Ticketmaster is the market leader in ticket sales and distribution for live entertainment events in the United States. Many argue that Ticketmaster has an effective monopoly in the primary ticket market for major concerts and shows. Here is an examination of Ticketmaster’s market position and why some consider it a monopoly.
Ticketmaster’s Market Share
Ticketmaster sells tickets for the vast majority of major concerts and live entertainment events in the U.S. By some estimates, Ticketmaster sells over 70% of all primary market tickets for concerts, sports events and theater shows. This includes tickets sold directly through Ticketmaster’s website and mobile apps as well as tickets sold through official box offices at venues, many of which exclusively use Ticketmaster’s technology and services.
No other primary ticket seller comes close to Ticketmaster’s market share. StubHub, SeatGeek and AXS are some of the other big players in ticketing, but they focus more on secondary ticket sales (re-sales and exchanges). In the primary market, Ticketmaster thoroughly dominates.
Exclusive Venue Deals
One reason Ticketmaster has such a high market share is that it has exclusive contracts with many major venues and event promoters. Venues that have deals with Ticketmaster sell all their tickets through Ticketmaster and do not allow other primaries to sell their inventory.
According to a monitored study by the Government Accountability Office, more than 30 percent of major concert venues had exclusive deals with Ticketmaster as of 2018. Many of these are long-term contracts, some spanning over 10 years.
Some of the major venues and promoters that have exclusive Ticketmaster deals include:
- Live Nation – Owned by Ticketmaster, Live Nation is one of the largest concert and event promoters in the world. All Live Nation venues and events only sell tickets through Ticketmaster.
- MSG – New York City’s Madison Square Garden uses Ticketmaster as its exclusive ticketing service.
- Hollywood Bowl – The famous Los Angeles concert amphitheater has a deal with Ticketmaster.
- Fenway Park – Boston Red Sox baseball games at Fenway Park can only be bought through Ticketmaster.
With exclusive deals at so many popular venues, competing primary ticketing companies are locked out from selling a large portion of ticket inventory for marquee events.
Promoter and Artist Relationships
Ticketmaster also has close relationships with promoters and talent managers across the live entertainment industry. These relationships help secure Ticketmaster as the go-to ticketing service for major concert tours and shows.
For many big concerts, Ticketmaster essentially serves as the box office for the entire tour. It will handle all ticketing operations across all venues in different cities. Smaller primary ticketing companies lack the scale and connections to facilitate these type of nationwide tours the way Ticketmaster can.
Additionally, Ticketmaster pays out millions annually in rebates and revenue sharing agreements with venue owners, promoters and managers. These financial incentives make Ticketmaster an appealing partner and make it harder for newcomers to compete.
Advanced Technology and Data
Over its 40+ year history, Ticketmaster has developed sophisticated ticketing technology that now processes over 500 million ticket transactions per year. Its platform can handle huge real-time traffic spikes when tickets go on sale.
Ticketmaster also has detailed consumer data and purchase history, allowing them to better predict demand forecasting, dynamic pricing and identify high-value customers.
New entrants in primary ticketing do not have Ticketmaster’s decades of technology development and data collection advantages. This makes it difficult for them to replicate Ticketmaster’s platform capabilities and efficiency.
Consumer Habit and Brand Recognition
Ticketmaster also benefits from strong brand recognition and consumer habit. For many fans, Ticketmaster is viewed as the default place to buy tickets online. Even if there are other options available, Ticketmaster will often be the first site a customer checks for event tickets due to its dominance in the market.
Competing ticketing companies need to spend substantial marketing dollars on advertising and promotions to get their brand name out there. Ticketmaster’s brand is already widely known.
Barriers to Entry for Competitors
The factors discussed make it extremely difficult for would-be competitors to take significant market share away from Ticketmaster:
- Exclusive venue deals lock out competitors from selling large amounts of major event ticket inventory.
- Financial incentives encourage partners to continue using Ticketmaster.
- Technological and data advantages cannot be easily replicated.
- Strong branding and consumer habit favor Ticketmaster.
A new primary ticketing company would likely have to suffer years of losses while trying to build market share. The high costs and difficulty of competing with Ticketmaster effectively creates barriers to entry that maintain its market dominance.
Oversight Has Historically Been Limited
For many years, Ticketmaster’s business practices went largely unscrutinized by regulators and oversight agencies. However, there has been increased attention in recent years as live event tickets continue to grow more expensive for fans.
In 2009, Ticketmaster and Live Nation merged together, combining the largest ticketing service with the largest concert promoter. The Department of Justice approved the merger but with some conditions on their operations in hopes of maintaining competition. Additional DOJ reviews in 2019 and 2022 have required further conditions.
Some politicians have also called for greater oversight of Ticketmaster and the live event ticketing industry. Legislation in some states has been proposed aimed at giving fans more transparency and making tickets more affordable.
But so far, Ticketmaster remains dominant and there has been no major intervention by regulators to actively break up or curb their market position and business practices.
Why Some Consider it a Monopoly
Ticketmaster does not have an absolute, pure monopoly in primary ticketing. There are some competitors, and venues are free to choose other primary ticketing services if they wish. However, Ticketmaster’s market power and barriers to entry come very close to a being a de facto monopoly.
The U.S. Justice Department commonly uses a Herfindahl-Hirschman Index score above 2,500 to indicate a highly concentrated industry. The score is calculated by squaring market share percentage for each firm and summing the results. For major concert venues in 2018, Ticketmaster’s share alone produced a score of over 5,000 indicating an industry monopoly.
Additionally, Ticketmaster can be considered a monopoly because it effectively sets prices across the live entertainment ticketing industry. Economic theory states that monopolists will charge higher prices and restrict output in order to maximize profits.
Many consumer advocates argue that Ticketmaster’s fees and charges are excessively high, draining money from fans to benefit Ticketmaster. The lack of competition allows Ticketmaster to charge high fees that a more competitive market likely wouldn’t bear.
Conclusion
While not a pure monopoly in the textbook sense, Ticketmaster exhibits many monopolistic characteristics. Through exclusivity deals, incentives, advanced technology, branding and other factors, Ticketmaster has developed a dominant market position with high barriers to entry for competitors. This lack of viable competition in the primary ticket market enables Ticketmaster to charge high fees and retain pricing power to the detriment of consumers. Increased oversight of the ticketing industry may be needed to improve competition, transparency and fairness for live entertainment fans.