Ticketmaster is the dominant primary ticket provider for major entertainment events in the United States. They sell tickets on behalf of concert promoters, music festivals, sporting leagues and teams, theaters, and more. This gives them incredible power over the live entertainment industry. Some key reasons why Ticketmaster has so much power include:
- They have exclusive contracts with many major venues and promoters.
- They own their own secondary resale marketplaces.
- They have merged with or acquired competitors.
- They have a massive consumer base.
- They have favorable deals with artists and teams.
Exclusive Contracts
A major source of Ticketmaster’s power is their exclusive contracts with venues and promoters. They are the exclusive primary ticket provider for many major concert venues, music festivals, sports teams, and theaters. This means if you want to attend an event at one of these venues, you have to purchase through Ticketmaster. There are no other options. According to a 2020 Government Accountability Office report, Ticketmaster has exclusive deals with more than 70 of the top 100 concert venues in the US. Having exclusivity at so many popular venues forces consumers to use Ticketmaster.
Some examples of major venues and organizations Ticketmaster has exclusive deals with include:
- Madison Square Garden
- Hollywood Bowl
- Fenway Park (Boston Red Sox)
- Staples Center
- Seattle Mariners
- New York Giants/New York Jets
In many cases, the contracts Ticketmaster has signed with venues grant them exclusive rights for 5-10 years. They structure long term deals to lock down key venues and block competitors. This entrenches their dominant position in the primary ticket sales market.
Owning Secondary Resale Marketplaces
In addition to controlling primary ticket sales, Ticketmaster also now owns major secondary ticket resale marketplaces. Secondary ticket sites are where people resell event tickets they have already purchased. Examples include StubHub and Vivid Seats.
In 2007, Ticketmaster merged with Live Nation, the world’s largest concert promoter and music festival organizer. As part of this deal, they acquired secondary ticketing site TicketsNow. In 2011, Ticketmaster purchased StubHub for $307 million. And in 2020, Ticketmaster acquired leading reseller Vivid Seats for $1.8 billion.
By owning the dominant secondary marketplaces, Ticketmaster controls ticket inventory across the entire supply chain. This further solidifies their stranglehold on live event ticketing. They can set pricing and policies across primary and secondary sales channels.
Mergers and Acquisitions of Competitors
Ticketmaster has consistently acquired or merged with competitors over the years. This includes some of the biggest deals ever seen in the ticketing industry. Key examples include:
Live Nation Merger
- 2007: $2.5 billion merger with Live Nation, the world’s largest concert promoter.
- This combined the two most powerful live music companies into one entity called Live Nation Entertainment.
- Live Nation owns 135 music venues and festivals. The merger gave Ticketmaster exclusive ticketing rights for all Live Nation events.
StubHub Acquisition
- 2011: Purchase of StubHub for $307 million.
- StubHub was the largest secondary ticket marketplace. This allowed Ticketmaster to break into reseller market.
Vivid Seats Acquisition
- 2020: Purchase of Vivid Seats for $1.8 billion.
- Vivid Seats was a major secondary ticket site competing with StubHub.
- This acquisition eliminated a key rival.
By systematically acquiring and merging with competitors over the past 15+ years, Ticketmaster has limited consumer choice and solidified their strong market position.
Massive Consumer Base
Ticketmaster also possesses unmatched scale and consumer reach. They sell 500 million tickets per year through their websites and platforms.
According to Ticketmaster’s own data, they have:
- Over 200 million unique visitors per year to their sites
- 15 million fan club members
- 1.5 billion visits to their sites annually
This enormous consumer base gives Ticketmaster tremendous power. It creates a cycle where consumers have to use Ticketmaster because they are the only ticketing option at so many venues and events. Ticketmaster then gets consumer data and marketing opportunities they can use to attract even more customers. The massive user base also appeals to venues, sports teams, and musicians when negotiating new exclusive contracts.
Favorable Deals with Teams & Artists
Ticketmaster offers very favorable deals to sports teams, musicians, and promoters to get their exclusive ticketing business. A key example is their deal with the NFL. Under the deal, Ticketmaster reportedly pays the NFL $1.2 billion per year for exclusive rights to sell tickets to NFL games. This is a massive amount that other ticketing companies likely cannot match.
For concert tours, Ticketmaster provides artists with huge upfront payments through their Artist Services division. This locks down the exclusive right to sell tour tickets on the artists’ behalf. Ticketmaster is willing to pay so much because they know they will recoup these costs through added ticket fees and secondary marketplace sales.
