Ticketmaster is a dominant force in the live event ticketing industry today, but the company has a long and storied history that traces back to its founding in the 1970s. In this article, we will explore the origins of Ticketmaster and examine how it grew into the ticket sales behemoth that it is today.
The Pre-Ticketmaster Era
Prior to the advent of Ticketmaster in the 1970s, event ticketing worked very differently than it does today. Tickets for concerts, sports games, and other live events were generally sold at the venue’s box office and through a limited number of ticket brokers. This system made it difficult for fans to purchase tickets if they did not live near the venue or have connections with brokers. It also created opportunities for unscrupulous ticket scalping.
Computerized ticketing systems began to emerge in the 1960s, enabling some venues to sell tickets at outlets like department stores in addition to the on-site box office. One of the first automated ticketing companies, Select-A-Seat, was founded in the early 1960s and installed mainframe-based ticketing systems in venues across the U.S. But these early ticketing systems were still limited in reach.
The Birth of Ticketmaster
Ticketmaster was founded in Phoenix, AZ in 1976 by two Arizona State University computer scientists, Gordon Gunn and Peter Gadwa. They recognized the need for a centralized ticketing service that could provide tickets for multiple venues and events at locations across the country. After establishing an early ticketing software system, Gunn and Gadwa approached the promoters of the 1975 world heavyweight championship boxing match between Muhammad Ali and Joe Frazier in Manila, Philippines about handling ticketing. They won the contract and successfully sold over 100,000 tickets, proving the viability of their concept.
Following this success, in 1976 they officially established Select-A-Ticket as Ticketmaster. The company initially focused on signing contracts with venues and promoters to become their exclusive ticketing service. In 1977, Ticketmaster moved its operations to Los Angeles and before long dominated the area’s ticketing market by serving major concert promoters like Bill Graham. This enabled Ticketmaster to sell tickets to big concerts by bands like Led Zeppelin and Pink Floyd.
Ticketmaster’s Growth in the 1980s
In 1982, Ticketmaster made a deal with the City of Los Angeles that granted them the exclusive rights to provide computerized ticketing services for events at city-owned venues. This gave Ticketmaster a huge foothold that included venues like the Greek Theatre and the Los Angeles Forum, home of the Lakers. Within a few years, Ticketmaster had signed similar exclusive contracts in other major cities like New York City and Chicago.
Also in the 1980s, Ticketmaster partnered with Ticketron, which had been one of the early computerized ticketing companies along with Select-A-Seat. As part of the deal, Ticketmaster acquired Ticketron’s exclusive contracts with venues, absorbing their biggest competitor. This expanded Ticketmaster’s reach across the country.
Other innovations by Ticketmaster in the 1980s included introducing dedicated phone lines for ticket sales, implementing barcode scanning for tickets, and rolling out virtual queuing technology to manage high call volumes for popular events.
Rapid Growth and IPO in the 1990s
By the 1990s, Ticketmaster was the dominant player in the event ticketing industry. They continued to sign exclusive contracts with venues and promoters, as well as with now-merged Ticketron’s old clients. Ticketmaster was also bringing in more revenue by adding service fees onto ticket prices.
Some key events in Ticketmaster’s 1990s growth include:
- 1991 – Ticketmaster forms a joint venture with the Chicago-based ticketing firm Dillard’s Ticketing Agency, acquiring their clients.
- 1993 – As internet use grows, Ticketmaster launches its first website Ticketmaster.com to sell tickets online.
- 1996 – Ticketmaster merges with TicketWeb, one of the early online ticketing companies.
- 1996 – Ticketmaster holds its first public stock offering, being listed on the NASDAQ as TMCS.
- 1998 – Ticketmaster expands globally through a deal with UK-based ticketing company SFX Entertainment.
By the late 1990s, Ticketmaster’s dominance of ticketing was nearly absolute within the United States. The convenience of being able to purchase tickets online through Ticketmaster.com only grew their business further.
