Ticketmaster is one of the most well-known, and perhaps one of the most controversial, ticket sales and distribution companies in the world. Despite ongoing criticism for things like exorbitant service fees, exclusive ticketing deals, and accusations of anticompetitive practices, Ticketmaster remains one of the most dominant players in the live entertainment ticketing industry after more than 50 years in business.
What is Ticketmaster?
Ticketmaster is a ticket sales and distribution company based in Beverly Hills, California. It sells tickets for live entertainment events on behalf of its venue, sports team, theater, university, and other clients. This includes concerts, sports games, theater shows, festivals and more. Ticketmaster has contracted exclusive deals with many of these clients to be their sole ticket provider and distributor.
In addition to ticket sales, Ticketmaster also provides integrated ticketing services and analytics to its clients. It offers features like digital ticketing, marketing services, fan relationship management, ticket inventory control and analytics to help its clients boost ticket sales and enhance experiences.
Ticketmaster sells tickets through its website, Ticketmaster.com, along with affiliate and partner websites. Tickets can also be purchased over the phone or in person at box office outlets in some locations.
Ticketmaster’s history and acquisitions
Ticketmaster was founded in 1976 in Arizona by two computer programmers, Albert Leffler and Gordon Gunn. It initially sold tickets for local events in Phoenix before expanding into a national ticketing service through partnerships with promoters like Bill Graham in San Francisco.
In 1982, Ticketmaster was bought by Jay Pritzker, whose family also owned the Hyatt hotel chain. Under Pritzker’s ownership throughout the 1980s and 90s, Ticketmaster grew rapidly by acquiring smaller ticketing companies and signing exclusive deals with major venues and promoters around the U.S.
Some of Ticketmaster’s major acquisitions have included:
- 1982 – Acquired Ticketron, one of its early major competitors
- 1991 – Acquired TicketCenter from ProServ, which expanded its sports ticketing business
- 1993 – Acquired TicketWeb, one of the first online ticketing marketplaces
- 1995 – Acquired CitySearch, an early local events guide and listings platform
- 1996 – Acquired Ticket integral in Netherlands to expand into Europe
- 2000 – Acquired Tickets.com in a deal worth $280 million
- 2008 – Acquired Paciolan, a leader in ticketing for college sports, expanding into that market
- 2009 – Acquired Front Line Management Group, a artist management company that gave it stronger relationships and exclusivity with major artists
- 2010 – Merged with Live Nation in $2.5 billion all-stock deal, becoming Live Nation Entertainment
The major merger with Live Nation in 2010 created the vertically-integrated Live Nation Entertainment company that exists today. More details on the Live Nation merger are explored later in this article.
Ticketmaster’s service fees and charges
One of the most common complaints about Ticketmaster is their service fees – the extra charges added when purchasing a ticket. Ticketmaster service fees have frequently ranged anywhere from 10% to over 30% the base price of the ticket. Some specific examples:
- A $40 concert ticket has a $15 service fee added, making the total $55
- A $120 NFL football ticket has a $25 service fee added, totaling $145
- A $250 music festival pass has a $75 service fee, totaling $325
These fees go to Ticketmaster itself to cover the costs of operating its ticketing system and services. However, many consumers feel these fees are exorbitant and unjustified, representing a “hidden cost” on top of the ticket price itself.
In addition, Ticketmaster often adds other special charges like:
- “Order processing fees” – Often $5-$10 per ticket
- “Facility charges” or “venue fees” – Charged per ticket to fund the venue
- “Convenience” or “e-delivery” fees – For electronic tickets
- Shipping and will call fees
All these extra fees can significantly drive up the total cost to purchase a ticket. It’s not uncommon for a ticket’s cost to be 30%-50% higher than the base price once all Ticketmaster’s fees are added.
Ticketmaster’s market dominance
How has Ticketmaster maintained such a controlling share of the primary event ticketing market despite its unpopular fees? There are a few key factors:
- Exclusive venue deals – Ticketmaster has long-term exclusive contracts to be the official ticket provider for many major venues and promoters like Live Nation. This blocks competitors from selling primary tickets.
- Mergers and acquisitions – Ticketmaster has merged with or acquired competing ticketing companies over the years, like Ticketron, Tickets.com and more. This reduced competition in the ticketing market.
- Artist relationships – By working with promoters like Live Nation and artist management firm Front Line, Ticketmaster builds close exclusive relationships with artists.
- Technology and data – Ticketmaster has continuously invested in industry-leading ticketing technology and data analytics capabilities that smaller competitors struggle to match.
