Ticketmaster has dominated the ticket sales market for decades, effectively operating as a monopoly. With exclusive contracts locking down the primary ticket sales for the vast majority of major concerts and shows in the United States, Ticketmaster charges exorbitant fees and provides poor customer service without the accountability that competition fosters. There are many reasons why Ticketmaster should be broken up or face stricter regulation, including reduced innovation, lack of consumer choice, high fees, and poor customer service.
What is Ticketmaster?
Ticketmaster is a ticket sales and distribution company based in Beverly Hills, California. It sells tickets for concerts, sports events, theater productions, and more. Ticketmaster has contracts with the vast majority of major venues and event organizers throughout the United States. Under these exclusive contracts, Ticketmaster is the only authorized primary ticket seller for events at these venues.
Ticketmaster was founded in 1976 and has grown substantially since. In 2010, it merged with Live Nation to become the world’s largest live events company. Live Nation is a live events promoter that organizes tours and festivals for artists. While Live Nation and Ticketmaster are technically separate entities today due to anti-trust concerns about the merger, the two companies maintain close financial ties.
Today, Ticketmaster sells over $30 billion in tickets each year and has more than 500 million unique visitors to its websites and apps. It has no major competitor in the primary ticket sales market.
How did Ticketmaster get so big?
There are two key reasons Ticketmaster has become so dominant in ticket sales:
- Exclusive contracts – Since the 1980s, Ticketmaster has secured exclusive contracts with the majority of major venues, artists, and promoters to serve as their sole authorized ticket seller. This locks out any competitors from selling primary tickets.
- Acquisitions – Ticketmaster has acquired several of its early competitors, including Ticketron, TicketWeb, Tickets.com and Paciolan. This cemented its stranglehold on the primary ticket sales market.
Ticketmaster’s exclusive contracts are the most concerning. Any venue or promoter that wants to host major concerts and events is forced to deal with Ticketmaster only. No competitors are allowed to sell primary tickets to events at these exclusive venues, which today includes most major arenas, stadiums, theaters, clubs, concert halls, and amphitheaters in the US.
What are the problems with Ticketmaster’s monopoly?
Ticketmaster’s monopoly over primary ticket sales for live events in the US causes numerous problems for consumers, competitors, and the industry as a whole. These include:
- High fees – As a virtual monopoly, Ticketmaster faces little competitive pressure to keep its fees reasonable for customers. Services fees routinely add 25% or more to every ticket’s face value.
- Reduced innovation – With no competition, Ticketmaster has little incentive to improve its online platforms, apps, service delivery, and other features over time.
- Poor customer service – Ticketmaster’s customer service is notoriously poor, in part due to its monopoly position shielding it from accountability.
- No consumer choice – Consumers have no ability to support Ticketmaster competitors even if they provide better service or lower fees.
- Anti-competitive behavior – Ticketmaster has frequently taken anti-competitive actions to maintain its monopoly, including blocking competitors from receiving tickets.
Evidence shows that Ticketmaster’s fees are significantly higher compared to areas with more primary ticket competition. Its platform and service delivery also lag behind innovators in e-commerce and other technology fields. While customers are often frustrated with Ticketmaster, they have no alternative to purchase primary event tickets.
What are some examples of Ticketmaster’s anti-competitive practices?
Here are some examples of anti-competitive actions taken by Ticketmaster to squash competitors and maintain its monopoly power:
- Blocking competitors from receiving tickets – Ticketmaster has technological abilities to identify bulk ticket purchases by resellers and can block certain buyers. They have used this tool to block some competitors from acquiring ticket inventory.
- Interfering with competitors’ existing ticket sales – When TicketsNow, an online ticket resale exchange, was acquired by Ticketmaster in 2008, Ticketmaster reduced visibility into TicketsNow’s supply of second-hand tickets. This made TicketsNow’s tickets harder to find and disrupted its business.
- Leveraging partnerships – Ticketmaster can incentivize partners like venues, promoters, and artists to refuse business with competitors through bundled offerings, rewards programs, and other exclusive benefits. These tactics discourage partners from going outside Ticketmaster’s sales channels.
- Retaliatory threats – There is evidence of Ticketmaster threatening to reduce promotion for events or refusing to list events in retaliation against venues and promoters who do business with competitors.
In many past anti-trust cases, the company being scrutinized wasn’t necessarily doing anything outright illegal. Instead, it is the total weight and effect of their unfair business tactics that violate the spirit of anti-trust law, if not the letter of it.
What are the main arguments for breaking up Ticketmaster?
