Ticketmaster has become synonymous with buying tickets to concerts, sports games, and other live events. If you want to get tickets to see your favorite artist or team, Ticketmaster is usually your only option. This lack of competition has led many to wonder – why is Ticketmaster the only company that sells tickets?
Ticketmaster’s Market Dominance
Ticketmaster first started selling tickets in 1976 and steadily grew over the next few decades by acquiring various regional ticketing companies. This include companies like Ticketron, Edlewise, Pacer, TicketWeb, Musictoday, and TicketsNow. Today, Ticketmaster sells tickets for over 200 clients and venues across North America. This includes the vast majority of major concert venues, sports teams, and theaters.
According to a U.S. Government Accountability Office report, Ticketmaster controlled over 80% of the primary ticketing services market in 2010. While the exact percentage may have shifted some since then, Ticketmaster remains the dominant player by a large margin.
Key Reasons for Market Dominance
There are several key reasons Ticketmaster has maintained such a stranglehold on event ticketing:
- Exclusive deals – Ticketmaster secures long-term exclusive contracts with many major venues and promoters to be their official ticketing provider.
- Scale – Their size allows them to achieve economies of scale and offer lower fees than competitors could match.
- Consumer habit – Many consumers are simply accustomed to using Ticketmaster by default.
- Lack of competition – Upstart competitors have struggled to take significant market share away from the entrenched Ticketmaster.
Why So Little Competition?
Given Ticketmaster’s reputation for high fees and poor customer service, one would expect more competition to emerge. So why are they still dominating the event ticketing landscape after over 40 years?
High Barriers to Entry
There are extremely high barriers blocking other companies from entering the primary ticket sales market at scale:
- Securing inventory – You can’t sell tickets if you don’t have inventory. Venues sign exclusive contracts with Ticketmaster.
- High fixed costs – Developing a ticketing platform requires major upfront investment in technology and security measures.
- Establishing trust – Venues want assurance that a ticketing provider can handle large volumes reliably.
- Overcoming habit – Consumers default to Ticketmaster out of habit, making it tough for newcomers.
These factors make it extremely difficult for any new players to get off the ground and build market share.
Ticketmaster’s Aggressive Tactics
Ticketmaster also reportedly uses aggressive tactics to maintain its dominance:
- Leveraging long-term or exclusivity deals with venues.
- Retaliating against venues that use other ticketing services.
- Undercutting competitors on service fees until they are driven out of business.
- Using technical tricks to direct traffic away from competitors’ sites.
While many of these tactics are unproven or borderline illegal, they certainly work to discourage competition.
| Ticketmaster Advantage | Impact on Competition |
|---|---|
| Exclusive contracts with venues | Blocks competitors from large inventory source |
| Scale and resources | Makes it hard for newcomers to keep up |
| Consumer habit and inertia | People default to Ticketmaster out of habit |
| Aggressive tactics | Discourages competitors from challenging them |
Ongoing Antitrust Concerns
Ticketmaster’s dominance and anti-competitive practices have made them a frequent target of antitrust inquiries from the U.S. Government:
- 1994 – The Pearl Jam band unsuccessfully tried to fight Ticketmaster’s exclusive deals with venues. Their complaint to the DOJ antitrust division was dismissed.
- 2009 – Ticketmaster and Live Nation’s proposed merger was initially contested by the DOJ over antitrust concerns. They eventually allowed the merger under certain conditions.
- 2016 – The DOJ launched a renewed investigation into possible anti-competitive practices by Live Nation/Ticketmaster. No major action has been taken yet.
While Ticketmaster has managed to fend off antitrust challenges so far, their controversial position continues to draw scrutiny. Some experts predict that the U.S. government may eventually take serious antitrust action, which would shake up the ticketing industry.
Impact of Potential Antitrust Action
If the DOJ forced Ticketmaster to change their business practices or broke up the company, it could significantly impact the ticketing landscape:
- More competitors could emerge if exclusive venue deals are prohibited.
- Fees and consumer prices might be driven down by increased competition.
- A broken up Ticketmaster would lose advantages from economies of scale.
- Consumers could benefit from more choices among ticketing providers.
However, others argue stricter antitrust enforcement may also have downsides:
- It could drive up costs for venues and event organizers.
- Reduced scale advantages could lead to higher fees industry-wide.
- Fragmentation may degrade the ticket buying experience for consumers.
The impact of potential antitrust actions remains very uncertain. While increased competition has some benefits, there are also risks if it goes too far.
