The merger between Ticketmaster and Live Nation in 2010 created a juggernaut in the live entertainment and ticketing industry. The combined company, Live Nation Entertainment, now controls ticketing, promotions, venue operations, and artist management. This consolidation has raised concerns about the lack of competition in the industry and its potential impacts on consumers and artists.
What businesses merged to create Live Nation Entertainment?
Prior to the merger, Ticketmaster was the world’s largest ticket sales and distribution company. Live Nation was the world’s largest promoter and venue operator. By merging, the two companies integrated their ticketing, promotions, venue operations, and artist management businesses under one roof.
Ticketmaster brought its ticketing platform and technology to the merged company. This included its online ticketing websites, ticket resale services, and distribution network of retail outlets. Live Nation contributed its promotion and venue management expertise. As the world’s largest promoter, Live Nation contracted directly with artists to organize tours and performances. It also owned, operated, or had exclusive booking rights for major venues across the globe.
Why did Ticketmaster and Live Nation merge?
Prior to the merger, the companies had an ongoing business relationship. Ticketmaster provided ticketing services for the majority of events and venues owned or contracted by Live Nation. Bringing the two companies together allowed them to streamline operations and reduce costs associated with their partnership.
The merger also gave the combined company more leverage in contract negotiations with artists. With integrated promotions, venues, ticketing, and artist management, Live Nation Entertainment controls significant access points to concert audiences. This consolidated bargaining power benefits the company in negotiations.
What were the concerns about the merger?
A central concern was that the new Live Nation Entertainment would have a near monopoly on major segments of the live music business. Prior to the merger, Ticketmaster controlled over 80% of the primary ticket market. Live Nation owned, operated, or had exclusive rights with a large percentage of major venues and amphitheaters. Combining these two industry heavyweights raised fears about reduced competition.
Additional concerns included:
- Lack of consumer choice – With few ticketing and promotional options outside Live Nation, consumers could face higher fees and prices.
- Higher barriers for new artists – Emerging artists may struggle breaking into Live Nation venues and promotions.
- Venues locked into exclusive contracts – Independent venues may be pressured into long-term exclusive deals with Live Nation, limiting their options.
Critics argued that an independent Ticketmaster and Live Nation would continue to compete for business, providing more options for artists and consumers. They feared that reduced competition from the merger could drive up prices and make the industry inhospitable for smaller, independent players.
What concessions did Live Nation Entertainment make to get merger approval?
The U.S. Department of Justice conducted an in-depth investigation into the proposed merger. Ultimately, it negotiated a settlement agreement with Live Nation Entertainment to address the most pressing competition concerns. Live Nation Entertainment agreed to these conditions for 10 years after merging:
- Cannot retaliate against venue owners who do business with other promoters or ticket companies.
- Cannot bundle promotion and ticketing deals without offering the option to purchase individually.
- Cannot force artists to use Ticketmaster or Live Nation concert promotion services.
- Must license Ticketmaster’s ticketing software to competitors.
These concessions were designed to keep the ticketing and promotions markets open to competitors. However, critics argued these did not go far enough in addressing issues of high market concentration.
Has the merger reduced competition?
Research suggests that competition has declined in some areas since the merger:
- Ticketmaster’s share of major event ticketing rose from around 70% pre-merger to 80-90% by 2018.
- Live Nation’s share of the top 100 arenas, amphitheaters, and clubs was 68% in 2018, up from 38% pre-merger according to one analysis.
- Smaller regional promoters have struggled to compete, with the number of small promoters reportedly declining over 30% by 2018.
However, Live Nation argues the ticketing market remains competitive. They point to new technologies from companies like Eventbrite that allow more direct artist-to-fan ticketing.
Ticket Prices and Fees
Whether the merger has impacted ticket prices is also debated:
- According to Ticketmaster, average ticket prices declined 6% from 2010 to 2018 when adjusted for inflation.
- However, some analysts argue prices likely would have fallen further if the ticketing market was more competitive.
- Critics also argue that services fees have jumped substantially, offsetting any declines in base ticket prices.
More research is needed to fully analyze price and fee trends in recent years.
What does this mean for consumers?
For concert goers, the merger’s impacts are mixed so far:
- Less choice – With fewer promoter options for top tours outside Live Nation, consumers have fewer options for promoters that may offer lower prices.
- Higher fees – Service and convenience fees, which compensate Live Nation and Ticketmaster, have been increasing by some accounts.
