Ticketmaster is one of the largest ticket sales and distribution companies in the world. Founded in 1976, it sells tickets for large-scale events like concerts, sports games, theater shows, and more. Recently, Ticketmaster has come under scrutiny for its high service fees and controversial dynamic pricing model. There are growing concerns about its market dominance in the ticketing industry.
What services does Ticketmaster provide?
Ticketmaster provides a platform for venues and event organizers to sell tickets online and at box offices. It offers the following main services:
– Ticket sales – Ticketmaster enables event organizers to sell tickets online and through its phone and in-person sales channels. Consumers can purchase tickets on Ticketmaster for concerts, sports games, theater shows, and other events.
– Distribution platform – Event venues can use Ticketmaster to distribute their tickets. The company provides the technology to connect inventory systems with its sales channels.
– Data analytics – Ticketmaster offers event organizers data and insights on ticket sales, helping them optimize prices and manage inventory.
– Resale marketplace – Via partnerships, Ticketmaster facilitates ticket resale services so fans can exchange tickets securely. This includes NFL Ticket Exchange and NBA Ticket Exchange.
– Fan-to-fan exchanges – Through its Ticketmaster+ platform, fans can safely resell tickets to other fans. Sellers can set their asking prices.
How does Ticketmaster make money?
Ticketmaster generates revenue through the following main methods:
– Convenience fees – For each ticket sold, Ticketmaster charges service fees to ticket buyers. These fees cover the costs of operating its platform and sales channels. Convenience fees are typically 15-25% of ticket face value.
– Processing fees – Venues pay Ticketmaster a fee per ticket to use its platform and services to sell tickets and manage inventory. These typically range from $0.25-$2.50 per ticket.
– Resale fees – Ticketmaster charges a percentage fee on every ticket resold through its Ticketmaster Resale Services. It generates revenue each time a ticket is resold.
– Data services – Ticketmaster also monetizes its data, offering fan analytics and data-driven insights to its venue and event organizer clients.
What market share does Ticketmaster have?
Ticketmaster dominates the primary ticket sales market, with an estimated 70% market share of major venue primary ticket sales. Some key facts about its market position:
– It is the exclusive ticket provider for hundreds of major venues and sports teams, including the NFL, NBA, and NHL.
– Ticketmaster sells over 500 million tickets annually and grows its inventory each year.
– Over 200 million customers use Ticketmaster for ticket purchases each year.
– It has high market penetration in major live entertainment markets like concerts (estimated 80% market share).
– Ticketmaster has long-term or exclusive ticketing deals with many arenas, stadiums, concert promoters and theaters.
– It has acquired several of its largest competitors including Ticketron, TicketsNow, Paciolan, and more.
Why do people dislike Ticketmaster?
There are several key reasons why Ticketmaster draws criticism from consumers, regulators, and parts of the live entertainment industry:
– High fees – Ticketmaster service and processing fees routinely add 25% or more to every ticket’s face value. Many customers feel these fees are excessive.
– Anti-competitive concerns – Ticketmaster’s dominant market share in major entertainment ticketing sales prompts anti-trust concerns about lack of consumer choice and competition.
– Dynamic pricing – Ticketmaster utilizes demand-based pricing, rapidly adjusting prices for hot-selling tickets. This leads to inconsistency and perceptions of unfairness.
– Lack of transparency – Customers often complain about hidden fees or not understanding true ticket costs until final checkout.
– Customer service – Long wait times and poor customer service during ticket buying have led to negative perceptions of the Ticketmaster brand.
– Fraudulent practices – The company has faced multiple lawsuits over deceptive practices like deliberately withholding tickets to drive up resale prices.
What legal action has Ticketmaster faced?
Ticketmaster has faced its share of lawsuits and legal action over the years:
– Price-fixing – In the 1990s, Ticketmaster paid $18 million to settle a lawsuit alleging it conspired with promoters to inflate service fees by as much as 17%.
