Ticketmaster, the largest ticket sales and distribution company in the United States, has come under scrutiny by the United States Congress recently. Several issues have led Congress to investigate Ticketmaster’s business practices, especially surrounding high ticket fees and mergers that some say constitute monopolistic control of the ticket sales market.
What triggered the congressional inquiry into Ticketmaster?
In November 2022, Ticketmaster ran into major issues with the sale of tickets for Taylor Swift’s upcoming Eras Tour. Site crashes and long wait times during presales led to public outrage over Ticketmaster’s handling of the event. This debacle triggered questions about Ticketmaster’s dominance in the ticket sales market.
Soon after, members of Congress announced intentions to hold a congressional inquiry into Ticketmaster. Issues cited for investigation include:
- Excessively high fees – Services fees for Swift concert tickets ran as high as 50% of the base ticket price.
- Market consolidation – Ticketmaster sells 70% of major concert tickets, raising anti-trust issues.
- Bot attacks – Third-party bots are allegedly scooping up ticket inventory, making it harder for fans to purchase tickets at face value prices.
- Lack of transparency – Congress and consumer advocates argue Ticketmaster lacks transparency on its fees and operations.
The Swift onsale issues amplified long-standing complaints about Ticketmaster’s business practices, prompting Congress to act.
What anti-trust and market consolidation issues surround Ticketmaster?
A key area of congressional concern is Ticketmaster’s large share of the primary ticket sales market and whether that constitutes an illegal monopoly. Key facts about Ticketmaster’s market dominance include:
- Ticketmaster sells 70% of major concert tickets in the U.S. according to multiple estimates.
- They sell tickets for many of the largest venues and artists.
- Competing ticket companies like AEG and SeatGeek have much smaller market shares.
- Ticketmaster merged with Live Nation in 2010, combining the largest ticketing company with the largest concert promoter.
- Some critics argue the Live Nation-Ticketmaster merger essentially created a vertically integrated monopoly in the live events industry.
Ticketmaster maintains its market share is not illegal monopolistic control. However, the lack of major competitors does suggest consolidation and barriers to entry for newcomers in the ticket sales market.
What are some of the biggest complaints about Ticketmaster fees?
Outrage over Ticketmaster service fees reached new heights during the Taylor Swift Eras Tour onsale. Some key facts about Ticketmaster’s service fees include:
- Fees can equal 25% to 50% (or more) of a ticket’s base price.
- Ticketmaster defends fees as covering costs for ticketing services and features like fraud protection.
- But critics argue the fees are excessive and let Ticketmaster profit too heavily from transactions.
- Some congressional representatives want to cap Ticketmaster’s service fees.
- Fees are often added late in the checkout process, surprising customers.
The controversy highlights how Ticketmaster’s dominant position allows it to charge high fees that customers have little choice but to pay. Congress aims to investigate whether these fees constitute an abuse of market power.
How much does Ticketmaster dominate ticket sales for major concerts and events?
By most estimates, Ticketmaster sells 70% or more of tickets for major live entertainment events in the United States. A few key facts and figures that highlight their market dominance:
- An estimated 70% of tickets for major concerts go through Ticketmaster, based on polling data from Consumer Reports and analysis by industry publications like Billboard and Pollstar.
- Ticketmaster has exclusive ticket sales contracts with many of the largest venues and promoters like Live Nation.
- Ticketmaster sells tickets for 70 of the top 100 concert venues in the U.S. according to a 2020 Government Accountability Office report.
- The company sells tickets for high-profile concert tours by major artists like Taylor Swift, BTS, and The Weeknd.
- They are the exclusive ticket vendor for Broadway shows and several major sports leagues like the NFL, NBA, and NHL.
This level of dominance in major ticket sales gives Ticketmaster significant control over pricing and fees in the industry.
How does Ticketmaster’s relationship with Live Nation affect competition?
Ticketmaster’s relationship with Live Nation, the world’s largest concert promoter and venue operator, is a major focus of the anti-trust concerns. Key details include:
- In 2010, Ticketmaster and Live Nation merged in a deal valued at $2.5 billion.
- The merged company retains major dominance in both primary ticket sales (Ticketmaster) and event promotion (Live Nation).
- Critics argue the merger created a vertically integrated monopoly controlling virtually all aspects of major live entertainment.
- Live Nation owns, operates, or has exclusive booking rights for many major U.S. venues.
- Ticketmaster then has exclusive ticketing rights for Live Nation venues and concerts.
This tight integration between Live Nation and Ticketmaster appears anti-competitive to some analysts. Whether it constitutes an illegal monopoly remains a key question for Congress to investigate.
What allegations have there been of bot attacks and other issues impeding fair ticket access?
Congress is also investigating claims that Ticketmaster has not done enough to stop bot attacks and other issues that make it harder for fans to buy tickets. Some of the allegations include:
- Bots and scalpers scoop up large blocks of tickets during presales and onsales, making it harder for real fans to buy tickets.
- Tickets immediately appear for resale on secondary sites like StubHub at inflated prices.
- Ticketmaster’s own resale site, TradeDesk, enables scalping and high markups according to some critics.
- Fans struggle with crashed sites, long queues, confusing CAPTCHAs, and other issues when trying to buy popular tickets.
- Ticketmaster does not seem to be implementing best practices to deter bots and broker activity.
Ticketmaster claims it is constantly working to improve defenses against bots, limit scalping, and make buying tickets easier for fans. But critics say major problems persist that seem to benefit resellers over everyday ticket buyers.
How has the lack of competition in the ticket industry contributed to high prices and fees?