The Rise of Secondary Ticketing
While Ticketmaster has remained dominant in primary ticket sales, the rise of secondary ticket marketplaces like StubHub and Vivid Seats has provided consumers with alternative options. These sites allow ticket holders to resell event tickets at market-driven prices.
Key facts about the secondary ticketing market:
- Estimated to be a $10+ billion per year industry globally.
- StubHub owned by eBay and Vivid Seats recently acquired by Ticketmaster.
- Gives consumers more options to buy and sell tickets.
- Prices dynamically adjust based on supply and demand.
Secondary marketplaces have increased competition and consumer choice for high-demand events. However, they are also controversial due to radically inflated ticket prices for hot events. StubHub, VividSeats, and other secondary platforms are expected to keep growing.
Secondary Market Share of Ticket Transactions
| Year | Secondary Market Share |
|---|---|
| 2015 | 20% |
| 2016 | 24% |
| 2017 | 29% |
| 2018 | 31% |
| 2019 | 35% |
The Rise of Ticket Bots
Another factor that has distorted the ticketing market is the rise of ticket bots – automated software tools used to buy up tickets en masse. These have become the bane of both primary and secondary ticket sales.
Key facts about ticket bots:
- Used by scalpers and brokers to snap up ticket inventory.
- Capable of buying thousands of tickets per minute.
- Cut average fans out and drive up secondary prices.
- Violate terms on most retail ticketing sites.
- Bot traffic estimated at 20-40% of ticket sales.
Ticketing sites try to implement countermeasures but have a hard time staying ahead of sophisticated bots. Legislation like the BOTS Act has aimed to crack down on their use, with limited success so far.
| Year | Estimated Bot Traffic |
|---|---|
| 2015 | 20% |
| 2018 | 30% |
| 2021 | 40% |
Impact of Bots
Ticket bots have had a number of negative effects:
- Box office tickets get bought up before the general public has a chance.
- Brokers and scalpers buy up inventory to resell at inflated prices.
- Double and triple booking makes it harder for venues to track inventory.
- Cripples fan clubs and promotional ticket programs.
Despite anti-bot laws, the problem seems likely to persist unless technology can help clamp down on their use.
The Consumer Experience
With all the market distortions, bots, and hidden fees, the consumer ticketing experience leaves much to be desired:
- Difficult to buy popular tickets at face value.
- Huge variance in prices for same ticket between sites.
- Tickets wind up getting resold multiple times.
- High fees and hidden charges drive up costs.
- Hard to know if buying from an unauthorized reseller.
While heavy legislation could potentially address some of these issues, a truly open and fair ticket marketplace remains elusive.
Average Ticketmaster Fees
| Fee Type | Average Cost |
|---|---|
| Convenience Charge | $12 per ticket |
| Facility Charge | $5 per ticket |
| Order Processing Fee | $8 per order |
Top Consumer Ticketing Pain Points
- High prices and fees
- Tickets selling out instantly
- Lack of ticket availability
- Extra charges added after ticket selected
- Reselling of tickets at inflated prices
The Future of Ticketing
Major changes will be needed for the consumer ticketing experience to substantially improve. Here are some possible directions things could evolve:
- More transparent pricing – All fees shown upfront.
- Banning of ticket bots – Better technology and enforcement.
- Lottery-based sales – More fair allocation of hot tickets.
- Price caps – Limits on how high resellers can price.
- Tighter regulation – Stricter anti-trust and consumer protection laws.
However, shifting from the current landscape won’t be easy given all the entrenched interests. The core ticketing industry has seen little innovation or disruption to date. Will something change to make buying tickets less of a headache for fans? Despite some buzz about blockchain-based ticketing in the future, the vast majority of sales will likely continue flowing through the legacy players.
Projected Market Share in 2025
| Ticketing Company | Projected Market Share |
|---|---|
| Ticketmaster | 75% |
| All Secondary Marketplaces | 20% |
| Other Primary Ticket Sellers | 5% |
Conclusion
In summary, Ticketmaster maintains a near-monopoly in primary event ticketing sales due to extensive exclusive deals, aggressive tactics, and the lack of serious competition. Secondary ticket marketplaces have grown, but sometimes facilitate scalping at the expense of fans. Bot traffic exacerbates supply constraints. Plus, hidden fees everywhere create a frustrating consumer experience. Ticketmaster’s position seems well-entrenched given the industry dynamics, but eventually, substantial improvements may be needed to modernize ticketing.