Here are some of the leading arguments why the U.S. Department of Justice or Federal Trade Commission should bring an anti-trust case against Ticketmaster and break up its monopoly:
- Restore competition – Breaking up Ticketmaster’s exclusive contracts would allow competitors to re-emerge, offering consumers choice, lower fees, and better service driven by competition.
- Prevent further acquisitions – Ticketmaster has bolstered its dominance by acquiring smaller competitors. Preventing further consolidation of power is crucial.
- Prohibit anti-competitive behaviors – Regulators must ban unfair tactics Ticketmaster uses to freeze out rivals while continuing to monopolize the ticket sales market.
- Lower barriers to entry – Strict anti-trust enforcement is needed to lower existing barriers for companies trying to compete with Ticketmaster.
- Curb abuses of power – With its virtual monopoly, Ticketmaster acts with impunity. Competition would curb abuses and give consumers somewhere to turn.
The core goal of any anti-trust case against Ticketmaster should be restoring competition to the primary ticket sales market. This will benefit consumers, hold Ticketmaster accountable, and create a more fair and just ticketing ecosystem for venues, promoters, and artists as well.
What are some counterarguments in defense of Ticketmaster?
Ticketmaster has offered rebuttals to arguments in favor of breaking up its ticketing monopoly. Here are some of the company’s likely defenses:
- Existing exclusive deals were made fairly – Ticketmaster will argue it secured exclusive contracts through competitive negotiating and bidding processes, not anti-competitive coercion.
- Consumers benefit from convenience – Dealing with one dominant ticket seller makes ticket buying more convenient than checking multiple sellers.
- Competitors can’t match technical capabilities – Smaller companies lack the technical expertise to handle massive online traffic for major event launches, Ticketmaster will claim.
- Artists and venues like the status quo – Ticketmaster will argue its exclusive deals exist because artists, teams, promoters, and venues prefer the benefits Ticketmaster offers them currently.
- High fees fund operational costs – The company will defend its fees as simply covering the costs required to run its platform, provide customer support, and market events.
However, evidence suggests claims of necessity, technical capabilities, and consumer convenience do not outweigh the need to restore fair competition through breaking up Ticketmaster.
What precedents exist for breaking up anti-competitive companies?
There is clear historical precedent in the United States for using anti-trust law to break up dominant companies whose monopoly power harms consumers and competition. Some relevant examples include:
- AT&T – The 1982 breakup of AT&T’s telephone monopoly split its local and long-distance operations. This paved the way for innovations like internet phone calls and mobile networks.
- Standard Oil – The 1911 Supreme Court order to break up Standard Oil’s monopoly over the oil industry led to the creation of new competitors like Chevron, Exxon, and Mobil.
- Microsoft – A 2000 court ruling found Microsoft guilty of illegally maintaining its OS monopoly. This prevented further anti-competitive actions against rivals.
These cases show that monopolistic dominance over a sector for decades is not an acceptable status quo. The public interest demands that competition be restored, even if it means dismantling and dividing existing market-controlling behemoths.
What are the chances an anti-trust case could successfully break up Ticketmaster?
Despite its entrenched position, several factors suggest a strong anti-trust case could be brought against Ticketmaster with a reasonable chance of success:
- Clear consumer harm – Ticketmaster’s soaring fees and poor service leave little doubt consumers suffer under its monopoly.
- Documented anti-competitive practices – Ticketmaster’s blocking of competitors and retaliation against partners bolsters an anti-trust case.
- Changed leadership at DOJ/FTC – Under the Biden Administration, regulators have shown renewed interest in anti-trust enforcement.
- Bipartisan concern in Congress – Lawmakers from both parties have expressed concerns about Ticketmaster’s practices and market dominance.
- Support from competitors – Smaller ticket sellers locked out by Ticketmaster would provide key evidence and political backing for legal action.
While any monopoly case poses challenges, the conditions appear primed for a potential anti-trust challenge against Ticketmaster that could ultimately succeed in breaking up its stranglehold.
What are the potential outcomes if Ticketmaster is forced to break up?
Here are some of the likely potential outcomes if Ticketmaster is broken up through anti-trust action:
- More competitors re-emerge – Smaller ticket sellers could once again expand and compete for venues/promoters’ business.
- Lower fees – As rivals vie for customers, competitive pressure drives down fees, saving consumers money.
- Innovations in offerings – Competing platforms introduce new innovations to attract event partners and ticket buyers.
- Improved consumer choice – Buyers can shop different sellers, choosing their preferred platform based on fees, customer service, and features.
