The United States government has recently opened an investigation into Ticketmaster over allegations of anticompetitive practices. Ticketmaster is the largest ticket sales and distribution company in the US, controlling a large majority of major event ticket sales. However, there have been growing concerns from regulators, lawmakers, and consumers over Ticketmaster’s dominance in the market and how this could be negatively impacting competition and consumers.
Some of the key issues that have prompted the government investigation include:
High fees and lack of transparency
Ticketmaster has been criticized for adding on high fees to ticket prices that can end up doubling or tripling the base price. These fees include vague charges like “service fees” and “processing fees” that critics argue exist mainly to pad Ticketmaster’s profits. There is a lack of transparency around how these fees are calculated.
Abuse of market power
With its large share of the primary ticket market, Ticketmaster faces allegations of abusing its position to charge exorbitant fees and making it difficult for competitors to challenge its dominance. Its exclusive ticketing deals with major venues also shut out competitors.
Acquisitions of competitors
Ticketmaster has acquired several of its key competitors over the years, like Ticketron and Paciolan. This has led to further consolidation of power in the ticketing industry and fewer choices for consumers and event organizers. The government is concerned these acquisitions have been anticompetitive in nature.
Collusion with Live Nation
Live Nation is the world’s largest concert and event promoter. When it merged with Ticketmaster in 2010, it created a vertically integrated company that had a near monopoly on the live event business. Critics charge this merger allowed Ticketmaster-Live Nation to leverage its power and influence across the industry in anticompetitive ways.
History of Ticketmaster Dominance
Ticketmaster has managed to control such a large share of the ticket sales market due to aggressive business tactics and acquisitions pursued from its early days in the industry.
1976 – Ticketmaster is founded
Ticketmaster was founded in 1976 as a ticket inventory control software company. In 1982, it sold 50% of their business to the promoter Bill Graham, which gave them access to his large roster of venues and shows. This allowed Ticketmaster to sign exclusive deals with major venues and promoters.
1982 – Acquires Ticketron
In 1982, Ticketmaster bought one of its early competitors, the pioneering ticketing company Ticketron. This removed a key rival and significantly expanded Ticketmaster’s inventory of venues and events.
1991 – Makes deals with Pearl Jam venues
Pearl Jam tried to tour in the early 1990s without using Ticketmaster but found them blocking venues from working with them. Their lawyer testified to Congress that Ticketmaster threatened venues with being cut off from getting all concert ticket sales if they sold Pearl Jam tickets.
2008 – Merger with Live Nation
Despite some opposition, Ticketmaster merged with promoter Live Nation in 2008. This created the Live Nation-Ticketmaster conglomerate that controlled ticketing, promotion, artist management and more.
2010-Present – Further acquisitions and consolidation
Ticketmaster continued to acquire ticketing companies post-merger, buying Front Line Management Group (2013), Universe (2014), Ticketbis (2016) and more. This has entrenched their position even further.
Ticketmaster’s Impact on Consumers and the Industry
With its outsized influence and reach, Ticketmaster has had significant impacts on consumers of live events, competing companies, venues and artists.
Higher ticket prices
Economists estimate Ticketmaster’s fees result in concert tickets that are 17% higher on average compared to a more competitive market. Their dominance removes downward pressure on fees and enables them to raise prices.
Reduced innovation
Lack of competition in ticketing has led to less innovation in the space. Ticketmaster has little incentive to improve its outdated consumer-unfriendly website and apps. Rival startups that could drive innovation often struggle to secure inventory.
Venues locked into long-term deals
Venues sign long-term exclusive contracts with Ticketmaster, sometimes as long as 10 years. This blocks them from working with other ticketing companies and from having leverage to negotiate better deals.
Artists receive a smaller share of revenue
High Ticketing fees often cut into the share of ticket revenue that artists receive. Young emerging artists are particularly impacted. Blocked from affordable distribution, they also have a harder time finding an audience.
| Year | Key Ticketmaster Milestone |
|---|---|
| 1976 | Founded as a ticket inventory control software company |
| 1982 | Acquired competitor Ticketron |
| 1991 | Forced Pearl Jam venues into exclusive deals |
| 2008 | Merged with Live Nation |
| 2010-Present | Continued to acquire competitors |
Investigations and Lawsuits Over Anticompetitive Practices
The government scrutiny that Ticketmaster is currently facing builds on a long history of investigations into its monopolistic business practices.
1994: Pearl Jam lawsuit
Grunge band Pearl Jam took Ticketmaster to court claiming they were engaging in anticompetitive behavior, but the lawsuit was dismissed.
2009: Ticketmaster-Live Nation merger inquiries
The proposed Ticketmaster-Live Nation merger prompted concern from regulators and lawsuits seeking to block the merger over competition concerns. Ultimately the merger was allowed with some conditions.
2016: Songkick lawsuit
Ticket booking app Songkick filed an antitrust lawsuit after Ticketmaster used its leverage over venues to block Songkick from ticketing shows. Parts of the suit were dismissed.
2019: Different Songkick lawsuit
After acquiring competitor Ticketfly, Ticketmaster allegedly cut off Ticketfly’s inventory in an anticompetitive move. Ticketfly’s owner filed a lawsuit, which is still ongoing.
2022: DOJ inquiry opened
In July 2022, the US Department of Justice opened an investigation into “possible anticompetitive conduct” by Ticketmaster/Live Nation.
| Year | Investigation |
|---|---|
| 1994 | Pearl Jam lawsuit dismissed |
| 2009 | Government reviews Ticketmaster-Live Nation merger |
| 2016 | Parts of Songkick lawsuit dismissed |
| 2019 | Ticketfly lawsuit filed, ongoing |
| 2022 | DOJ opens inquiry into anticompetitive practices |
Reform Efforts to Increase Competition
Alongside the government investigations, there have been calls from lawmakers, consumer groups and industry stakeholders to reform Ticketmaster and increase competition. Some reform proposals include:
Breaking up Ticketmaster and Live Nation
Undoing the 2010 merger could be an impactful move to restore competition between the two highly concentrated markets of ticket sales and event promotion.
Limiting Ticketmaster’s vertical integration
Ticketmaster could be banned from entering into new lines of business like artist management and ownership of venues, reducing conflicts of interest.
Capping ticket fees
Federal or state governments could look to regulate ticket fees, for example capping them at 10-15% of face value. More transparency around fees is also needed.
Barring long exclusive venue contracts
Exclusive deals longer than 1 or 2 years could be banned, allowing venues flexibility to work with different ticket sellers over time.
Incentivizing ticketing startups
Tax breaks or other incentives could help level the playing field and make it easier for new ticketing platforms to compete. Access to product inventory has been a key barrier.
While Ticketmaster maintains its practices are legal and pro-consumer, the momentum appears to be growing for impactful reforms that will shake up the ticketing industry. A more balanced competitive landscape would likely lower costs, improve choices, and benefit consumers and live event attendees.
Conclusion
Ticketmaster’s decades-long grip on the primary ticket sales market has allowed it to amass significant power and control in the live events industry. With little real competition, Ticketmaster has been able to get away with charging high fees, engaging in exclusionary tactics, and acquiring rivals. This has resulted in increased costs and limited options for consumers and venues.
However, there are now strong calls to rectify this unbalanced market through government antitrust action and new pro-competition laws and policies. Ticketmaster claims it provides services that benefit the industry, but the investigations and lawsuits piling up indicate expert regulators disagree. If meaningful reforms are undertaken, there is potential for renewed innovation and fairer prices in the ticketing market. Consumers eagerly await relief from what many see as Ticketmaster’s longstanding monopolistic practices.