- More vertical integration – Some consumers benefit from bundles like venues with premium tickets that include access to VIP areas and beverage credits.
- More focus on major artists – Independent venues that spotlight emerging talent have declined in some regions.
Many consumers feel captive to the Ticketmaster system given its dominance over major concerts and events. But so far, the merger does not appear to have radically changed the concert experience for most fans outside of higher fees.
What are the impacts on artists and the industry?
The merger’s effects on artists and smaller industry players are more clearly negative:
- Higher barriers for up-and-coming artists – Fewer independent promoters makes it harder for new artists to find venues and concert opportunities outside Live Nation.
- More leverage for Live Nation over artists – With control of so many tour dates, venues, promotions, and the dominant ticketing system, Live Nation has negotiating power that can pressure artists on tour deals.
- Exclusive venue contracts – Locking popular venues into exclusive long-term deals with Live Nation further solidifies barriers for independent promoters and emerging artists.
While mega-stars like U2, Madonna, and Jay-Z benefit from Live Nation’s integrated services, small and mid-size artists have fewer options and pathways to build their careers outside the Live Nation ecosystem.
Is Live Nation a monopoly in live music?
Despite controlling an estimated 70% of major U.S. amphitheaters, 60% of major U.S. arenas, and 80-90% of primary event ticketing, Live Nation Entertainment does not have an outright monopoly over the live music industry:
- Artists, especially top performers, still have options to book shows at independent venues and use other ticketing platforms like AXS and SeatGeek.
- Independent promoters like Golden Voice (Coachella) and Insomniac Events (Electric Daisy Carnival) continue operating successful festivals and tours outside Live Nation.
- Smaller clubs, theaters, and music halls provide venues for emerging local artists to develop and perform.
Additionally, Live Nation Entertainment is not vertically integrated across every live music sector. For example, they do not manufacture instruments or music equipment that artists require.
However, Live Nation inarguably controls outsized market share in promotions, major venues, and ticketing. This gives them substantial influence to shape artist tours, ticket prices, and the overall live concert experience that some argue should not rest in the hands of a single corporation.
Could Live Nation be forced to split up in the future?
A break up of Live Nation Entertainment into smaller, independent ticketing, promotions, and venue companies is unlikely in the near future. However, there are scenarios where forced divestiture could occur:
- DOJ moves to reopen the consent decree – If evidence shows the merger substantially harmed competition, DOJ could try renegotiating the agreement.
- Live Nation violates consent terms – Documented violations of consent terms could prompt DOJ action.
- Political pressure for antitrust reform – A future administration could take a harder stance on corporate mergers and seek to split up Live Nation.
Absent these scenarios, market-driven new entrants like DICE or partnerships between regional promoters are more likely to chip away at Live Nation’s dominance rather than large-scale break ups. Still, calls for scrutiny of Live Nation’s power are likely to continue given ongoing concerns about concentration in the live music industry.
What’s next for the live music and ticketing industry?
Looking ahead, key trends to watch include:
- Premium experiences – VIP packages, amenities like flexible seating platforms, and bundled travel/accommodations will expand as Live Nation leverages its venues.
- Dynamic pricing – Utilizing demand data to adjust ticket prices means some seats may get more expensive.
- Mobile ticketing – Print-at-home and PDF tickets will decline as mobile-only tickets become more prevalent.
- Reselling partnerships – Deals between Live Nation’s Ticketmaster and resellers like StubHub will aim to capture more secondary sales.
- Competing technologies – Blockchain, biometrics, and other innovations may disrupt Live Nation’s ticketing dominance long-term.
Despite commanding the live music landscape today, Live Nation Entertainment cannot afford to stand still. Competitors and new technologies that improve the fan experience will continue pushing the company to adapt and evolve.
Conclusion
The Live Nation-Ticketmaster merger generated intense scrutiny over its potential to damage competition and consumer choice in live entertainment. While it has not (yet) produced the draconian outcomes some predicted, evidence suggests less competition and rising ticketing fees have resulted. Artists and smaller industry players also face higher barriers from the merger.
With its tremendous scale, Live Nation Entertainment shapes much of the live concert experience across promotions, major venues, ticketing, and artist deals. Increased vertical integration has likely both benefited and squeezed consumers and artists in different ways. Going forward, the merger will continue to be a flashpoint in debates over industry consolidation and the intersection of arts and corporate power.