Ticketmaster is one of the largest ticket sales and distribution companies in the world. Based in Beverly Hills, California, Ticketmaster sells tickets for concert, sports, and theater events in the United States and internationally. The company has become both hugely successful and controversial over its decades of operation.
The origins of Ticketmaster
Ticketmaster was founded in Phoenix, Arizona in 1976 by two computer programmers, Albert Leffler and Peter Gadwa. Leffler had previously founded a ticket service company called Select-A-Seat, which built computer systems to help venues sell tickets. Gadwa also had a background working with computers. Together, they recognized the potential to expand Select-A-Seat into a larger ticketing company.
Leffler and Gadwa approached Ogden Entertainment, a promoter in Arizona, with the idea for their ticketing service. Ogden was frustrated with its current ticketing distributor and decided to take a chance by hiring Leffler and Gadwa’s company, which was incorporated as Ticketmaster. After the successful launch with Ogden, Ticketmaster began expanding into other markets by making deals with venues and promoters.
In 1978, Ticketmaster sold approximately 5 million tickets and went national after landing contracts in Boston and Chicago. Over the next few years, it continued growing rapidly as it acquired smaller ticketing companies. It also benefited as concerts and live entertainment became more popular, creating greater demand for its services.
Ticketmaster’s rise in the 1980s
In 1982, Ticketmaster was bought by its future CEO, Fred Rosen. Rosen had previously worked as a lawyer in the entertainment industry. Recognizing Ticketmaster’s potential, he focused on expanding through mergers and acquisitions of other ticketing companies.
Some key acquisitions by Ticketmaster in the 1980s included:
- 1982 – Acquired Ticketron, one of its early competitors
- 1983 – Acquired Computer Ticket Systems in Boston
- 1984 – Acquired Best Seat in the House based in St. Louis
By the late 1980s, Ticketmaster had established near monopolistic control of ticketing services for major concert venues and promoters in the United States. It provided ticketing for many large arenas and stadiums and had multi-year contracts with most major concert promoters.
Some analysts estimated that by the end of the decade, Ticketmaster was selling over 70 million tickets annually and bringing in over $100 million in revenue. It had succeeded in eliminating or acquiring most of its competition, aided by its early mover advantage in computerized ticketing systems.
Criticisms and controversies
As Ticketmaster grew into a behemoth in the live entertainment ticketing industry, it faced growing criticism and controversy over its business practices. Some of the main accusations against Ticketmaster included:
- Aggressively eliminating competition through acquisitions and exclusivity deals
- Charging high fees that inflated costs for consumers
- Strong-arming venues and promoters with threats to not sell their tickets if they didn’t comply with Ticketmaster’s demands
- Getting involved in ticket scalping and siphoning tickets away from the primary market to be resold at higher prices
Ticketmaster’s dominance of ticketing allowed it to charge service fees of up to 25% on each ticket sold. It also signed exclusive contracts that locked venues into only using Ticketmaster. Many critics argued these tactics stifled competition, leading to higher prices and fees for fans.
In the mid-1990s, Ticketmaster was hit with several lawsuits alleging anti-competitive and monopolistic behavior. One suit from Ticketmaster’s competitor, Tickets.com, resulted in Ticketmaster paying a settlement of $18.5 million in 1999.
Merger with Live Nation
In the 2000s, the rise of the internet brought new forms of competition for Ticketmaster. New ticketing services like StubHub allowed ticket re-selling online, bypassing traditional companies like Ticketmaster. In response, Ticketmaster began investing heavily in technology to remain competitive.
Then in 2009, Ticketmaster made headlines with a merger with Live Nation, the world’s largest concert promoter. The deal, worth $2.5 billion, created a massive, vertically-integrated entity called Live Nation Entertainment that promoted concerts, owned major venues, and sold the tickets.
The merger faced significant opposition over anti-trust concerns. But it ultimately went through after Live Nation agreed to amend certain terms of the deal. Since then, Live Nation Entertainment has continued to grow into the most powerful force in live entertainment.
Ticketmaster today
Now known as Ticketmaster Entertainment, the ticketing company remains a major subsidiary under the Live Nation umbrella. Even with increased competition from challengers like AEG and high-tech startups, it maintains its industry-leading position.
Some key facts about Ticketmaster today include:
- It sells over 400 million tickets per year across 30 countries
- It provides ticketing services for over 12,000 venues and clients globally
- It operates one of the world’s largest ticket resale marketplaces through its ownership of secondary exchange site Vivid Seats
- It is estimated to have around 80% market share of primary ticket sales in major U.S. concert venues
- It generated over $1.5 billion in revenue in 2021
While Ticketmaster has modernized its technology and offerings, complaints still remain about its high fees. Service charges and processing fees average around 25% of the ticket price and can sometimes exceed the face value of tickets on the initial sale.
This continuing controversy has spurred increasing calls for legal reforms and consumer protection regulations on ticketing markets. Scrutiny of Ticketmaster’s dominant position is unlikely to diminish anytime soon.
Conclusion
Ticketmaster has had a long, turbulent history since its inception over 45 years ago. From upstart tech company to industry titan, it has navigated massive growth, game-changing innovations, controversies, and disruptions. Despite recurring criticisms about its fees and market power, the company remains thoroughly embedded in the live event ecosystem.
Moving forward, Ticketmaster faces ongoing challenges from new technologies and competitors aiming to break its dominance. But with its vast resources and infrastructure, Ticketmaster remains well-positioned to maintain its status as the leading ticketing giant. The company that revolutionized ticket sales is poised to continue shaping the future of live entertainment experiences for fans around the world.
