Ticketmaster, the largest ticket sales and distribution company in the United States, has come under intense scrutiny and criticism in recent years for their business practices. Many music fans and consumer rights advocates argue that Ticketmaster abuses their dominant market position to charge exorbitant fees, limiting options for consumers and hurting smaller competitors. Despite some changes made in response to the backlash, Ticketmaster remains controversial and a frequent target of consumer complaints.
What does Ticketmaster do?
Ticketmaster provides ticket sales and distribution services for many of the largest venues and events in the US. They sell tickets online, over the phone, and at box office outlets for concerts, sports games, theater shows, and more. They have contracts with many major venues, sports leagues, and event promoters giving them exclusive rights to sales and distribution. For example, Ticketmaster has long-term deals with the NFL, NBA, NHL and many major concert venue chains like LiveNation.
In addition to ticket sales, Ticketmaster also provides technology solutions to venues such as online ticket purchasing platforms and access control systems at event entrances. Their dominance in so many aspects of live event ticketing is part of what has made them so controversial.
Criticisms and Controversies Around Fees
The primary complaint against Ticketmaster is that they charge fees to customers that many feel are unjustifiably high and opaque. Their fees include:
- Convenience fees – charges for the convenience of buying tickets online or by phone
- Order processing fees – fees for each ticket purchased in a single order
- Facility charges – fees ostensibly passed on to the customer on behalf of the venue hosting the event
- Service fees – vague fees for Ticketmaster’s services
These fees can add up to 20-30% of the base ticket price. Many consumers feel these fees are excessive given that Ticketmaster faces little competition in the market. They accuse Ticketmaster of exploiting their dominant position to charge above market rates.
There is also a lack of transparency around what the fees are covering. In some cases “facility fees” are identical no matter the venue or event, suggesting they are just an additional revenue stream for Ticketmaster unrelated to any specific cost. The company faced a class action lawsuit in the early 2000’s around their fees which resulted in some changes to their practices, but issues around lack of transparency and reasonableness of the fees persist.
Service Fees and Face Value Pricing
One of the more controversial aspects of Ticketmaster’s fees is their service fee. This vague fee is added to all ticket purchases and can make up a significant portion of the total ticket cost. While they claim it covers their technology, staffing, marketing and other costs, critics argue it is essentially indistinguishable from a commission and incentivizes them to raise costs not lower them.
Ticketmaster also engages in what is known as face value pricing. This means the initial ticket price listed on their website or box office excludes the service fee which is only added later in the purchasing process. So a ticket listed at $50 may end up costing $65 after the fees. This creates a lack of transparency around full pricing that frustrates many customers.
Anti-Competitive Concerns and Market Dominance
Ticketmaster’s position as the primary ticket seller for many major concerts and events gives them tremendous market power. Some critics argue they use this power unfairly to block competitors and maintain monopolistic control.
Here are some anti-competitive concerns that have been raised about some of Ticketmaster’s business practices:
- Exclusive long-term deals with major venues and promoters that box out competitors.
- Requirements for venues to use Ticketmaster as their sole ticket provider if they want to host major touring acts.
- Using online ticket sale platforms that make it difficult for season ticket holders to resell tickets through third parties.
- Platforms like Ticket Exchange that discourage ticket resales and inflate prices.
Their significant share of primary ticket sales and their ownership of major resale marketplaces like Ticketmaster Resale allows them to control large portions of the market. Critics argue their dominance stifles competition and innovation that could benefit consumers.
Market Share and Mergers
Ticketmaster currently has an estimated 70% market share of primary ticket sales and 80% for concerts. They sold over 500 million tickets in 2021 worth a total of $30 billion. Their closest competitor, AXS, has an estimated 10% market share.
Ticketmaster merged with LiveNation, a events promotion giant, in 2010. LiveNation owns, operates or has exclusive rights with hundreds of major venues and festivals which helped further consolidate Ticketmaster’s industry control. Prior to the merger Ticketmaster already controlled over 80% of the primary ticket market. The lack of successful antitrust challenges to the merger shows the difficulty regulators face in limiting their market power.
Botting and Unfair Usage
Another issue that generates complaints against Ticketmaster is botting and unfair usage of their systems. Botting involves using automated computer systems called bots to purchase large quantities of tickets the moment they go on sale.
Ticket limits per customer are meant to prevent botting and give individual fans a fair shot at buying tickets. However, Ticketmaster has been accused of poor enforcement of these policies. Known bot operators are able to repeatedly circumvent detection and purchase thousands of tickets in minutes crowding out genuine fans. A lack of investment in improved fraud detection is seen by some as Ticketmaster prioritizing their own sales over fair access.
They have also been accused of looking the other way when it comes to large-scale speculative ticket purchases by ticket brokers. Ticketmaster has incentives to maximize sales volume which may make them less likely to police abusers. While they have defended their efforts to stop bots and enforce purchase limits, many feel more could still be done to level the playing field.
Public Relations Issues
In addition to complaints about their fees and market dominance, Ticketmaster has also faced PR crises around site crashes, data breaches and poor customer service.
Their sales systems have infamously crashed or malfunctioned during particularly high demand events like playoff games or tour launches. Angry customers are left unable to purchase tickets they waited hours in online queues for. This generates enormous frustration and backlash against the company for their unstable technology.