- Brand name recognition – Consumers recognize Ticketmaster as the dominant ticketing provider, go there by default and funnel more business its way.
Essentially, Ticketmaster’s vast exclusive deals, mergers activity, long history in the industry, technology innovation and brand power have combined to make them a near-monopoly in primary event ticketing.
Criticisms of Ticketmaster’s dominance
Ticketmaster’s dominance and market control has led to ongoing backlash and criticism from consumers, watchdogs, and industry players. Some of the main criticisms include:
- Excessive fees – As explored earlier, Ticketmaster’s “hidden” service fees often add 25%-50% to a ticket’s face value cost, angering many consumers.
- Lack of competition – Ticketmaster’s exclusivity deals lock out competitors and give consumers little choice when buying tickets. This leads to the high fees.
- Antitrust concerns – Its mergers and exclusivity deals raise antitrust concerns and stifle free market competition, according to critics. Classic example of a company abusing market position.
- Predatory pricing – Some accuse Ticketmaster of charging venues fees that are passed down to consumers through higher ticket face prices, even if no booking fee is charged to the consumer.
- Captive clientele – Bands and venues have no choice but to use Ticketmaster for their ticketing needs in many cases, with no ability to shop around or negotiate better deals.
While Ticketmaster maintains that their fees are justified to cover operating costs and services provided, many feel their lack of competition allows them to charge excessive fees way beyond their true costs. The lack of consumer choice and negotiating power is seen as damaging.
Lawsuits and legal issues
Ticketmaster has faced a number of lawsuits over its business practices over the years, including:
- In 1994, Ticketmaster paid $4.5 million to settle a class action lawsuit claiming it monopolized the ticketing market and charged excessive fees.
- From 1991 to 1995, Ticketmaster was involved in a legal battle with rock band Pearl Jam over its exclusive ticketing deals. Pearl Jam unsuccessfully tried to book venues outside Ticketmaster’s control.
- In 2009, Ticketmaster and Live Nation agreed to let tickets be sold through Anschutz’s AEG Live for five years after their merger in order to settle an antitrust investigation by the Department of Justice.
- In 2018, Ticketmaster paid $110 million to settle a class action lawsuit claiming they conspired with promoters to inflate order processing fees on event tickets.
Despite these legal issues over the years, none have significantly impacted Ticketmaster’s market position or business practices in the long run. Their exclusive venue deals and other competitive advantages have largely kept them immune from legal challenges under current antitrust law.
The Live Nation-Ticketmaster merger
One of the most pivotal events in Ticketmaster’s history was its 2010 merger with Live Nation. Live Nation was formed in 2005 after spinning off from Clear Channel Communications. It operates ticketing platforms, promotes large concerts, and owns major entertainment venues.
The merger between the two companies created the Live Nation Entertainment company that exists today. Some key details about the merger include:
- The merger was an all-stock deal valued at $2.5 billion. Each Live Nation share was exchanged for 1.384 shares of Ticketmaster stock.
- The deal combined the world’s largest concert promoter (Live Nation) with the world’s top event ticketing company (Ticketmaster). It created a vertically integrated live entertainment company.
- Live Nation CEO Michael Rapino led the combined company, while Ticketmaster CEO Irving Azoff also played a leadership role.
- The merger raised immediate anti-competitive concerns and was investigated by the U.S. Department of Justice. A settlement was reached to allow AEG Live to sell tickets to Live Nation events for five years.
- The combined company adopted the Live Nation Entertainment name, though Ticketmaster continues to exist as a subsidiary brand.
The merger amplified concerns about Ticketmaster’s dominance given it combined forces with the world’s top concert promoter. But it ultimately went through after Live Nation and Ticketmaster made concessions to get Justice Department approval.
Ticketmaster under Live Nation Entertainment
In the decade-plus since the merger, Ticketmaster has remained a foundational part of Live Nation Entertainment’s business. Some observations about Ticketmaster’s role today include:
- Ticketmaster continues to serve as Live Nation’s primary ticketing platform, including for all of its owned/operated venues and promoted shows.
- Ticketmaster has benefitted from Live Nation’s vast array of ticketing rights deals with venues, theaters, professional sports leagues/teams and colleges.
- Being part of Live Nation gives Ticketmaster exclusive ticketing access to the world’s biggest artists and tours like U2, Madonna, Jay-Z, etc. when they partner with Live Nation.
- Ticket prices and fees on Ticketmaster have remained high post-merger, with Live Nation showing little interest in disrupting Ticketmaster’s lucrative fees.
