BEST SEATS ON THE NET : DESPITE SOME GLITCHES, TICKETMASTER READY TO BRING ITS WEB SITE TO NATIONAL AUDIENCE.

Byline: P.J. Huffstutter Daily News Staff Writer

You want to see the rock act Smashing Pumpkins perform Jan. 7 at the Rose Garden arena in Portland. You call to buy tickets, only to be told by a TicketMaster operator that the gig has been ``sold out for weeks.''

The operator is wrong.

As she tells you ``sorry, no seats,'' you log on to the Internet and browse through TicketMaster's site on the World Wide Web. You purchase two seats on line: Section 102, Row S, Seats 3 and 4.

For nearly six months, TicketMaster Corp. has been quietly using the Internet to sell tickets to concerts and sporting events. Now, the Los Angeles-based company plans to roll the service out nationwide by the end of the year.

The on-line venture marks the latest evolution in ticket sales and distribution, a shotgun marriage between traditional business and modern marketing. Yet technical flaws and system quirks like the Smashing Pumpkins mix-up dog the on-line project.

``This is version 1.0,'' said Alan Citron, senior vice president of new media for TicketMaster. ``Right now, it's a practical third option for people. You've got the phone, you've got the ticket outlets, and now, you've got the Internet.''

The company made its initial advance into on-line sales in May, when it offered tickets to Lollapalooza '96. The traveling music festival proved to be a perfect test arena for on-line sales, as most of the venues didn't have assigned seating.

``Without advertising that we were doing this, we wanted to see if it would work,'' said festival organizer Marc Geiger.

It did. Of the 600,000 seats available throughout the tour, nearly 13,000 were sold on line.

For a company like TicketMaster - which was acquired by Microsoft co-founder Paul Allen in 1993 - the step toward on-line sales is a natural one, already tried by other firms with some modest success.

IBM used the Internet to sell tickets to basketball, soccer, gymnastics and several other events for the summer Olympics in Atlanta.

In April, Playbill Magazine joined forces with Tele-Charge Tickets to create an on-line box office for more than 30 theaters, including the Pasadena Playhouse.

``We're not selling huge numbers (of tickets) on line, but we're comfortable with how things are going so far,'' said Lee Silver, corporate relations director for the Shubert Organization, which runs Tele-Charge.

Even the Toronto Blue Jays jumped on line this year and hawked nearly 1,000 tickets through its team's site on the World Wide Web.

TicketMaster's potential rewards are enormous: The firm is the exclusive phone and retail sales agent for two-thirds of the 10 million seats at major entertainment and sports arenas in the United States.

Industry analysts say consumers are eagerly embracing on-line transactions for their fun. This year, shoppers are expected to use the Internet to spend $85 million on entertainment purchases such as compact discs and concert tickets, according to a recent study by Forrester Research, a Cambridge, Mass., technology forecasting firm. By the year 2000, that total is expected to top $1.25 billion.

On-line entertainment sales are surpassed only by sales of computer products and travel, according to the study.

``Most of the concertgoers are young kids, and most of them either have access to the Net or will have access in the next couple of years,'' said Terry McBride, president of Nettwerk Productions in Vancouver, Canada, and manager for singer-songwriter Sarah McLachlan. The company uses the Internet to promote its shows and inform fans where to buy tickets.

``TicketMaster is doing what we're doing, which is targeting the younger fans who are comfortable with the technology and have the money to own a computer,'' McBride said. ``Sooner or later, (TicketMaster) might strike a deal where anyone with a credit card can buy a ticket for any show anywhere.''

That's exactly the shopping option TicketMaster Corp. plans to offer the American public by December. Right now, fans can pick up seats to concerts and sporting events in Portland and Seattle, the two test sites for its on-line sales. The company plans to sell tickets to Broadway shows before the end of October, to Los Angeles events by November and to entertainment in the rest of the country by the end of 1996.

So far, the process of purchasing tickets on line is simple. Go to the TicketMaster Web site, http://www.ticketmaster.com, and search for an event by city, venue or performer. Select the desired number of seats. Instruct the system to find the best available location.

The computer then presents its findings and, for many venues, offers the user access to a seating chart. The consumer can either order the tickets on line by giving a credit card number or calling a phone number and giving the card number to an operator.