They have also faced data breaches exposing customers personal information. A 2018 breach compromised the data of 40,000 customers in Europe through their online chat bots. Poor handling of the breach response and notifications heightened anger against the company.
Customers frequently complain about difficulty reaching customer service representatives. Wait times regularly exceed one hour for support by phone. They have low customer satisfaction ratings and a high volume of complaints for their level of service.
Each of these PR problems amplify existing criticisms of their business practices. Irate customers have few alternatives given Ticketmaster’s powerful position in the industry.
Calls for Changes
Consumer advocates, fans and artists have called for major changes to address the issues around Ticketmaster including:
- Capping their service fees at a reasonable percentage of base ticket prices.
- Requiring more transparency and details around what their various fees are covering.
- Policies to ensure better enforcement of ticket purchase limits.
- Limiting their ability to restrict ticket resales on competing marketplaces.
- Restricting anti-competitive exclusivity deals with major venues and promoters.
- Splitting their primary and secondary ticket operations into separate companies.
While Ticketmaster has made adjustments to some policies, their underlying business model and dominance remains largely intact. Their position continues to make substantial reforms challenging absent intervention by regulators, lawmakers or legal action.
Recent Controversies Over Dynamic Pricing
Ticketmaster has rolled out a new dynamic pricing system that has proven extremely controversial and spurred the latest wave of criticism against them.
Dynamic pricing uses artificial intelligence and algorithmic pricing that adjusts ticket costs continually based on predicted demand trends. Tickets to very high demand shows and games can now soar to 5-10X their original prices. Supporters argue it properly matches supply and demand while critics say it price gouges loyal fans.
Fans of artists like Bruce Springsteen and Taylor Swift have recently been outraged at rocketing ticket costs they blame on Ticketmaster’s new dynamic system. Some tickets with a pre-dynamic cost of $200 are now being listed for $1000 or more. Fans accuse Ticketmaster of using its market dominance to effectively scalp its own tickets rather than combat real scalpers and brokers.
The backlash has renewed calls for oversight and regulation of Ticketmaster’s business practices. Critics say unchecked dynamic pricing is enabled by their monopoly position and will only drive prices ever higher as fans have no alternatives. But Ticketmaster defends dynamic pricing as an industry standard practice that helps them continue expanding artist offerings to fans. The debate shows little sign of fading given ongoing consumer anger over the new technology.
Legal Action and Government Scrutiny
Class action lawsuits have been filed against Ticketmaster questioning the lawfulness of their fees, market dominance and anti-competitive actions. While some suits have succeeded in bringing minor reforms, none have fundamentally impacted their market position.
TheDepartment of Justice and Federal Trade Commission have looked at antitrust concerns around Ticketmaster over the years but so far taken limited action. Their 2010 merger with LiveNation was approved with some conditions around contracts and licensing agreements. But antitrust regulators have struggled to rein in their growing power across primary and secondary ticket markets.
Individual states including New York have opened investigations of their own into Ticketmaster but again limited fundamental change. Some states have banned Ticketmaster from charging fees for tickets resold through their platform. And New Jersey recently fined them for parking surcharges deemed improper. But state efforts have also struggled to alter market dynamics enabling Ticketmaster’s dominance.
In Congress, some Representatives have called for hearings and legislation aimed at Ticketmaster but with no tangible impact yet. Bills like the BOSS Act would restrict exclusive promoter deals and platform bias. While pressure grows, major reforms remain elusive due to lobbying influence and complexity of antitrust law.
Potential Future Changes
Looking ahead, here are some potential changes that could happen regarding Ticketmaster:
- Federal regulators intervene to limit exclusivity deals and breakup the Ticketmaster-LiveNation merger.
- Class action lawsuits bring rulings forcing fee capping or improved fee disclosures.
- State laws ban egregious fees or require minimum customer service standards.
- Artists, promoters, and venues refuse to work with Ticketmaster over fan complaints.
- Blockchain / cryptocurrency based ticketing platforms emerge as lower-cost alternatives.
- Other big players like Amazon or Paypal enter the ticketing market and challenge the monopoly.
Despite rising public pressure, Ticketmaster remains deeply entrenched given its long history of dominance across so many music and event industries. But there are openings for the right challenges or disruptive alternatives to emerge and alter the landscape to the benefit of fans and consumer choice. Ticketmaster’s reluctance to voluntarily change remains a driving force propelling the search for solutions.
Conclusion
Ticketmaster’s position as the dominant player across significant portions of the live event ticketing industry has made them a lightning rod for criticism and complaint for over a decade. While they defend their pricing and practices as normal business operations, many consumers feel their market power and technical advantages are unfairly exploited at the expense of pricing transparency and competition.
Absent fundamental changes forced through regulation, lawsuits or competitive disruption, Ticketmaster remains highly likely to continue operating in similar ways. Their priority on serving venues, promoters and corporate interests ahead of fans keeps them tone deaf to much of the criticism. It remains to be seen when or if external pressures will eventually force more significant reform. But for now widespread consumer anger seems unlikely to abate given the limited ticketing options the market provides.
