Ticketmaster has dominated the primary ticket sales market in the United States and Canada for decades. While there are some competitors in the ticketing space, Ticketmaster maintains a strong grip on major venues and top artists. However, recent developments have led some to question whether Ticketmaster still maintains an effective monopoly.
What is a monopoly?
A monopoly exists when a company has significant market power and barriers exist to prevent competition. A few key signs of monopoly power include:
- The company controls a very large share of the market, often over 70-80%.
- The company can influence prices and output.
- High barriers prevent new competitors from entering the market.
- The company can maintain market dominance over a long period.
These factors allow a monopoly to engage in anti-competitive practices, charge higher prices, and restrict consumer choice. Antitrust regulators often try to promote competition to reduce monopolistic power.
Ticketmaster’s dominance
Ticketmaster first started selling tickets in the 1970s and quickly grew through contracts with large venues and deals with promoters like Live Nation. For many years, Ticketmaster controlled 70-80% of major venue ticket sales:
Year | Ticketmaster Market Share |
---|---|
1982 | 70% |
1995 | 80% |
2001 | 60% |
2010 | 70% |
Ticketmaster benefited from exclusive long-term contracts with promoters and major venues. These contracts prevented competitors from entering the primary ticket sales market. Ticketmaster also integrated vertically by acquiring concert promotion companies.
Controlling prices and fees
With its market power, Ticketmaster has been able to charge high fees on each ticket sold. Service fees, processing fees, and order charges can comprise 25-50% of a ticket’s face value. Some analysts accused Ticketmaster of monopolistic price gouging.
Ticketmaster also utilized variable “market-based” pricing where ticket prices fluctuate based on supply and demand. Fans criticized this practice for making popular shows too expensive.
Fighting competitors
When new competitors tried to challenge Ticketmaster, they found it extremely difficult to compete. Ticketmaster leveraged long-term exclusive deals and integration with promoters and venues to block new entrants.
For example, in the early 2000s, Tickets.com began selling primary market tickets but eventually filed an antitrust lawsuit against Ticketmaster. Tickets.com claimed it could not fairly compete due to Ticketmaster’s exclusive deals. After years of litigation, Ticketmaster reached a settlement agreement with Tickets.com in 2008.
Recent challenges to the monopoly
In the past decade, Ticketmaster has faced new pressures that some argue have broken its stranglehold on ticketing:
Department of Justice antitrust probe
In 2009, Ticketmaster proposed a merger with Live Nation that would create a giant integrated concerts company. The Department of Justice conducted an antitrust review and only approved the merger under certain conditions.
Most notably, the DOJ settlement barred Ticketmaster from retaliating against venues that partnered with competing ticket companies. This opened the door for venues to experiment with new ticketing platforms.
Competition from startups
A new wave of ticketing startups emerged that were no longer intimidated by Ticketmaster’s exclusive deals after the DOJ settlement. Companies like Eventbrite, AXS, and SeatGeek offered ticketing directly to venues and event organizers.
Ticketing Competitor | Year Founded |
---|---|
Eventbrite | 2006 |
SeatGeek | 2008 |
AXS | 2011 |
These new players were able to chip away at Ticketmaster’s dominance in specific markets and venues. For example, AXS became a ticketing partner for large venues like STAPLES Center and L.A. Live.
Direct ticket sales
Some bands and artists began selling tickets directly to fans instead of using Ticketmaster. Legacy acts like Pearl Jam and The Grateful Dead pioneered direct fan ticketing. Younger artists like Louis Tomlinson have followed suit more recently.
Direct-to-fan ticketing cuts out services fees and gives artists and promoters greater control. It poses a long-term threat to Ticketmaster’s business model.
Does Ticketmaster still have a monopoly today?
Ticketmaster remains the dominant primary ticketing company in North America and globally. According to company reports, Ticketmaster still accounts for 70%+ of major concert venue ticket sales.
However, Ticketmaster’s market share has declined slightly in recent years due to competition. Reports estimate the company now commands between 60-85% of primary ticketing sales depending on the specific market.
While Ticketmaster may no longer have an ironclad monopoly, it still maintains a dominant position in the industry. Some analysts argue its market power still harms consumers and allows anti-competitive behavior.
Ticketmaster advantages
Here are some of Ticketmaster’s ongoing advantages:
- Exclusive long-term contracts with major venues and promoters
- Unrivaled size and scale serving major markets
- Owns substantial ticket inventory via Live Nation concerts
- High barriers to large-scale entry remain
These factors continue to make true competition very difficult. Rival ticketing companies lack comparable inventory depth and geographic breadth. Ticketmaster also uses aggressive tactics when needed to maintain its strong position.
Calls for more competition
Some consumer rights groups still allege that Ticketmaster engages in monopolistic behavior. Complaints include:
- Abuse of market power over ticket prices and fees
- Hampering competition through restrictive contracts and vertical integration
- Stifling innovation that could benefit consumers
As a result, calls remain for regulators and the live events industry to crack down on Ticketmaster’s dominance. More competition could potentially spur better service, fairer prices, and more innovation. However, Ticketmaster’s entrenched position continues to pose obstacles.
Conclusion
Ticketmaster’s once unambiguous monopoly has eroded over the past decade but its market power remains substantial. The company still commands 60-85% market share in key ticketing markets – down from a peak of 80% but still dominant.
Recent competitive pressures from startups, direct ticketing, and antitrust enforcement have loosened Ticketmaster’s grip. However, high barriers, exclusivity agreements, and aggressive tactics keep rivals at bay.
Ticketmaster is likely to remain the dominant primary ticketing player for major concerts and events in the near future. However, if regulators and the industry support more competition, Ticketmaster’s monopoly could continue to decline.