Ticketmaster is the primary ticket sales and distribution outlet for many major entertainment events in the United States and abroad. When purchasing tickets on Ticketmaster, customers are often unable to select their exact seat locations and are instead given “best available” seating. This can be frustrating for customers who want to sit in specific areas or ensure they are getting seats together for groups. There are a few key reasons why Ticketmaster limits seat selections:
High Demand
For extremely popular events where tickets sell out quickly, Ticketmaster limits seat selection to control inventory and prevent ticket brokers from buying up all the seats. By only offering certain seats at a time, it helps get tickets into the hands of more individual fans rather than brokers reselling at higher prices. It also builds excitement and urgency to make immediate ticket purchases.
Artist/Venue Preferences
The event organizer or artist often dictates how tickets get sold. They may hold back premium seats to sell at higher costs through fan clubs or sponsor packages. They also may not want to reveal the full seating chart far in advance and limit Ticketmaster to selling just certain sections.
Simpler Purchasing Process
Open seat selection requires customers to intricately study venue maps and do extensive research on views. To speed up purchases for high-demand shows, Ticketmaster directs customers to best seats available from the overall inventory. This cuts down on shopping cart abandonment due to seat indecision.
The History of Ticketmaster
Ticketmaster was founded in Arizona in 1976 by two computer programmers, Albert Leffler and Gordon Gunn. They created a software system to help regulate ticket distribution and minimize fraud associated with ticket resales. The technology enabled better inventory control and detailed ticket tracking.
The First Major Client
In 1982, Ticketmaster landed its first major client – The Philadelphia 76ers NBA team. The Sixers were having major issues with ticket scalping and fraudulent practices by brokers. Implementing the Ticketmaster system helped monitor inventory and get tickets directly into fans’ hands. After the success with the Sixers, the city adopted Ticketmaster for all events at their Spectrum arena.
Merger with Ticketron
In the early 90s, Ticketmaster looked to expand globally and merged with their rival Ticketron. At the time, Ticketron controlled over 80% of the major event ticket sales market including exclusive deals with the Olympics, NFL, NBA, and NHL. The merger made Ticketmaster the dominant player in the industry.
Going Digital
As the internet grew in the late 90s, Ticketmaster invested heavily in building out online sales capabilities. It acquired several regional ticketing companies to consolidate U.S. market share. The digital transition enabled fans to more easily buy tickets anytime and anywhere. However, it also opened the doors for secondary resale markets to proliferate leading to ongoing battles against scalpers.
How Ticketmaster Makes Money
Ticketmaster utilizes several different revenue streams:
Service Fees from Clients
For each ticket sold, Ticketmaster charges a fee to event organizers. This ranges from 5-20% of ticket face value. As the largest primary ticketing outlet, venues and promoters have little leverage to use alternatives without sacrificing massive volume. Service fees are Ticketmaster’s primary revenue generator.
| Event Category | Average Ticketmaster Service Fee |
|---|---|
| Concerts | 10-20% of ticket price |
| Sporting Events | 5-10% of ticket price |
| Theater/Performing Arts | 8-12% of ticket price |
Order Processing Fees from Customers
On top of service fees collected from event organizers, Ticketmaster tacks on order processing fees to the end ticket purchaser. This covers the costs of printing and delivery. Processing fees are typically $5-$25 per ticket depending on method of delivery and event.
Upselling Additional Services
Ticketmaster offers add-ons like parking passes, VIP packages, and more. These incremental sales bring in more fees and generate further profit. Research from Tickpick estimates 30% of Ticketmaster revenue now comes from upsells versus just ticket sales.
The Advantages Ticketmaster Offers Venues
Despite outrage over fees, venues continue partnering with Ticketmaster due to the operational advantages:
Broad Distribution Network
Ticketmaster provides partners access to millions of potential customers across their website, mobile apps, and third-party seller channels. Smaller ticketing platforms simply cannot match the same reach.
Analytics and Reporting
Venues gain insights into ticket buyer demographics and purchasing habits through Ticketmaster to improve future marketing and sales. The ticketing system provides detailed inventory management and sales reporting not available elsewhere.
