Ticketmaster, the largest ticket sales and distribution company in the United States, is facing scrutiny and investigations over its business practices. The company has long faced accusations of monopolistic behavior and exploiting its position, but recent controversies have renewed public anger towards Ticketmaster.
Background on Ticketmaster
Ticketmaster provides ticketing services for many of the major concert venues and sports leagues in the U.S. It dominates ticket sales for large-scale live entertainment events. According to company reports, Ticketmaster sells over 500 million tickets per year and partners with over 30,000 clients worldwide.
The company merged with Live Nation, a global entertainment company, in 2010. The merger was highly controversial as it combined the world’s largest ticketing company with one of the biggest concert and event promoters. As a result, Ticketmaster-Live Nation became a vertically integrated company involved in every facet of the live entertainment business – from artist management to venue operations to ticket sales.
Critics argued that the merger would lead to a monopoly in the industry. Live entertainment venues and musical acts would have little choice but to use Ticketmaster for sales and distribution. However, the U.S. Department of Justice approved the merger with certain conditions meant to encourage competition. Despite this, Ticketmaster still controls over 70% of the primary ticket sales market today.
Service fees and lack of transparency
One of the biggest criticisms leveled at Ticketmaster is their opaque fees which can add more than 30% to the base ticket price. These fees include:
- Service fee – this covers the cost of Ticketmaster’s operating expenses and profits
- Facility charge – this is passed to the venue owner to cover venue maintenance and operations
- Order processing fee
- Shipping or delivery fee for paper or e-tickets
Ticketmaster claims these fees are set by venues and sports teams while critics argue the company uses them to squeeze more money from fans. The fees often increase as an event draws near or tickets sell out. In some cases, fees can make cheap tickets significantly more expensive.
There is also a lack of transparency about where the fees go. Ticketmaster does not break down the specifics of its fees or provide details on how much money goes to the company versus the venue. They have been sued in the past for overcharging fees beyond what venues required.
Service charges
Recently, Ticketmaster has faced growing outrage over large “service charges” being tacked on late in the purchasing process:
- Customers shopping for tickets online would see one base price as they selected seats.
- But when they went to checkout, a 20-30% “service fee” would get added.
- These fees can add hundreds of dollars to an order.
Fans accuse Ticketmaster of engaging in “bait-and-switch” tactics by hiding the full costs until the end. The company claims the fees are made clear during the buying process but many feel misled.
Dynamic and speculative pricing
Ticketmaster has also adopted “dynamic pricing” where ticket prices fluctuate based on demand. Fans have complained about prices skyrocketing right before big concerts or games. While defenders argue it’s a variable pricing model similar to the airline and hotel industry, critics say it allows Ticketmaster to gouge fans when tickets are scarce.
Ticketmaster has also been accused of allowing speculative ticket brokers and scalpers to buy up tickets only to resell them for exponentially higher prices. Some brokers apparently use bots or ticket buying software to quickly snap up seats ahead of regular fans. Ticketmaster could implement stronger safeguards and purchasing limits but has not.
Scandals around presales
There has been controversy around Ticketmaster’s presales as well. Presales allow certain groups exclusive early access to buy tickets before the general public. This includes holds for fan club members, credit card holders, or concert promoters.
Some of the scandals around Ticketmaster presales include:
- Beyonce’s 2018 concert used presales to sell 88% of all tickets, leaving little for the general public.
- Taylor Swift’s ticket presale in 2017 overwhelmed Ticketmaster’s site and left many fans without tickets.
- Some artist fan clubs partner with Ticketmaster for presales and earn kickbacks based on how many tickets are sold.
Critics argue the presale system fuels scalping, drives up secondary market prices, and gives special treatment to select groups at the expense of ordinary fans.
Antitrust concerns and investigations
Given its dominant position in ticketing, Ticketmaster has long faced antitrust concerns and legal challenges. After their 2010 merger, Live Nation and Ticketmaster were subject to a 10 year consent decree imposed by the DOJ to promote fair competition. The decree prohibited Ticketmaster from retaliating against venues that partnered with other ticket companies.
That decree expired in 2020 and the DOJ opted not to renew it. Now Ticketmaster is facing fresh antitrust scrutiny both at state and federal levels:
- The DOJ has reportedly launched an anti-competitive practices investigation into Live Nation and Ticketmaster.
- At least 9 states have opened price-gouging investigations looking at Ticketmaster’s fees and other practices.
- Some Congressional representatives have called for breaking up Ticketmaster-Live Nation’s “vertically integrated monopoly.”
Potential remedies being discussed include capped fees, forcing Ticketmaster to divest some of its holdings, or undoing parts of the original 2010 merger. It remains to be seen if any charges or lawsuits will actually be filed.
Impact of the investigations
For now, the investigations into Ticketmaster have not led to concrete legal action. However, the probes have drawn greater public awareness to complaints about Ticketmaster’s business practices. The outcry could push enforcement agencies to take stronger action against potential anti-competitive behavior in ticketing.
Some specific impacts include:
- Increased scrutiny on Ticketmaster’s fees, pricing models, and lack of transparency.
- Renewed focus on ensuring fair competition and consumer choice in ticketing.
- More venues considering partnering with other ticket companies besides Ticketmaster.
- Bands and musical acts under pressure from fans to avoid Ticketmaster on tours.
It remains to be seen whether the investigations will directly curtail any of Ticketmaster’s specific practices. But the heightened scrutiny could pressure the company to rethink some of its most controversial strategies.
The probes also underscore that Ticketmaster does not operate unchecked despite being the dominant player in event ticketing. Violating antitrust principles or abusing its position could still draw legal consequences and consumer backlash.
Other controversies and criticism
Besides the recent investigations, Ticketmaster has been involved in various other controversies over its 30+ year history including:
- Getting sued by Pearl Jam in 1994 over service fees, leading to a Department of Justice probe into anti-competitive practices.
- Charging fans full price when concerts got cancelled or postponed due to COVID-19.
- Technical issues leading to crashes of their website during peak ticket sales.
- Customer data breaches exposing fans’ personal information.
- Paperless ticketing policies that prevent ticket transferability between fans.
Overall, Ticketmaster has earned a reputation for poor customer service, technical problems, and overcharging fees. They are one of the most loathed companies according to multiple consumer surveys and polls.
Conclusion
In summary, Ticketmaster is facing antitrust investigations and public scrutiny over a range of anti-competitive and unethical business practices. Their market dominance in ticketing allows them to charge opaque fees, utilize questionable pricing models, and exercise unparalleled control over how event tickets are sold and distributed. While no major legal action has been taken yet, the ongoing probes have drawn greater awareness to consumer concerns about potential monopolistic behavior and exploitation in the ticketing industry.