The lack of major competing ticketing companies is a key factor that enables Ticketmaster to charge high fees and set high ticket prices with impunity, according to critics. Factors related to industry consolidation include:
- With over 70% market share, Ticketmaster faces little pressure to lower fees to compete for business.
- The Live Nation-Ticketmaster merger created a vertically integrated company controlling virtually all aspects of live entertainment.
- High barriers to entry make it extremely difficult for would-be competitors to enter the market and offer lower fees.
- Venues and tours are heavily incentivized to sign exclusive deals with Ticketmaster given their huge size advantage over other players.
- Ticketmaster can set higher fees knowing customers have little choice but to pay them if they want tickets.
This lack of alternatives has enabled Ticketmaster to gain unprecedented pricing power, contributing to ever-higher costs for consumers. Breaking up the Ticketmaster monopoly could be one way to restore market competition and consumer choice.
What options does Congress have for limiting Ticketmaster’s market power?
If Congress determines Ticketmaster is harming consumers through anti-competitive practices, it has a few options to consider for limiting market power. These could potentially include:
- Breaking up the Live Nation-Ticketmaster merger on anti-trust grounds.
- Passing legislation to promote more competition in primary ticket sales.
- Passing a federal law to cap Ticketmaster’s service fees.
- Opening antitrust investigations through agencies like the DOJ or FTC.
- Requiring more fee and pricing transparency from Ticketmaster.
- Banning Ticketmaster from engaging in ticket resales.
More drastic measures like breaking up the Live Nation and Ticketmaster merger would face major hurdles. But increased scrutiny from Congress could pressure Ticketmaster to be more transparent and consumer friendly even without major structural changes. Still, many fans and consumer advocates want to see Ticketmaster’s power reduced through legal actions.
How has Ticketmaster responded to criticisms of its market dominance?
Ticketmaster has pushed back against allegations of monopolistic practices. Some of its key counterarguments include:
- They face significant competition from venues selling direct to fans, AEG, SeatGeek, and other players.
- Fees cover costs for important services like fraud protection and platform maintenance.
- Dynamic pricing responds to supply and demand.
- They have invested heavily in anti-bot efforts and other technology to protect fans.
- They provide an important service connecting fans with events.
- Breaking up the company would hurt consumers by making ticketing more fractured.
However, many are skeptical of Ticketmaster’s claims. They counter that justifications like costs and services do not adequately explain the extraordinary size of some fees. And competitors like SeatGeek argue their business demonstrates lower fees are possible even at scale. So Congress aims to closely scrutinize Ticketmaster’s arguments as it evaluates potential consumer harms.
How could legislation to cap fees or mandate fee disclosures improve the ticket buying experience?
Two legislative steps Congress could take are capping Ticketmaster’s fees and requiring more transparent fee disclosures upfront. Here is how these consumer protections could help:
- Capping fees – This would directly limit how much Ticketmaster could charge in fees, potentially saving consumers hundreds of dollars on popular events.
- Fee transparency – Requiring disclosure of estimated fees earlier in the checkout process would eliminate sticker shock at checkout.
- Informed decisions – Customers could better factor total costs into purchase decisions earlier.
- Accountability – Clear fee disclosures would help expose just how high Ticketmaster’s charges are.
- Fair comparison – Consumers could better compare total ticket costs across different events, venues, and ticket companies.
These relatively simple legislative steps could bring much-needed transparency and limits to Ticketmaster’s fees. However, the political feasibility and ramifications would need thorough examination.
How extensive are Ticketmaster’s exclusive deals with major venues and promoters?
Ticketmaster’s exclusive ticketing deals with a large portion of major venues and promoters reinforce its dominance. Key information on these exclusive contracts includes:
- Ticketmaster states it has ticket deals with over 500 major venues and promoters.
- This includes exclusive agreements with large venues like Madison Square Garden in New York and major festivals like Lollapalooza.
- As the world’s largest promoter and venue operator, Live Nation grants Ticketmaster exclusive rights for most of its concerts and venues.
- Deals typically last 5-10 years and consolidate Ticketmaster’s position as the primary ticketing service.
- Smaller competitors have difficulty matching these exclusive deals with top venues and artists.
These mutually beneficial deals make Ticketmaster the entrenched ticketing service for most large concerts, sports leagues, and entertainment events nationwide. Breaking up these exclusive arrangements could be one way to open the market.
How does dynamic pricing impact costs for fans and benefit Ticketmaster?
Ticketmaster makes extensive use of dynamic pricing, which raises or lowers prices based on demand. This controversial practice has notable impacts:
- Fans see frequent price fluctuations for the same tickets.
- Prices for high-demand events can rise to very high levels.
- Critics argue fans lose predictability and face gouging on big events.
- Ticketmaster claims dynamic pricing helps reflect fair market value.
- The practice likely increases revenue for Ticketmaster and their venue/promoter partners.
- Lack of competition reduces pressure on Ticketmaster to limit price hikes.
While arguably maximizing revenue, dynamic pricing draws ire from many consumers for a lack of fairness and price transparency. It epitomizes Ticketmaster’s ability to unilaterally set costs due to limited competition.
Conclusion
In summary, Ticketmaster’s huge market share, controversial fees, dynamic pricing, and alleged anti-consumer practices haveappropriately raised the scrutiny of Congress. While Ticketmaster defends its business, the lack of competition and transparency in ticketing remains highly problematic for consumers.Congressional action and investigations could help rein in Ticketmaster’s market power and improve consumer protections. Fans eagerly await solutions that will make acquiring tickets more fair, affordable and straightforward.
