Ticketmaster is the largest ticket sales and distribution company in the United States. They sell tickets for many major sporting events, concerts, and other live entertainment events. Some have accused Ticketmaster of having monopolistic control over ticketing at major venues like stadiums. In this article, we’ll examine whether Ticketmaster truly has exclusive control over stadium ticketing and what impact that has on consumers.
Ticketmaster’s Market Share
Ticketmaster sells tickets for over 200 venues and has exclusive ticketing agreements with many major stadiums and arenas. Here are some key facts about Ticketmaster’s market share:
Exclusive Agreements
– Ticketmaster has exclusive ticketing agreements with 70 of the top 100 arenas in the U.S. including Staples Center, Madison Square Garden, and Target Center.
– They are the exclusive ticketing provider for 28 of the 30 MLB teams, 75% of the NFL teams, and have deals with major soccer clubs like Chelsea and Barcelona.
– Many college sports teams also use Ticketmaster exclusively including several major universities like LSU, Texas A&M, and Tennessee.
Concert Tickets
– Ticketmaster sells tickets for over 80% of major concerts and live events. They are the exclusive seller for major promoters like LiveNation and AEG.
– Major artists like Taylor Swift, U2, Foo Fighters, and Justin Bieber use Ticketmaster to sell all their concert tickets.
Market Share
– Ticketmaster claims to sell over 160 million tickets per year and generate over $29 billion in ticket sales revenue.
– They have an estimated 80-90% market share of primary event ticket sales in the United States.
– No other primary ticket seller has more than a 10% market share making Ticketmaster the dominant player.
Why Do Stadiums Use Ticketmaster?
If Ticketmaster has such a dominant position, why do so many major stadiums and venues sign exclusive deals with them? There are several key reasons:
Advanced Ticketing Technology
Ticketmaster has invested heavily in ticketing technology over its 50+ year history. Their platform can handle incredibly high demand events with millions of ticket requests. Venues want a reliable system that won’t crash under heavy loads.
Analytics and Data
With billions in annual ticket sales, Ticketmaster has incredibly detailed analytics on ticket buyers. Venues can use this data for targeted marketing and pricing optimization.
Integrated Resale Marketplace
Ticketmaster owns several major resale/exchange platforms like VividSeats and TicketsNow. This integrated secondary marketplace earns venues more revenue.
Upfront Revenue
Ticketmaster reportedly pays major venues an upfront bonus for signing multi-year exclusive deals. For example, they paid the NFL over $250 million in bonuses in 2009.
Minimized Competition
By using Ticketmaster exclusively, venues avoid promoting competitor ticketing platforms which helps Ticketmaster maintain dominance.
Concerns About the Lack of Competition
While venues have reasons for their exclusive Ticketmaster deals, many fans and consumer rights groups have expressed concerns about Ticketmaster’s dominant position and lack of competition in ticketing:
Higher Fees
Since Ticketmaster faces little competition, they can charge higher fees. Their “convenience” and “processing” fees often add 25-35% to every ticket’s face value.
Reduced Innovation
Critics argue that without competition, Ticketmaster has little incentive to innovate. Their platform offers little more than basic ticket buying and transferring features.
No Consumer Choice
Sports fans, concert goers, and other ticket buyers have no alternative but to use Ticketmaster for major venue events. This removes consumer choice in the marketplace.
Anti-Competitive Contracts
Ticketmaster’s exclusive deals with venues have made it difficult for other ticketing companies to enter the market and compete. The lack of consumer options has attracted anti-trust scrutiny over Ticketmaster’s business practices.
Government Challenges to Ticketmaster’s Market Power
At the federal, state, and municipal level, there have been various efforts to challenge Ticketmaster’s dominance in the ticketing industry by promoting more competition:
DOJ Review of LiveNation Merger
When Ticketmaster merged with concert promoter LiveNation in 2010, the Department of Justice (DOJ) conducted an extensive anti-trust review given LiveNation’s control of major concert venues. The DOJ eventually approved the merger but did institute measures to promote competitive ticketing options.
Class Action Lawsuits
Ticketmaster has faced multiple class action lawsuits accusing them of monopolistic practices and violating anti-trust laws through exclusive venue deals. They paid $386 million to settle one such lawsuit in 2003.
State Legislation
Some states have passed laws prohibiting venues from entering exclusive ticketing agreements. New Jersey passed the Ticket Law in the 1980s which led to venues using multiple ticketing providers.
Municipal Initiatives
Chicago, Las Vegas, and other cities have challenged Ticketmaster contracts with municipally-owned venues. Chicago passed an ordinance in 1991 promoting ticketing competition at city venues.