Protection from Counterfeits
Ticketmaster offers fraud monitoring and prevention tools to identify counterfeit tickets. Their verification systems make it much easier to exclude fakes and ensure fans have valid tickets. This preserves brand integrity for venues.
Decreased Operational Burden
Managing ticketing logistics in-house requires large staffs to coordinate everything from online sales to box office management. Outsourcing to Ticketmaster allows venues to focus on the live event experience while reducing overhead costs.
Why Customers Dislike Ticketmaster
The primary complaints about Ticketmaster include:
High Fees
Customers pay anywhere from 10-25% above ticket face value when including all Ticketmaster fees. These significantly increase the costs to attend events over just the base price. Some feel these exceed reasonable charges for the services provided.
Lack of Transparency in Pricing
Tickets will advertise starting prices, but the fees are only revealed at checkout. This leads to frustration since final costs exceed what consumers expected to pay after seeing advertised pricing.
Difficulty Getting Good Seats
As previously mentioned, Ticketmaster limits visibility into available seats and controls which get released. Less desireable seats often get shown first. This makes it extremely difficult for customers to select preferred seat locations.
Technical Issues
High-demand events lead to website/app crashes which prevent ticket purchases at advertised times. Bots also scoop up inventory leading to rapid sellouts. This leaves many customers ticketless.
Lack of Customer Service
With no physical ticket locations, customers are forced to resolve issues through customer service channels. However, response times are painfully slow and problems rarely get adequately resolved.
Alternatives to Ticketmaster
While Ticketmaster maintains dominance, competitors have taken some market share by improving the ticket buying experience:
| Ticketing Company | Key Differentiators |
|---|---|
| AXS | More intuitive seat selection with 3D venue maps, lower fees |
| SeatGeek | Aggregate listings from primary + secondary markets |
| Eventbrite | Better tools for smaller/independent events |
| Dice | Focus on concert discovery and recommendations |
However, Ticketmaster maintains key exclusive deals with major venues, leagues, and promoters that limit adoption of alternatives for premium events. They also benefit from being the default ticketing option in the minds of most consumers.
Is Ticketmaster a Monopoly?
Ticketmaster ticks several boxes that are characteristic of an unfair monopoly:
Dominant Market Share
They control over 70% of the primary ticket sales market in the U.S. For major concerts and leagues like the NFL, it is near 100% control. This leaves consumers little choice but to use Ticketmaster.
High Barriers to Entry
Venues sign long-term exclusive deals and promoters own stakes in Ticketmaster making it extremely hard for competitors to gain traction. Their scale and resources also disadvantage startups.
Price Gouging
The unusually high fees and lack of transparency suggests Ticketmaster is abusing pricing power due to lack of competition. Prices far exceed costs to provide ticketing services.
No Innovation
The user experience and technology has changed little over the years despite their position. The website and apps remain outdated relative to other e-commerce leaders. This implies complacency due to market control.
However, thus far Ticketmaster has avoided any major antitrust lawsuits or government intervention to break up their dominant hold. As long as venues and leagues remain tied into exclusive deals, true competition remains limited. Fans have little choice but to reluctantly use Ticketmaster for premier live events.
Should Tickets Be Resold?
In addition to primary ticket sales, Ticketmaster also operates a secondary marketplace for ticket resales. This has proven controversial and caused accusations of double-dipping:
Arguments For Allowing Resales
– If events are sold-out, it allows fans who missed initial sales to still buy tickets
– Provides consumers choice in how they obtain tickets
– Enables fair market price discovery based on demand rather than artificial caps
Arguments Against Resales
– Leads to scalping and predatory speculative buying that shuts regular fans out
– Forces consumers to pay inflated markups over initial prices
– Rewarding scalpers incentivizes cheating of ticket buying limits and bots
There are merits to both perspectives. Strict no resale policies would prevent scalping but reduce options for fans who genuinely missed buying at onsale dates. It complicates matters that the resale marketplace is run by Ticketmaster itself though. Some believe they purposefully hold back inventory to create artificial scarcity and boost resale revenue.