Ticketmaster in the 2000s
Having effectively eliminated most of its competition in North America, Ticketmaster turned its focus in the 2000s towards global expansion and new technology. They also drew greater scrutiny for their monopolistic hold on event ticketing.
Key developments for Ticketmaster in the 2000s included:
- 2000 – Ticketmaster forms a joint venture with Australian ticketing company Ticketek.
- 2003 – The band Pearl Jam files an anti-trust complaint against Ticketmaster, but the Department of Justice does not take action.
- 2008 – Ticketmaster faces several class action lawsuits alleging deceptive fees added to ticket prices.
- 2009 – Ticketmaster merges with Live Nation in a deal valued at $2.5 billion.
- 2009 – Ticketmaster faces criticism for problems handling ticket sales for Michael Jackson’s comeback tour.
The merger with Live Nation gave Ticketmaster control over ticketing for many major concert venues and promoters. But it also renewed antitrust concerns, though the merger ultimately went through after a DOJ review.
Recent Issues and Changes
In more recent years, Ticketmaster has faced ongoing controversies around issues like service fees and scalping. Some developments include:
- 2010s – Various lawsuits and investigations challenge Ticketmaster’s fees and relationship with resellers.
- 2018 – Ticketmaster comes under fire for problems handling ticket sales for high demand tours like Taylor Swift.
- 2020s – The COVID-19 pandemic forces the widespread cancellation of events. Ticketmaster faces criticism for handling of refunds.
- 2021 – Ticketmaster pays a $10 million fine in a settlement over hacking charges for a data breach.
Ticketmaster has also rolled out new technology like digital tickets using blockchain in the past few years. They continue to hold a dominant market share in event ticketing, though facing increasing competition from rivals like AXS and Eventbrite along with more artists selling direct-to-fan.
Key Facts and Stats
Here are some key facts and statistics about the history and current operations of Ticketmaster:
- Founded: 1976 in Phoenix, AZ
- Founders: Gordon Gunn and Peter Gadwa
- First major ticket sale: 1975 Ali vs Frazier “Thrilla in Manila” boxing match (over 100,000 tickets sold)
- Went public: 1996 (IPO on NASDAQ)
- Merged with Live Nation: 2009
- Annual revenue: $10.9 billion (2021)
- Market share: 70% of primary event ticketing market in U.S. (estimated)
- Tickets sold annually: 500+ million
- Clients served globally: over 12,000 venues and event organizers
The Future of Ticketmaster
Ticketmaster remains in a dominant position within the live event ticketing industry today. But critics argue that Ticketmaster’s market power continues to stifle competition and lead to excessive service fees that hurt consumers.
There are ongoing calls for both regulatory action and free market disruption to Ticketmaster’s business. Some predict that decentralized blockchain-based ticketing platforms may eventually disrupt Ticketmaster the way startups like Uber and Lyft disrupted established taxi and transportation companies through technology and competition.
For now, Ticketmaster’s brand recognition, vast exclusivevenue contracts, and entrenched position in the industry continue to give them a controlling share of event ticketing transactions. But their history also shows a company that had to continually innovate and absorb competitors to maintain market dominance. With today’s accelerated pace of technological change, Ticketmaster will likely face growing challenges to their long-held grip on the ticketing landscape.
Conclusion
Since its beginnings over 45 years ago, Ticketmaster has expanded from a small ticketing startup to a global powerhouse in event ticketing. Their innovations and aggressive expansion strategies allowed them to dominate the industry in North America. While Ticketmaster’s market power has long drawn scrutiny and criticism, they have succeeded in maintaining their position as the primary option for ticketing major concerts, games, and shows.
Going forward, Ticketmaster faces ongoing pressure to reform pricing and improve competition. But they also have deep financial resources, key partnerships, and a recognized ticketing infrastructure that continues to make them a force in event ticketing. The history of Ticketmaster’s rise shows how a well-timed idea and shrewd business moves can allow a company to obtain and solidify market control for decades.
