In recent years, there has been growing criticism of Ticketmaster and accusations that it operates as an unfair monopoly in the ticket sales industry. Ticketmaster is the largest primary ticket outlet in the United States, selling tickets for concerts, sports events, theater shows, and more. It sells tickets through its website, mobile apps, phone lines, and box office outlets. Critics argue that Ticketmaster abuses its dominant position in various ways that limit competition and consumer choice.
Ticketmaster’s market share
Ticketmaster has an enormous share of the primary event ticket market in the US and globally. By some estimates, Ticketmaster sells over 70% of primary market tickets for major concerts and shows in America. This gives it significant power over both event organizers and consumers looking to purchase tickets.
In many markets, Ticketmaster faces limited competition. It has contracts with the majority of arenas, stadiums, theaters, and other major venues across the US. As a result, if you want to attend an event at one of these venues, you generally have to purchase tickets through Ticketmaster as it is the exclusive ticketing service. This lack of consumer choice has led to monopoly accusations.
Exclusive ticketing contracts
A key part of Ticketmaster’s dominant position is its exclusive contracts with venues. Ticketmaster commonly signs multi-year exclusive deals with arenas, concert halls, and stadiums to be their only ticket sales vendor. With these exclusive contracts, any event that wants to use that venue is forced to sell tickets through Ticketmaster.
These exclusive contracts lock out competitors and make it very difficult for other primary ticket sellers to effectively compete in the market. There are very limited venues left for competitors to sell primary tickets if Ticketmaster has exclusivity at the majority of major venues in a region.
Bundling and restrictions
In addition to exclusivity clauses, Ticketmaster’s contracts with venues often include requirements that limit competition. For example, some contracts prohibit venues from selling tickets anywhere besides Ticketmaster. Others ban venues from using competing ticketing platforms.
Ticketmaster also frequently bundles its services together in contracts, requiring venues to use multiple Ticketmaster products together. For example, venues may have to use Ticketmaster’s ticketing platform, marketing services, fan analytics tools, and more as part of one package deal. This bundling makes it harder for competitors with only some of these services to effectively win business from venues.
Service fees and hidden costs
The convenience fees, services charges, and other added costs that Ticketmaster piles on top of ticket prices have long drawn consumer complaints. Ticketmaster’s fees range from 10% to over 25% of ticket face value. These tacked-on costs frequently more than double the advertised ticket prices.
Critics argue Ticketmaster gets away with excessively high fees because consumers have little choice but to pay them if they want to attend an event at a Ticketmaster-contracted venue. The lack of consumer power due to Ticketmaster’s dominance enables it to levy high fees that would likely be unsustainable in a more competitive market.
Acquisitions of competitors
Ticketmaster has acquired several of its former competitors over the years, most notably Live Nation in an infamous 2010 merger. Live Nation was the largest concert promoter in the world, owning or operating over 100 venues. The merger with Ticketmaster created a vertically integrated juggernaut controlling ticketing, promotions, artist management, and live events.
The Live Nation merger bolstered Ticketmaster’s dominance over primary ticketing and drowned out a major competitive threat. Critics charged that the merged entity was bad for consumers and competition. Live Nation and Ticketmaster eventually agreed to modify terms of the merger to settle an anti-competition investigation but were still allowed to combine.
Anti-competitive restrictions on venues and artists
In addition to exclusivity clauses in venue contracts, critics say Ticketmaster also uses anti-competitive tactics to restrict event organizers and artists. Some Ticketmaster contracts prohibit venues from working with performers that don’t use Ticketmaster for ticket sales. This strongarms artists into using Ticketmaster as well.
For major concert tours, Ticketmaster has also been accused of requiring promoters and venues to agree to use Ticketmaster ticketing services at a majority or all tour stops. These types of requirements make it difficult for touring acts to choose alternative ticketing options even if they want to.
Predatory pricing
Ticketmaster is also alleged to use predatory ticket pricing in some situations to undercut competitors’ prices until they are driven out of business. Because it is the dominant player in the industry, Ticketmaster can afford to slash prices and lose money in the short term by subsidizing ticket fees in specific markets. Smaller competitors don’t have the financial means to sustain such losses.
After using predatory pricing to weaken rivals, Ticketmaster can raise prices again once competitors exit the market and consumers have little choice but to pay higher fees. These tactics make it very hard for new ticketing companies to gain a foothold and take market share from Ticketmaster.