Is Ticketmaster Too Big To Fail?
Ticketmaster is arguably too deeply integrated into the live events business to disappear or be disrupted anytime soon. Some key reasons they remain in control:
Contracts Lock Venues In
Many arenas and stadiums are bound to 5, 10, or even 20 year exclusive deals that prevent utilizing other ticketing services. Breaking contracts would be highly costly.
Artists Are Invested
Major promoters like LiveNation own substantial equity stakes in Ticketmaster. Top artists are financially tied to Ticketmaster’s success through tour deals with these promotion giants.
Fans Keep Relenting
Despite backlash over fees, Ticketmaster continues selling huge volumes of tickets. The convenience for marquee events trumps sufficient outrage for large scale consumer boycotts.
Government Antitrust Inaction
U.S. regulators have taken little interest in pursuing antitrust action against Ticketmaster despite its monopoly-like dominance. Political will for intervention remains low.
How Can You Get the Best Deals on Tickets?
Despite Ticketmaster’s entrenched role in ticketing, fans can still find ways to score deals and avoid excessive fees:
Buy Direct From The Venue Box Office
Ticketmaster fees are avoided by purchasing at the venue box office on opening sales days. The tradeoff is needing to arrive early and wait in long lines. Popular shows will still sell out quickly.
Check Secondary Market Sites
Prices can actually drop below face value on sites like StubHub closer to event dates as brokers slash prices to offload extra inventory. Last minute deals emerge, but often require flexibility.
Wait Out Dynamic Pricing Drops
Much like airfare, Ticketmaster prices fluctuate algorithmically based on demand trends. Checking back periodically may reveal price decreases as the event nears.
Enroll in Artist Presales
Most artists offer exclusive presales for fan club members and album buyers. These provide access to tickets before the general onsale and some seats are held exclusively.
Buy Group Tickets
For very popular events, you’ll have better odds buying 4+ tickets together versus individual seats. Group sales tend to have reserved allocations. Multi-ticket buyers also avoid some fees.
The Future of Ticketing
Despite ongoing customer frustrations, Ticketmaster retains its dominant position and will be hard to dethrone. But there are some trends that may disrupt parts of the industry:
Direct-To-Fan Sales
Tools like NFTs allow artists to directly manage ticketing and sell directly to fans without intermediaries. This reduces costs and provides artists larger revenue shares.
Mobile Tickets
E-tickets and home delivery removes the need for physical stubs and on-site box office management. It also enables seamless ticket transfers. Most post-COVID-19 events will be mobile ticket only.
Subscription Models
Startups are emerging to sell subscription passes for discounted access to local venues andshows. These help increase affordability and recurring engagement versus one-off purchases.
Dynamic Pricing
Instead of fixed pricing, demand-based algorithms will adjust prices in real-time similar to airline seats. This maximizes yield and converts price sensitive fans. But it will confuse budgeting efforts.
Conclusion
Despite ongoing backlash over opaque fees and questionable practices, Ticketmaster remains deeply embedded in the live event ticketing system. Their entrenchment based on long-term venue contracts, exclusivity clauses with leagues/tours, and artist partnerships continues to limit customer choice and stifle competition. This enables them to maintain pricing power and resist innovation pressure.
While alternatives have emerged to attempt improving the ticket buying experience, they have not made major dents in Ticketmaster’s stronghold over premium event inventory. Government antitrust intervention also remains unlikely due to intense lobbying and reasonable doubt over meeting monopoly definitions. Fans have limited recourse beyond buying direct, utilizing presales, and patiently playing the secondary market timing game.
Ultimately, Ticketmaster sits in an extremely lucrative position. As long as consumers keep paying the high fees, venues sign long-term deals, and legislators stay uninvolved, they have little incentive to fundamentally change. The live entertainment ticketing ecosystem will remain constrained absent some major competitive disruption. For most fans, Ticketmaster remains the only option for seeing top artists and leagues. Unchecked pricing power leaves consumers routinely frustrated but with minimal leverage to enact change.