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The Philadelphia Inquirer • October 1, 2003
Taking On Ticketmaster

The music-business version of David and Goliath, as seen by the Colorado jam band known as the String Cheese Incident:

Music-loving ski bums graduate from playing for lift tickets to back-to-back sellouts of Radio City Music Hall through hard work and good vibes. The group encourages taping at its shows and lets employees bring their dogs to the office. It forms a discount ticket agency and travel service for fans. Then, suddenly, the world's ticket giant gets all lactose-intolerant and threatens to unplug the party.

Now Ticketmaster's take:

In a quarter-century, a single outlet in Tempe, Ariz., becomes the global leader in ticket sales. Why? It's smart and performs a valuable service very well. It spends a fortune to negotiate exclusive deals with concert halls, only to find this band with a wacky name wants a free ride by taking tickets made available to artists and selling them for a profit - at Ticketmaster's expense.

As lawyers prepare this dogfight for court, the band - which will play the Tower Theater on Saturday and Sunday - is enjoying its highest visibility ever as a champion of those who grouse about fees slapped onto concert tickets. For the Upper Darby shows, for instance, Ticketmaster is tacking $11.65 in convenience and processing charges onto a $30 ticket. The band's ticketing service charged $4 in fees.

The Cheese, whose members describe their sound as a "sacrilegious mix of bluegrass, calypso, salsa, Afro-pop, funk, rock and jazz," hopes to have more success than Pearl Jam did a decade ago when it aided a Justice Department investigation into Ticketmaster's practices. That probe ended in 1995 with the government clearing the ticket company of any wrongdoing.

The five-member Cheese filed suit in federal court in August, charging that Ticketmaster is a monopoly that flexes its muscle to violate antitrust laws. Last month, Ticketmaster countersued, claiming the band interferes with its contracts. Both sides want jury trials. Ticketmaster declined to give interviews for this article.

The String Cheese Incident's trip into the thicket of ticketing began in a typically homegrown way, in the back room of Lovelights, a Durango, Colo., candle shop owned by the brother of bassist Keith Moseley. In those days, the Cheese - which formed in 1993 - was primarily a Rocky Mountain road band that played every other night of the year. Moseley's brother, Kevin Teel, took ticket orders over the phone. Four years later, records were released on the band's own SCI Fidelity label, the same as they are now.

In 1998, after the cult band began to see recurring faces at its shows, the Cheese expanded its do-it-yourself operation. In addition to SCI Ticketing, it created a travel agency so loyalists could book tickets and rides in one place. Cheese merchandise followed, first by phone and mail, later over the Internet.

"From the beginning, we've tried to cultivate the relationship with the fans, recognizing that we're not the sort of band that will have a hit single on the radio, or focus on an MTV video," Moseley said. "We're trying to build a grassroots base that will last for years to come."

Today nearly 50 people work for the band in Boulder, using sophisticated software that allows fans to order tickets to multiple shows in different cities at discount rates and with only one service charge.

They're supported by thousands of "pirates" strategically placed around the country, people such as West Chester University student Natalie Podbutzky, who slaps up Cheese posters and billboards in exchange for a free ticket.

Podbutzky, 22, follows the band, which she's seen maybe 10 times, because "they're fun to see live, and they're different than most stuff played on the radio." In truth, the Cheese gets minimal airplay, and relies on word-of-mouth to attract fans.

The scene at String Cheese shows is positive, Podbutsky said. "The people are really nice people," and concerts are held in conjunction with good causes - such as low-sodium and organic food drives.

For its ticket service, the Cheese has relied on "holds," the seats that venues and promoters reserve for the artists. In the past, it has received as much as half of the house, the band says in its lawsuit, filed in U.S. District Court in Denver. The Cheese pays face value, then adds its own fees.

"There is a cost of doing business," acknowledges manager Mike Luba, who became involved with the band after hearing it horrify a bluegrass festival audience with a version of Aerosmith's "Walk This Way."

As the Cheese's popularity has spread, so have the band's business chops and technological prowess. SCI Ticketing clients now include King Crimson, Steve Winwood and Cake.

In May 2002, Ticketmaster lowered the boom, the band says. The company detailed a series of conditions a band must meet to qualify for holds, which would no longer exceed 8 percent of the house. For instance, an act could sell only to "legitimate" members of its fan club - defined as an organization with "meaningful interaction" with the artists and yearly dues of at least $15.

The Cheese curdled at the words.

"Who is Ticketmaster telling us we have to have 'meaningful interaction' or have fans pay $15 for the honor of supporting us?" Luba asked.

When Clear Channel, the country's largest promoter and venue owner, informed King Crimson it would not provide any holds on the band's spring 2003 tour, it cited pressure from Ticketmaster, the String Cheese suit contended.

Luba says it's been difficult to accommodate fans on the current Cheese tour because, from city to city, he never knows how many tickets will be made available for resale.

"What's good in Albany often isn't good in Rochester," he said. In some cities, the band has gotten only 8 percent of the house, in others "we managed to get up to 50 [percent]. We realized this is the last time we will ever finagle past 8 percent."

The band sees Ticketmaster's actions as "an absolute blow" to the ability to reward and enlarge its fan base, said Luba, citing how artists must rely on concert revenue to offset slipping record sales.

"We can do it for cheaper and we feel better, and therefore why shouldn't we be able to do it?" asks Jason Mastrine, general manager of SCI Ticketing. "Why shouldn't we be able to save [fans] some money? Why should Ticketmaster be allowed to throw on 30 to 35 percent service fees?

"At that point they're making more than the promoter and the artist," Mastrine said. "They've gone from creating a support industry to becoming the monster."

Losing what's likely to be a lengthy legal battle holds risks for either side. Given Ticketmaster's dominance, the String Cheese Incident could wind up with no seats to sell at nearly 90 percent of U.S. halls. And Ticketmaster could alienate its customers.

Says Anthony Sabino, a business professor at St. John's University in New York, "Ticketmaster has to remember that its entire business is built around selling tickets to regular folks who line up, call in, or use a computer. Disdain for those customers would be a costly mistake."

Not that Ticketmaster isn't entitled to its fees. "They've spent big money negotiating deals with venues across the country," said Jerry Reiseman, a New York entertainment attorney whose clients include the venerable Manhattan recording studio the Hit Factory. Reiseman cautioned that the Cheese will look hypocritical if it becomes successful and decides to play ball with Ticketmaster after all.

"We've seen instances [where] these well-intentioned bands hit the big time and become major stars, [then] drop the fight and play big venues knowing that their fans will pay any price."

Luba said Ticketmaster's dominance is increasingly threatened as technology allows more players to sell tickets for low costs. "What they can provide is no longer crucial. What scares them is if a bunch of bozos like us in Boulder found out how to do it, anyone could."