- Live Nation CEO Michael Rapino has said Ticketmaster’s technology and platform capabilities have improved significantly since the merger.
Overall, the merger with Live Nation has only served to strengthen Ticketmaster’s market position, while providing it access to even more exclusive ticketing deals for top artists, venues and events.
Alternatives for purchasing tickets
While Ticketmaster enjoys immense market power, there are some alternatives consumers can use to purchase tickets without paying its fees:
Buy directly from the venue box office
For many events, the venue’s physical box office will sell tickets directly without any Ticketmaster fees. Buying direct from the box office avoids all the processing, service and order fees. However, the convenience of purchasing online or by phone through Ticketmaster may outweigh the savings for some consumers.
Use ticket resale sites
Many tickets end up on secondary resale sites and marketplaces like StubHub, Vivid Seats, SeatGeek and more. Resale sites charge their own fees, but they are often still lower than Ticketmaster’s fees on initial sales. The main downside is selection is limited to whatever tickets are being resold.
Buy from artist or team presales
Big artists and teams often do presales for their fan clubs before the general on-sale. These presales sometimes use the artist’s own ticketing platform or independent providers like AXS, avoiding Ticketmaster. The catch is you have to be a fan club member to access these presales.
Use Ticketmaster’s ticket exchange
Ironically, Ticketmaster itself provides a way to bypass fees. Ticketmaster’s ticket exchange allows fans to resell tickets to each other, with lower service fees. Selection is limited here like other resale sites though.
Find a nonprofit event
Some nonprofit events don’t use Ticketmaster and instead use smaller providers. For example, a fundraising concert at a local theater or a 5K run raising money for charity. The tradeoff is selection of events is much more limited.
Ultimately there are limited ways for consumers to avoid Ticketmaster entirely, unless they are ok seeing fewer mainstream commercial events. But the above alternatives can help save on fees in certain cases.
Why does Ticketmaster still dominate?
Given the ongoing criticism and backlash, how has Ticketmaster maintained its stronghold on event ticketing for so long? There are a few key reasons:
- Strong competitive advantages – As described earlier, Ticketmaster’s established client base, exclusive deals, data/technology, brand power, and relationship with Live Nation make it hard for any competitor to replicate their scale and ubiquity.
- Consumer inertia – Most consumers just default to Ticketmaster without researching alternatives because they are so dominant. They are reluctant to use lesser known providers.
- Artist and venue preference – Artists and venues often prefer Ticketmaster because they provide the most reach and distribution power for tickets and have the best technology and data analytics capabilities.
- High barriers to entry – Breaking Ticketmaster’s hold would require massive upfront investment in technology, infrastructure, and client bases that no competitor has been willing and able to make to date.
- No viable regulatory solution – Breaking up Ticketmaster would be difficult under current antitrust laws. And venues/artists won’t willingly give up Ticketmaster en masse unless forced to.
Essentially, Ticketmaster sits in an extremely advantageous position in the ticketing ecosystem thanks to its history, infrastructure, and business relationships. Competitors, clients, regulators have all struggled to change the landscape meaningfully to date.
The future of Ticketmaster
Given Ticketmaster’s continued dominance, what does the future look like? Here are some possibilities:
- They continue to thrive unchanged for years given their competitive strengths and inertia of current ticketing ecosystem.
- Fee and antitrust pressure slowly builds until regulators finally step in to break up or constrain Ticketmaster.
- A disruptive competitor emerges with new technology or business model that overcomes barriers to entry and loosens Ticketmaster’s hold (perhaps blockchain/crypto based).
- Backlash rises among major artists and venues, who collectively demand more choices and force Ticketmaster to moderate practices or lose business.
- Younger generations shift more entertainment time and dollars away from live events, reducing importance of ticketing services.
Realistically, Ticketmaster looks unlikely to be dislodged from its dominant position anytime soon. But a combination of technology shifts, competitive disruption, consumer outrage, regulatory changes, and shifting entertainment preferences could potentially weaken its grip on ticketing over the long-term.
Conclusion
In summary, Ticketmaster has managed to withstand ongoing criticism and retain tremendous market power in event ticketing due to its pioneering history in the industry, sustained competitive advantages, inertia among consumers and clients, and the high barriers faced by competitors. While its fees and dominance remain detrimental in many ways, no existing company, clients, regulators or consumers have been able to loosen its grasp on the live event ticketing landscape. Until a major competitive, technological or regulatory disruption occurs, Ticketmaster remains entrenched as the giant of event ticketing now and for the foreseeable future.