– Deceptive practices – The company paid $18 million in 2013 to settle a class action lawsuit alleging it channeled customers towards higher priced tickets.
– Antitrust – Ticketmaster has faced multiple antitrust probes and lawsuits alleging it monopolizes ticketing markets through exclusive deals, which it has denied.
– Fraud – In the late 90s, Ticketmaster employees were found guilty of fraud, hacking competitor systems to gain customer data. The company paid millions in fines.
– Consumer lawsuits – Individual consumers and class action suits have alleged unfair fee practices and misleading representations on true ticket prices.
– Regulatory violations – Ticketmaster has paid fines to regulatory agencies for violations of consumer protection laws in regards to service disclosures.
Are there any Ticketmaster competitors?
Though it dominates the market, Ticketmaster does face some competition in primary event ticketing:
– AEG/AXS – Anschutz Entertainment Group operates AXS Ticketing. It sells tickets for AEG’s network of venues and events.
– Altitude Tickets – Provides ticketing for college sports, small music venues, theaters, and clubs.
– AudienceView – Sells ticketing software focused on performing arts, live theaters, and cultural events.
– eTix – Provides ticketing services for smaller venues, arts centers, clubs, and more.
– Eventbrite – An independent ticketing platform used by many smaller event organizers and venues.
– SeatGeek – An online ticket marketplace that also works directly with teams/venues for some primary ticketing.
– Ticketfly – Focuses on ticketing sales for independent music venues and festivals.
– TicketSauce – Cloud-based ticketing for smaller event organizers.
However, none come close to Ticketmaster’s reach, inventory, and dominance in major entertainment ticketing markets.
What market share do Ticketmaster competitors have?
It’s difficult to find definitive market share data on Ticketmaster’s competitors in the primary ticket sales market. However, here are some estimates on the market penetration of some of the major ticketing platforms:
– AXS Ticketing – Est. 10-15% market share. Has exclusive deals with major venues like Staples Center.
– Altitude Tickets – <5% market share. Focused on niche college and smaller event markets. - eTix - Est. 1-2% market share. Primarily used by smaller clubs, theaters, minor league teams. - Eventbrite - Approx. 10% market share. Popular with DIY/independent event organizers. - SeatGeek - Low single digit market share. Growing with some direct venue/team deals. - Ticketfly - Est. 2-5% market share. Dominates independent music venue market segment. - All other small platforms - Combined 10-15% market share. Ticketmaster maintains 65% or more market share in overall primary ticketing by volume and revenue. Its dominance is even higher in major concert and pro sports ticketing specifically.
What triggered the recent backlash against Ticketmaster?
Ticketmaster faced major consumer backlash in November 2022 over the chaotic ticket sales for Taylor Swift’s upcoming Eras Tour. Specific issues included:
– Website outages – Technical problems on Ticketmaster led to crashes and long wait times during presales. Many fans couldn’t purchase tickets.
– Lack of ticket availability – Due to high demand, most dates sold out rapidly. But Ticketmaster’s approach of staggered presales and limited seat releases exacerbated supply issues.
– High prices – Dynamic demand-based pricing led to extremely high costs, like $2000+ for good seats. Fans were outraged.
– “Dynamic pricing” – Swifties accused Ticketmaster of manipulating supply and leveraging FOMO to drive up prices artificially.
– Cancelled public sale – After presales sold out, Ticketmaster cancelled the planned general public sale citing low remaining inventory. This enraged fans who didn’t get presale codes.
The Swift presale fiasco focused attention on criticisms of Ticketmaster’s hold on the industry, lack of competition, and pricing practices. It triggered renewed political and consumer backlash.
How has Ticketmaster responded to the backlash?
Facing criticism, Ticketmaster has taken the following steps:
– Apologized to Swift and her fans for the “terrible experience” many endured trying to purchase tickets.
– Defended its presale processes as standard practice when managing extremely high demand shows.