If the tickets are purchased at least 10 days in advance, they will be mailed to the buyer's home. If bought later, the tickets will be available at the will-call window the day of the event.

Those who want their tickets immediately can opt to have them mailed overnight for an additional $23 fee or within two working days for an extra $8.50.

Companies are spending millions to establish electronic storefronts because they can cut costs.

Although TicketMaster won't specify how much it has spent to build its on-line outlet, company insiders estimate the cost at $1 million to $1.5 million. But that investment will be recouped over time, officials said. On-line transactions are expected to cost significantly less than the $2 to $5 overhead TicketMaster figures it absorbs for each telephone sale.

``The Internet doesn't totally eliminate the labor cost, but it will cut it down,'' Citron said.

Consumers, however, shouldn't expect big savings at their end. TicketMaster plans to charge on-line buyers the same service fees: an average of $4.50, or an add

itional 14 percent, of the base ticket price.

``We don't know how much usage this will get,'' Citron said. ``If we make it really cheap and get no traffic, what's the point? You've just undercut yourself.''

Much to the company's chagrin, customers can capitalize on human error to outwit the system. The Daily News recently visited TicketMaster Canada's Web site, http://www.ticketmaster.ca, to find tickets for a performance of Hootie and the Blowfish at the Corel Centre in Ottawa, Canada. According to the site, the best available pair of seats were on the floor, 19 rows from the stage.

While on line, a reporter called a TicketMaster operator in Ottawa with the same request. The operator replied that the best available seats were in section 106, Row P - two sections away from the stage and 16 rows off the floor.

TicketMaster Canada officials claimed they had ``no idea'' why there was a difference in the two orders.

Mix-ups over ticket availability, however, are minor issues compared with the fear of on-line credit card theft. To minimize this possibility, TicketMaster uses a widely accepted encryption protocol.

``It's not the transmission of bits of information over the Internet that would cause me concern,'' said Chris Hibbert, a member of the privacy and civil-liberties board of a nonprofit group, Computer Professionals for Social Responsibility. ``It's whether the computer system where they store lots and lots of credit card numbers is actually secure.''

Citron admits any system can be vulnerable to computer pirates, but said, ``We're doing the best we can.''

A greater fear is whether the system will crash when bombarded with on-line requests.

Right now, demand is modest. TicketMaster is selling 150 seats a day in Portland and Seattle. But as that volume grows, eager and aggressive consumers are sure to test the system.

``At a certain point, people stop caring about the costs and the time invested in getting their tickets,'' said Doug Levinson, chief ex

ecutive officer for BASS Tickets, a San Francisco-based ticket agency and TicketMaster licensee.

``All people care about is how good their seat is,'' he said. ``Are they sitting next to the stage? Or are they stuck in the back? For a really popular band, like a U2 or an R.E.M., you'll have thousands of people doing anything they can to get in the front row.''

On-line traffic has proved to be a recurring problem for TicketMaster Canada, an independent licensee that began selling tickets on line in June. Company officials admit their consumers are often frustrated by limited bandwidth.

``The systems we've set up on the Internet are just not big enough or fast enough to handle lots of traffic,'' said Peter Jackson, executive vice president of TicketMaster Canada. ``If they called on the phone and they heard the busy tone, they would immediately understand,'' Jackson said. ``But on the Net? All they see is a blank screen and an hourglass that just won't go away.''

He points to a recent sale for dates by The Tragically Hip, a popular Canadian act. When the box office opened - in real time and on the Web - thousands of people flocked to their phones and computers to snatch up seats.

Some fans got through to the TicketMaster Canada site immediately. Others waited more than 45 minutes.

``When TicketMaster first approached us with this idea, my biggest worry was whether they could accommodate the need,'' said Jake Gold, who manages The Tragically Hip. ``As it turned out, their server wasn't big enough to handle all the transactions at once. It was an interesting experiment. But unless something changes with their server, we won't sell tickets like that again.''

For now, TicketMaster and its independent licensees won't open their Net box offices on the first day of ticket sales for popular concerts.

``We can't create a great system now,'' Citron said. ``It can be good, but there are some very real limits out there that prevent it from being great.''

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Photo: (Color) The TicketMaster Online site allows computer users to buy event tickets through the Web.

Myung J. Chun/Daily News