Ticketmaster is a major ticket sales and distribution company based in Beverly Hills, California. It sells tickets for live entertainment events on behalf of various clients, such as venues, promoters, sports teams and leagues. Ticketmaster has become the dominant ticketing service, with a market share exceeding 80% in the United States.
Ticketmaster’s Ownership History
Ticketmaster was founded in 1976 by computer programmers Albert Leffler, Peter Gadwa and Gordon Gunn. It initially sold tickets for clients using computerized ticketing systems. In 1982, Ticketmaster was purchased by Jay Pritzker, an American entrepreneur and business magnate. Pritzker helped to grow the company into the nation’s leading ticket distributor during the 1980s.
In 1993, Ticketmaster merged with Ticketron, one of its major competitors at the time. This left Ticketmaster with over 200 ticket centers nationwide. In 1996, USA Networks, which owned Ticketron, spun off its ticket sales business and founded Ticketmaster Group Inc. Ticketmaster Group then began purchasing other ticketing companies to expand its operations globally.
In 1998, Ticketmaster Group merged with online city guide CitySearch to form Ticketmaster Online-CitySearch. The new company aimed to integrate Ticketmaster’s ticket sales with local event information provided by CitySearch. In 2000, USA Networks bought Ticketmaster Online-CitySearch for $715 million.
In 2008, Ticketmaster merged with Live Nation in a $2.5 billion deal. Live Nation was the largest concert promoter in the U.S. at the time. The merger created the new company Live Nation Entertainment. This gave Ticketmaster control over ticketing for many of the events Live Nation promoted.
Today, Ticketmaster continues to operate as a subsidiary of Live Nation Entertainment. Though it has competitors in the ticketing industry, it still commands the majority of the ticket sales market. Live Nation Entertainment is the world’s leading live entertainment company, boasting $11.2 billion in revenue in 2021.
Criticisms of Ticketmaster’s Monopoly
Throughout its history, Ticketmaster has faced criticism over its near-monopoly in the ticket sales market. Some concerns raised about Ticketmaster’s dominance include:
- High service fees – Ticketmaster service fees, which can make up 20-30% of a ticket’s face value, are deemed excessive by many consumers.
- Lack of competition – The lack of serious competitors allows Ticketmaster to charge higher fees. Some competitors like AEG and Eventbrite emerge but have a fraction of Ticketmaster’s market share.
- Captive ticketing deals – Ticketmaster signs long-term exclusive deals with major venues and promoters, so the primary ticket seller for events is Ticketmaster.
- Stifling innovation – Critics argue Ticketmaster’s dominance removes incentives for the company to innovate and improve services.
However, despite the criticisms, Ticketmaster has maintained its leading position in North America. The high barriers to entry including high fixed costs, strong branding power, and pre-existing exclusive deals make it difficult for competitors to take significant market share.
Antitrust Lawsuits
Ticketmaster has faced multiple lawsuits alleging it unfairly dominates the ticket market. Two notable antitrust cases against the company include:
Pearl Jam Ticketmaster Boycott (1994-95)
In the early 1990s, the rock band Pearl Jam decided to boycott Ticketmaster over its excessive service fees. They opted to use Ticketmaster competitor Ticketron for their 1994 tour. However, the band ran into difficulties finding suitable venues since most had exclusive contracts with Ticketmaster.
Pearl Jam filed an antitrust complaint against Ticketmaster in 1994, alleging it had engaged in anti-competitive monopolistic practices. Their case brought wider public attention to Ticketmaster’s lack of competitors in the industry. Ultimately, Pearl Jam dropped their lawsuit after a lengthy legal battle.
TicketsNow Lawsuit (2003)
In 2003, Ticketmaster was sued for having undisclosed business connections to TicketsNow, a large online ticket reseller. Ticketmaster had acquired TicketsNow in 2008 but posed the company as an independent secondary ticket marketplace.
The lawsuit alleged Ticketmaster was inflating prices on primary ticket sales, then profiting off higher resale prices through TicketsNow. The case exposed some anti-competitive practices within Ticketmaster. The company settled the lawsuit in 2013 for $23 million.
Ticketmaster’s Acquisition Strategy
A key part of Ticketmaster’s growth has been an aggressive strategy of acquiring smaller ticketing companies. Its major ticketing acquisitions have included:
Company | Year Acquired |
---|---|
Ticketron | 1993 |
Tickets.com | 2001 |
Getmein.com | 2007 |
Paciolan | 2008 |
TicketsNow | 2008 |
LN Europe | 2010 |
Ticketbis | 2018 |
This strategy has allowed Ticketmaster to expand into new markets and eliminate upstart competitors. Critics argue this has solidified Ticketmaster’s monopoly position within the live entertainment ticketing industry.
Ticketmaster’s Fees and Services
Part of what makes Ticketmaster dominant is the range of ticketing services it provides. Ticketmaster handles the entire ticket sales process on behalf of clients. It provides the following services:
- Online and mobile ticket sales
- In-person ticket sales at box offices
- Print-at-home ticketing
- Ticket delivery and distribution
- Dynamic pricing algorithms
- Ticket resale through secondary markets
- Ticket fraud detection
- Ticket inventory management
- Marketing and analytics
For these services, Ticketmaster charges fees to both the consumer and the event host. Its major fees include:
- Convenience fees – Charged to ticket buyers for online/mobile purchases
- Processing fees – Charged to ticket buyers for each ticket bought
- Service fees – Charged to event hosts for Ticketmaster’s services
- Order processing fees – Charged to event hosts for each ticket sold
These types of fees can add a substantial cost to tickets. Some event tickets may bear over 25% in additional fees when buying through Ticketmaster.
Live Nation’s Impact on Ticketmaster
Ticketmaster’s 2008 merger with Live Nation brought two dominant players in live entertainment together. Live Nation controls many aspects of the live music business, including:
- Artist management
- Music promotion
- Venue ownership
- Sponsorship and licensing
After the merger, Live Nation began packaging ticketing deals together with its other music services for clients. For example, it may give a venue a better deal on artist bookings if they agree to also use Ticketmaster for ticketing.
Some analysts argue this bundling strengthens Ticketmaster’s position, as clients now depend on Live Nation’s other services. Others say it is a logical vertical integration, since Ticketmaster can now offer clients a wider range of music industry services.
Future Outlook
While Ticketmaster remains dominant in ticketing, its market share has declined slightly in recent years. Some see emerging competitors like AEG and Eventbrite as signs of growing competition in the industry.
However, Ticketmaster is unlikely to be unseated as the primary ticketing service for major live entertainment events. Key advantages like its brand power, breadth of services, and integration with Live Nation make Ticketmaster’s position quite secure for the foreseeable future.
Nonetheless, expect ongoing controversies and complaints about Ticketmaster’s power within the live event ticketing sphere. As long as high ticket fees and exclusive deals persist, many consumers will continue rallying against its effective monopoly.
Conclusion
Ticketmaster has gone from a small ticketing startup in the 1970s to the undisputed leader in event ticketing today. It has weathered lawsuits, public backlash, and criticism of its monopoly-like power. Yet Ticketmaster remains standing by providing key services to live event hosts and continuously expanding its operations.
While fans may resent the company’s dominance and high fees, Ticketmaster has become an essential part of the live entertainment ecosystem. Its ticketing technology, ticket distribution infrastructure, and integration with other entertainment services keep it firmly positioned as the ticket sales powerhouse.