Lack of transparency
Consumer advocates criticize Ticketmaster for its lack of transparency around pricing, fees, and costs. Customers are often unable to easily find out what the total ticket price is including fees until late in the buying process. Breakdowns of fees are lacking.
Opaque pricing leads to customer confusion and enables Ticketmaster to sneakily leverage high service charges. The company has fought state regulations that aim to require more fee transparency and disclosures upfront to consumers during ticket purchases.
Political lobbying
Ticketmaster spends millions on lobbying and political influence campaigns each year advocating for its interests. Critics say this lobbying enables Ticketmaster to perpetuate monopolistic policies and block reforms that would help consumers and increase competition.
For example, Ticketmaster has lobbied against requirements to disclose fees earlier in purchase processes as well as caps on the amounts of fees that can be charged. The company’s political influence campaigns help it maintain favorable conditions for its business at the expense of consumers.
No viable alternatives for many events
Supporters of Ticketmaster point out that fans who don’t wish to use Ticketmaster have options like buying secondhand tickets from resellers. However, critics argue there are no viable alternatives for consumers who want primary event tickets as Ticketmaster is the only authorized seller for so many events.
For popular concerts, sporting events, and other hot ticket events, secondhand tickets often come at hugely inflated prices from ticket scalpers. Secondary market tickets can cost hundreds or thousands more than face value. Primary event tickets are the only real option for most fans. As Ticketmaster has cornered primary sales, consumers have no alternative for primary tickets.
Harming event organizers too
Ticketmaster’s practices don’t just harm consumers – they also negatively impact event organizers, venues, and artists. The lack of competitive pressure in the market means Ticketmaster has little incentive to improve its services for partners either.
Alternative ticketing services argue they could provide event partners better technology, fees, and fan experiences if they weren’t locked out by Ticketmaster’s exclusivity clauses and bundling requirements. Promoters, venues, and acts have limited negotiating leverage due to Ticketmaster’s entrenched position.
Is Ticketmaster skirting antitrust laws?
Ticketmaster has managed to avoid major antitrust actions by regulators thus far, though it has paid tens of millions to settle past investigations into anti-competitive practices. Critics argue Ticketmaster has carefully structured its business model and contracts to skirt the edges of antitrust laws restricting monopolistic behavior.
While Ticketmaster may not outright violate the letter of antitrust regulations, critics say it clearly goes against the spirit of fair competition and consumer choice that antitrust laws aim to uphold. Many argue tighter regulations of the ticketing industry are needed to curb Ticketmaster’s unfair advantages.
Calls to break up Ticketmaster’s monopoly
There have been repeated calls from activists, politicians, artists, and others to break up Ticketmaster to establish more fair competition in the ticketing industry. Legislators like Amy Klobuchar have pushed reforms to prohibit behavior like locking venues into long exclusive deals.
Proposed solutions for ending Ticketmaster’s monopoly-like dominance include:
- Banning Ticketmaster from signing exclusivity deals with venues
- Prohibiting Ticketmaster from requiring venues and artists to use it for all events
- Limiting how much Ticketmaster can bundle ticketing services together
- Requiring upfront disclosure of all fees during ticket purchases
- Capping service fees at reasonable percentages of ticket value
- Forcing Ticketmaster to divest all or part of its Live Nation division
- Subjecting major Ticketmaster mergers and acquisitions to higher scrutiny
Despite longstanding complaints about its market power, Ticketmaster has proven adept at evading major antitrust enforcement actions. Critics argue that to establish real competition in the ticketing business, regulators and legislators will have to take firm steps to curb monopolistic practices that Ticketmaster has relied on to dominate the industry.
Conclusion
Ticketmaster’s position as the primary ticketing giant for live entertainment events in the US gives it tremendous control over both consumers looking to attend events and organizers wanting to stage them. Through exclusivity deals, bundling, mergers, and other tactics, Ticketmaster has crippled competition across major parts of the live events industry.
Consumers are harmed through the lack of ticket purchasing options for must-see events coupled with the sky-high fees Ticketmaster is able to charge due to inadequate competitive pressures. Event partners also suffer from stagnant ticketing technology and innovation due to Ticketmaster’s entrenched position.
Though Ticketmaster defends its practices as simply shrewd business strategy, many charge that the company’s business model is fundamentally monopolistic and abusive of both consumers and partners. While Ticketmaster has avoided antitrust actions in the past, calls are growing for regulators and legislators to finally crack down on anti-competitive practices that critics describe as the hallmarks of an unfair monopoly.
