Ticketmaster and Live Nation are two of the biggest companies in the live entertainment industry. They have come under intense scrutiny in recent years over allegations that their merger in 2010 has led to a near monopoly in the ticketing and live events market.
What is Ticketmaster?
Ticketmaster is a ticket sales and distribution company based in Beverly Hills, California. It sells tickets for live entertainment events on behalf of its clients, which include venues, sports teams and leagues, theater producers, museums, and music acts. Ticketmaster dominates the primary ticket sales market, selling over 500 million tickets per year through its website and mobile apps.
What is Live Nation?
Live Nation is a live events company based in Beverly Hills, California. It was formed in 2005 after Clear Channel Communications spun off its live events division. Live Nation promotes live events globally for artists and owns major venues and Ticketmaster’s primary competitor, Ticketweb. Live Nation is the largest live entertainment company in the world.
The Merger of Ticketmaster and Live Nation
In 2009, Ticketmaster and Live Nation announced plans to merge into a new company called Live Nation Entertainment. At the time, Ticketmaster controlled over 80% of the primary ticket market while Live Nation owned 140 venues and promoted over 16,000 shows per year. The merged company would control ticketing, promotions, major venues, artist management, and artist tours.
The merger raised immediate anti-trust concerns from regulators and competitors. In January 2010, the UK’s antitrust regulator approved the merger on the condition that Ticketmaster sell its stake in its UK joint venture. Later that month, the US Justice Department approved the merger as well but required Ticketmaster to license a copy of its ticketing software to its competitor AEG and subject the combined company to anti-trust oversight for 10 years.
How the Merger Led to a Near Monopoly
Despite the regulatory oversight, the Ticketmaster-Live Nation merger has led to a near monopoly in ticketing and live events:
- Ticketmaster has over 80% market share of primary event ticketing in the US.
- Live Nation owns around 200 major venues and exclusively books shows for the vast majority.
- Live Nation promotes over 30,000 events per year, far more than any competitor.
- The combined company controls the entire vertical supply chain – venues, promotions, ticketing, and artist management.
This vertical integration and lack of competition has allowed Ticketmaster-Live Nation to extract higher fees from fans. Service fees now average 27% of ticket prices and can exceed the face value for hot shows. Captive venues owned by Live Nation are incentivized to use Ticketmaster exclusively.
Evidence of Anti-Competitive Behavior
Critics argue that Ticketmaster-Live Nation has abused its market power in multiple ways:
- Imposing escalating ticket service fees that far exceed the fees of competitors.
- Pressuring venues to use Ticketmaster exclusively through long-term contracts.
- Retaliating against venues that use other ticketing companies.
- Forcing artists to use Ticketmaster for shows at Live Nation venues.
- Leveraging control over tours, venues, and ticketing to extract higher fees from fans.
The company generated over $6 billion in service fees in 2021, mostly from exorbitant add-on fees. Critics argue these fees would not be possible in a competitive market.
Calls to Break Up the Monopoly
Given the anti-competitive concerns, many industry observers and activists have called for breaking up the Ticketmaster-Live Nation monopoly. Some proposed options include:
- Separating the ticketing and promotions divisions into independent companies.
- Requiring Ticketmaster to divest its stake in major venues.
- Prohibiting exclusive ticketing agreements between Ticketmaster and Live Nation-owned venues.
- Banning Ticketmaster’s use of escalating service fees that far exceed costs.
Breaking up the monopoly could introduce much needed competition into live entertainment ticketing. It would likely lead to lower fees and more choices for venues, artists, and fans.
Recent Controversies
The Ticketmaster-Live Nation monopoly has faced fresh criticism over controversial incidents in 2022:
Taylor Swift Eras Tour Outcry
In November, Ticketmaster’s website crashed during presales for Taylor Swift’s Eras tour due to insufficient capacity. Critics said the fiasco highlighted how the ticketing monopoly leads to a terrible user experience.
U.S. Senate Hearing
In January, Live Nation’s CEO was grilled in a Senate hearing over allegations the company abuses its power. Senators questioned Ticketmaster’s exorbitant fees and pressures on venues. Live Nation defended its practices.
Department of Justice Investigation
In July, the DOJ opened a new antitrust investigation into possible abuse of power by Live Nation and Ticketmaster. They are reviewing complaints about attempts to monopolize the ticketing industry.
Conclusion
The 2010 merger of Ticketmaster and Live Nation combined the two largest companies in live entertainment ticketing and events. The result is a near-monopoly that critics argue has led to exorbitant fees, limited choices, anti-competitive behavior, and poor consumer experiences. Persistent complaints about service fees, venue pressures, and abuses of power have led to renewed scrutiny from regulators and calls to break up the monopoly.