– Claimed the biggest issue was unprecedented record-setting demand for Swift tickets, with 3.5 billion total system requests.
– Pledged to improve technical issues exposed and enhance fan experience for future high demand on-sales.
– Held multiple calls with concerned politicians to explain its policies amid antitrust scrutiny.
– Issued refunds to some fans who purchased tickets during presales but had orders cancelled later.
However, beyond apologies and technical fixes, Ticketmaster has not indicated significant changes to its underlying ticketing practices, fees, or market approach in response to the controversy.
Could the backlash lead to Ticketmaster making changes?
The Swift on-sale debacle has refocused a spotlight on Ticketmaster’s business practices. Here are some changes it could potentially make:
– Lower fees – Reduce convenience and processing fees to enhance public perception. But fees remain highly profitable, so drastic cuts seem unlikely.
– Increased transparency – Disclose all fees upfront and provide more clarity on total ticket costs earlier in the buying process.
– Improved technology – Invest heavily in technical upgrades to prevent sales disruptions during high demand on-sales.
– Anti-bot measures – Better safeguards against ticket scalping bots buying up inventory. But Ticketmaster also profits from the secondary market.
– Loosened restrictions – Relax parameters around volume-limited presales and staggered seat releases to increase primary market supply.
– Customer service boost – Reduce wait times and improve support during peak sales periods to ease buyer frustration.
Despite the backlash, Ticketmaster still occupies an entrenched position in the industry given its strong venue partnerships. Meaningful changes to its business model and practices likely depend on the extent of external political, legal, and consumer pressure applied.
Could legal action be taken against Ticketmaster?
The uproar has led some politicians to call for legal action to address concerns about Ticketmaster’s market power. Some ways regulators could respond include:
– Antitrust investigation – Federal regulators could open a probe into whether Ticketmaster’s exclusivity deals and market dominance constitute illegal monopolization.
– Consumer lawsuits – Class action suits alleging deceptive pricing or other harms to consumers are another possibility. Some Swift fans have already filed suit.
– State enforcement – State attorneys general could take action against Ticketmaster for violations of state consumer protection laws.
– Ban on exclusivity deals – Legislators could propose laws banning Ticketmaster from having exclusive ticketing deals with major venues/teams.
– Price gouging laws – Federal or state laws aimed at curbing unreasonable prices during high-demand situations could impact Ticketmaster’s dynamic pricing model.
– Break up Ticketmaster – In an extreme scenario, the DOJ could push to break up Ticketmaster’s business units under antitrust laws, restoring more competition.
But legal experts say the live entertainment ticketing market does not currently breach antitrust statutes enough to force major structural changes. Still, legal action and regulation could potentially rein in some of Ticketmaster’s most controversial practices.
How is Congress responding?
The Ticketmaster-Swift controversy has attracted significant attention from members of Congress:
– Senate antitrust hearing – In January, Ticketmaster’s President is testifying about industry competition issues at a Senate Judiciary antitrust subcommittee hearing.
– Calls for DOJ investigation – Several prominent legislators, including Rep. Alexandria Ocasio-Cortez and Rep. Bill Pascrell, have pushed the DOJ to open an antitrust probe of Ticketmaster.
– Warning letters – Senator Amy Klobuchar and other legislators have sent public letters to Ticketmaster criticizing its practices and pledging closer scrutiny.
– Bills introduced – Some lawmakers have introduced new bills aimed at improving ticket fee transparency and preventing unfair monopolization in ticketing.
– Public criticism – Congressional representatives have issued statements calling Ticketmaster’s practices “predatory”, pledging reform, and demanding answers from its executives.
But Republican lawmakers have generally expressed less enthusiasm for antitrust enforcement against Ticketmaster, making major congressional intervention uncertain. But the attention keeps public pressure on Ticketmaster.
What are politicians proposing to address concerns over Ticketmaster?