- Fairer business practices – With rivals able to access inventory and restricted from collusion, shady tactics are reduced industry-wide.
While the transition may pose temporary challenges, evidence from past break-ups shows the end result is almost always a market that serves consumers, innovators, and new competitors better in the long run.
How would breaking up Ticketmaster benefit fans?
If Ticketmaster’s ticketing monopoly is broken up, fans would benefit tremendously in the following ways:
- Lower ticket prices – More competition in ticketing would restrain egregious fees, making tickets more affordable.
- Better buying experiences – With more ticketing options, the services and interfaces would improve to attract buyers.
- Fairer access to tickets – Anti-competitive allocation practices would be restricted, leveling the playing field for obtaining hot tickets.
- More responsive customer service – Accountability from competition would force all ticketing firms to improve support for ticket buyers’ issues.
- More innovation – Rivals would introduce new technologies, viewing options, bundling, and other innovations unrestrained by the current monopoly.
Fans are the most abused stakeholders under Ticketmaster’s dominance. Breaking its monopoly would directly spur more options, lower costs, and better treatment for ticket buyers.
How would breaking up Ticketmaster benefit artists?
Here are some of the major benefits artists could see from dismantling Ticketmaster’s monopoly on primary ticket sales:
- Higher average ticket revenue – Lower distribution fees means more money passes through to artists from each ticket sold.
- Easier tour/event logistics – A restored competitive landscape gives artists and managers more leverage and options for planning tours and events.
- Flexibility on ticket bundles/offers – Artists would have more freedom designing custom ticket bundles and special offerings for fans.
- More insight into sales data – Transparency would improve around ticketing data, sales reporting, and fan analytics.
- Healthier negotiating position – When venues and promoters can’t rely entirely on Ticketmaster, they become more willing to negotiate with artists.
The broken ticketing market today tilts negotiating power away from artists toward middlemen. Restoring competition gives artists and their teams more options and leverage when planning events and tours.
How would breaking up Ticketmaster benefit music venues?
Here are some of the main ways breaking up Ticketmaster could benefit concert halls, theaters, clubs, arenas, and other live event venues:
- Alternative sales channels – Venues would no longer be locked into Ticketmaster exclusively and could access competitors eager for their business.
- Lower distribution costs – With fees driven down by the market, venues may see more revenue pass through from each ticket sold.
- More negotiating leverage – Anti-trust enforcement restores venues’ ability to credibly threaten to use alternate vendors to get better deals from Ticketmaster.
- Flexibility on fan analytics – Venues would potentially have more freedom to integrate ticketing data with their own fan intelligence and CRM systems.
- Open door for innovations – Tech startups would again emerge to provide next-generation ticketing features without Ticketmaster using its power to coerce venues into ignoring them.
Venues have been trapped for years into an exclusive relationship with Ticketmaster on fundamentally unfair terms. Increased choice and leverage would restore power to venues and concert halls that deal directly with fans.
How would breaking up Ticketmaster benefit competitors?
Here’s an overview of some of the main benefits that breaking up Ticketmaster’s monopoly would offer for competitors and companies hoping to enter the ticketing industry:
- Access to inventory – Competitors would once again be able to access primary ticket inventory to major concerts and events instead of being locked out.
- Ability to grow – Smaller ticketing companies would have the ability to expand nationally and compete in any market on fair terms, no longer blocked by Ticketmaster.
- Venture funding – Investors would renew interest in funding ticketing startups, given the restored potential to compete and gain market share from Ticketmaster.
- More hiring appeal – With growth potential restored, competing ticketing companies could attract more top technical and product talent.
- Fair legal playing field – Ground rules would be leveled so that rivals don’t face implicit threats of retaliation for competing with Ticketmaster.
Breaking Ticketmaster’s stranglehold would spur a wave of growth, innovation, and renewed competition as consumer-friendly disruptors transform the ticketing landscape.
Conclusion
In summary, Ticketmaster has long maintained a monopoly over primary event ticket sales throughout the United States. This lack of competition has led to substantial consumer harm through inflated fees, poor service, lack of innovation, and anti-competitive behavior. Arguments for taking anti-trust action to break up Ticketmaster have grown stronger in recent years. There are now clear precedents of past monopolies being dismantled through regulatory action. The outcomes typically benefit consumers, competitors, and fairness in the marketplace. There is strong justification for legal and regulatory moves to restore competition the ticketing industry by dissolving Ticketmaster’s monopoly power. Fans, artists, venues, promoters, competitors, and the live events business as a whole would benefit greatly from renewed competition, choice, and innovation.