How Ticketmaster Maintains Their Market Power
Despite regulatory efforts, Ticketmaster remains the dominant primary ticket seller due to both consumer habits and key competitive advantages:
Brand Recognition and Convenience
Ticketmaster benefits strongly from having the most recognized brand in event ticketing. Most consumers default to Ticketmaster for simplicity and convenience.
Difficult Market Entry
Breaking into primary ticketing is difficult and expensive due to the technology involved and the need for extensive venue deals. Upstart competitors often get acquired by Ticketmaster.
Revenue Sharing Deals
Ticketmaster offers venues a percentage share of the lucrative service fees. This incentivizes venues to maintain exclusive contracts.
Vertical Integration
By owning secondary resellers like StubHub and controlling promoters like LiveNation, Ticketmaster dominates multiple tiers of live entertainment ticketing.
Aggressive Lobbying
Ticketmaster spends millions on state and local lobbying to influence ticketing-related legislation in their favor.
Alternative Ticketing Platforms
Despite Ticketmaster’s dominant market share, there are some alternative primary event ticketing platforms consumers can use:
AXS
AXS is owned by AEG and is the 2nd largest primary ticket seller in the U.S. They sell tickets for AEG venues like Staples Center and also have deals with other major arenas.
Etix
Etix is a smaller ticketing company that services mid-size venues, theaters, and minor league sports teams. They have lower fees than Ticketmaster.
Eventbrite
Eventbrite focuses on smaller music venues and local event ticketing. They provide free ticketing services for free events.
Band Websites
Some bands like Pearl Jam sell tickets directly through their websites to avoid Ticketmaster fees, but this is rare.
Venue Box Offices
Buying tickets directly from the venue box office avoids fees but is less convenient and has availability limitations.
Could More Competition Lower Ticket Prices?
More competition in ticketing could potentially lead to lower prices for consumers. Here are some of the possible effects:
Reduced Fees
With multiple ticketing options, venues may be incentivized to negotiate lower ticketing fees to attract fans.
Innovative Platforms
New ticketing platforms could emerge with better experiences for ticket buyers/sellers and fewer add-on costs.
General Price Pressure
In a more competitive market, ticketing companies would likely have to restrain some pricing to maintain venue deals.
However, there are also factors that could limit the impact of increased competition:
Venue Profit Seeking
Venues earn revenue from ticketing services and may not be inclined to reduce their income source.
High Market Demand
For major concerts and games, high ticket demand enables sellers to charge higher prices regardless of competition.
Established Ticketing Ecosystem
Shifting consumer behavior away from the established Ticketmaster brand would be difficult.
Could Reselling Be an Alternative for Consumers?
The secondary ticket resale market has grown significantly as an alternative way for consumers to access popular event tickets. Sites like StubHub, VividSeats, and eBay enable ticket reselling. Here are some of the pros and cons of this option:
Pros
– Provides ticket availability when primary sellers are sold out
– Offers potential discounts on highly demanded tickets
– Gives fans an ability to resell their own tickets easily
Cons
– Resale prices are often inflated well above face value
– Buyers incur both resale platform fees and original ticketing fees
– Ticket authenticity and buyer protections can be unclear
– Does not resolve issues with primary seller lack of competition
While growing in use, the secondary market is not yet a full replacement for more competitive primary ticket sales platforms.
Government Regulation of Ticketing
Some argue the live entertainment ticketing industry requires greater government regulation to improve competition. However, others believe the market is best served by minimal regulation. There are fair arguments on both sides:
Arguments for More Regulation
– Current lack of competition has clearly raised prices for consumers.
– Government oversight is required to break up entrenched monopolistic companies.
– Venues receive public subsidies and should serve public’s interest in choice.
Arguments Against Regulation
– Ticketing is not an “essential” industry requiring oversight.
– Free market principles enable efficient companies like Ticketmaster to thrive.
– Regulation risks government overreach and unforeseen negative impacts.
– Existing anti-trust laws already provide regulatory protection.
There are good-faith debates on both sides of this issue when evaluating consumers’ interests, business freedoms, and free market dynamics.
Conclusion
Ticketmaster dominates the primary event ticketing market with exclusive deals at the majority of major venues in the United States. This lack of competition has likely contributed to increased fees and limited incentive for technological innovation. Efforts by regulators and competitors to break up their market control have thus far achieved minimal impact. However, high consumer demand and venue profit-seeking have also enabled Ticketmaster’s market power. Despite some alternatives, tickets for premium stadium concerts and sporting events still primarily flow through the Ticketmaster ecosystem. Greater competition could potentially lower prices for consumers, but may be difficult to achieve in reality. It remains a complex public policy challenge balancing consumer concerns, business interests, and market dynamics. Increased transparency and fair venue deals that balance control and choice are worth striving for.