Various elected officials have proposed policies aimed at increasing competition, transparency and consumer protections related to Ticketmaster and event ticketing:
– The BOSS ACT – This federal bill would ban exclusive ticketing deals between venues and ticket companies like Ticketmaster to reduce anti-competitive exclusivity.
– Ticket Act – This law would impose disclosure requirements on ticket fees and prohibit fraudulent practices like bait-and-switch pricing tactics.
– BOTS Act – It would crack down on ticket scalping bots that buy up ticket inventory, sometimes diverting it to secondary resale sites.
– All-In Act – This would require “all-in” ticket pricing so all fees are disclosed up front in advertised ticket prices.
– Vetting requirements – Some propose making ticketing companies meet financial vetting requirements to demonstrate capacity to handle large on-sales.
– Price gouging bans – Some federal and state legislators want to prohibit unreasonable price spikes for event tickets during high demand periods.
– Primary ticket limits – Proposals to limit the volume of primary market tickets brokers can purchase to resell at higher prices.
But industry observers caution that some measures could have unintended consequences if not carefully crafted. Expect continued debate on the right policy approach.
What impact could increased competition have?
If Ticketmaster faced more competition in the primary ticket sales market, here are some potential impacts:
– Lower fees – Competitors could put pressure on Ticketmaster to reduce its fees to stay competitive on costs.
– More innovation – Rivals could drive new innovations in ticket buying experiences and push Ticketmaster to improve its offerings.
– Increased choice – Consumers and venues would have more options instead of Ticketmaster’s semi-exclusive grip in some markets.
– Business model shifts – Less market power could force Ticketmaster to rely less on fees for revenue and more on value-driven services.
– Greater access – Competitors grabbing market share could result in more tickets reaching the primary market rather than being diverted for resale.
– Technology upgrades – Competition could accelerate improvements in tickets sales technology, mobile experiences, and anti-bot protections.
– Consumer power – Fans and venues would have more leverage, reducing the need to accept unreasonable ticketing terms.
But dissolving Ticketmaster’s strong position entirely would likely take years given the lengthy venue contracts it currently holds. expects consumer impacts to be gradual rather than revolutionary.
Could Ticketmaster’s practices change without competition?
Given its entrenched market position, could substantial reforms still happen without dismantling Ticketmaster’s dominance? Possibly, but it may require multiple forces:
– Government enforcement – Regulation and fines for consumer abuses could force reforms even without direct competition.
– Consumer pressure – Viral backlashes like the Swift incident must inflict severe PR damage and loss of goodwill to impact policy.
– Legal threats – Class actions suits and antitrust probes could compel Ticketmaster to enact changes to avoid legal liability.
– Artist demands – Marquee acts wield power based on live draw and could demand fairer ticket practices contractually.
– Venue defections – Though unlikely given long-term deals, major venues dropping Ticketmaster could shake up market dynamics.
– Internal changes – Conceivably, new leadership could steer Ticketmaster toward a fan-friendlier mission, though profit motives remain core.
– Industry oversight – Self-regulation agreements within the ticketing sector could curb anti-consumer actions, if enforced diligently.
– Proactive reforms – Ticketmaster could voluntarily adopt more transparent, pro-consumer practices to avoid external solutions being imposed.
Despite recent controversies, wholesale changes still seem doubtful without increased competitive pressure given the incentives of the current business model.
Conclusion
Ticketmaster’s position as the dominant player in the event ticketing market carries profound consumer impacts, magnified by high profile debacles like the Swift on-sale. While the company contends with public outrage and political scrutiny, meaningful reform of its policies and practices likely depends on some combination of enforced regulation, legal action, artist/venue pressure, and increased competition. With its entrenched power, Ticketmaster has limited incentive to voluntarily loosen its grip without external forces demanding change. The company is attempting damage control, but已经 scandal has focused attention on long-standing criticisms. Time will tell if it spurs actual transformation or just momentary public condemnation of the live event ticketing giant.
