI Ticketing, Luba said, doesn't want to compete for

the entire range of ticketing services-phone, online, and walk-up outlets as well as ticket printing and reading-that Ticketmaster provides its client venues; it only wants to sell tickets directly to fans.. "We just want to serve the artists and the artists' fans," Luba says.

But the suit filed by SCI Ticketing alleges that an arrangement between Ticketmaster and another online ticketing service, MusicToday, shows that Ticketmaster wants to control any artist-to-fan ticketing it does allow. In the deal, worked out last year, MusicToday promised not to sue Ticketmaster for antitrust violations-as they had threatened to do when the May 2002 letters came out. In return, Ticketmaster agreed to tolerate excessive holdbacks-up to half the house for MusicToday's biggest clients, the Dave Matthews Band, Phish, and the Dead. String Cheese claims that MusicToday and Ticketmaster have colluded to cut others out of the ticketing business. And according to Bert Foer, president of the American Antitrust Institute, the deal may prove fateful, much as Microsoft's bundling arrangements did in its antitrust trials: "In the same sense, here you have a monopolist apparently using its monopoly power to discriminate among people that have to do business with it, and giving favors to those who play the game, which is to reduce competition."

Many in the industry wonder why SCI Ticketing doesn't seek a safe harbor like MusicToday did. Robert Tucker, the former head of ticketing for MusicToday, recently cut a similar deal with Ticketmaster to do fan ticketing for Radiohead. Tucker says he has urged Luba to compromise rather than face a protracted legal battle-advice he is sure Luba will ignore. Still, Tucker seems to admire the band's unyielding position. "Everybody else is doing as much as they can not to incur the wrath of Ticketmaster," he says. "String Cheese is probably at the most adventurous edge of righteousness."

It's an edge where the band seems ready to make a prolonged stand. Soon after the lawsuit, SCI Gear released a new T-shirt sporting a String Cheese-ified "Don't Tread on Me" logo, capturing the revolutionary American principle that, according to the band, makes the adventure worth taking. ~The thick stream that runs through the history of the band is not ever taking the easy way out," Kang, the mandolin and fiddle player, told me. "As painful and hard as this is, we'd rather stick it out on our own."