The extremely generous deals Ticketmaster offers make it very appealing for teams, venues, and artists to work with them instead of competitors. This helps Ticketmaster maintain their strong market position.
Other Factors
Some other factors that contribute to Ticketmaster’s power include:
Brand recognition: When people think of buying event tickets, Ticketmaster is typically the first site that comes to mind. They benefit from being a household name people instinctively trust.
Industry connections: Ticketmaster has cultivated close relationships with influential people across the music, sports, and live entertainment industries. These connections help steer business their way.
Technology and data: Ticketmaster has invested heavily in technology and data analytics to optimize operations and extract maximum value from ticket sales. This creates a competitive edge.
High switching costs: Venues, teams, and concert tours have invested heavily in Ticketmaster’s systems and technology over the years. Transitioning to a new provider causes major disruptions and costs. This helps retain existing clients.
Lobbying power: Ticketmaster spends millions on lobbying efforts and PAC contributions to shape laws and regulations to their advantage. Their financial resources and connections help maintain the status quo.
Negative Impacts of Ticketmaster’s Power
While Ticketmaster’s business practices and mergers have helped them gain market dominance, many say this power has negative impacts, including:
- Higher fees – Ticketmaster’s control allows them to tack on high fees that can equal 25% or more of a ticket’s face value.
- Limits consumer choice – Reduced competition means less innovation and worse service for ticket buyers.
- Hurts lower-level artists – Emerging acts must pay Ticketmaster’s high fees, reducing potential tour income.
- Anti-competitive behavior – Critics say Ticketmaster blocks rivals and abuses their position in illegal ways.
There have been numerous lawsuits and legal actions taken against Ticketmaster over the years for alleged anti-competitive and monopolistic behavior. Despite this, they remain the dominant player in event ticketing due to all the factors outlined above.
Attempts to Challenge Ticketmaster’s Power
There have been some attempts by rivals and lawmakers to reduce Ticketmaster’s power in the live event ticketing industry. Key examples include:
Bands ditching Ticketmaster – Some big acts like Pearl Jam and Bruce Springsteen have tried to tour using alternatives like Ticketron or their own in-house ticketing. But these efforts struggled to gain traction due to Ticketmaster’s exclusive deals.
Upstart competitors – New ticketing platforms like AXS and SeatGeek have tried entering the market. But Ticketmaster uses aggressive tactics to undermine upstarts and maintain their control.
Class action lawsuits – Numerous class action suits have accused Ticketmaster of abusing their market position. But lawsuits face an uphill legal battle and Ticketmaster has successfully fended off most cases.
US and EU investigations – Government antitrust regulators have launched investigations into Ticketmaster on several occasions. But no major legal action has yet been taken to break up their power.
New legislation – Some politicians have tried passing laws to promote ticketing competition and prohibit unfair exclusivity deals. But intense lobbying by Ticketmaster has stalled and watered down reform efforts.
Despite challenges, Ticketmaster remains firmly entrenched as the dominant player in live event ticketing. Their combination of exclusive deals, acquisitions, scale, and financial strength makes them very difficult to dislodge. It will likely require aggressive antitrust enforcement or legislative action to significantly erode their market power. Until that happens, consumers will have limited leverage against Ticketmaster.
Ticketmaster’s Perspective
Ticketmaster defends their business practices and market dominance in several ways:
- They argue the ticket market is actually very competitive and their market share is overstated. They point to primary competitors like AXS and SeatGeek as evidence.
- They say their exclusive deals are fair commercial agreements that venues and promoters willingly enter into for good value.
- They claim consumers benefit from their technology investments and economies of scale.
- They note how they shoulder huge financial risks by guaranteeing payments to venues and artists upfront.
- They say their service fees are reasonable payments for the value they provide managing ticketing logistics and marketing events.
Additionally, Ticketmaster says their mergers and acquisitions have helped them innovate and provide better experiences for fans. They argue their business practices adhere to the law.
While critics accuse Ticketmaster of abusing their power, they maintain they are a fair and responsible player in the ticketing industry. But many consumer advocates remain skeptical and want to see reforms to encourage more competition in the market.
Conclusion
In summary, Ticketmaster has attained dominant power in event ticketing through exclusive venue contracts, major mergers and acquisitions, unmatched scale, and artist/team deals. This power enables them to impose high fees and limits consumer choice. Attempts by rivals and regulators to challenge their dominance have so far been unsuccessful. Most experts agree aggressive enforcement of antitrust laws is likely required to dislodge Ticketmaster from their powerful position in the industry. Until major reforms occur, Ticketmaster will remain the gatekeeper for live entertainment events and continue generating massive revenues from ticket sales.