Live Concert Ticketing: Monopolization & Price Gouging

Live music performance is one of the most important parts of being in a band, one of the most important ways for fans to connect with artists, and a gigantic money-making staple of the music industry. Without live performance, many artists' careers would crumble, and the way we think of music and the industry now would change drastically. So, when it comes to such an important aspect of the music career world, one would think large ticket sellers would find a good middle ground between helping bands, venues, the fans, and themselves, but unfortunately, this is not the case. Instead, the venues, ticket sellers, and bands get the most out of sales, and fans are left with unnecessarily high prices and service fees, leading many live music fans unable to attend certain concerts they want to, and have to be more selective about which artists they spend their money on. The biggest ticket seller that people have problems with is Ticketmaster, especially since they merged with Live Nation in 2010. They now have almost monopolistic control of the ticket selling industry, and control ticket sales for many of the country’s top artists and major venues. With how the music industry has already declined in album sales due to streaming, it’s not unreasonable to think that with increased prices and service fees, Ticketmaster could start to push people away from living shows when they could watch artists perform cheaper or for free online. If concert attendance started to drop and fall majorly, many artists could be negatively affected in their work, and the music industry could change majorly again in a direction that makes it harder for artists to have successful careers. Ticketmaster is currently a running monopolistic business selling price gouged tickets to fans with extreme service fees, if something isn’t done about it soon the music industry could be hugely affected in the future; by breaking up Ticketmaster, putting restrictions on how a company can sell tickets, and allowing other up and coming ticket companies to take more charge of bigger venues and bands, the Ticketmaster and price gouging of tickets issues could be helped.

History

It’s important to look into the history of Ticketmaster to see how it works, why it got successful, and how it got to be the massive business entity it is now. Two Arizona State University event employees started Ticketmaster in 1976 as a way to update and modernize ticket selling. It didn’t really start to take off until the 1980s, though, when Ticketmaster got a new CEO, Fred Rosen. Rosen was known for his aggressive business tactics and ego and pushed Ticketmaster to the top of the ticketing game. One of the main reasons that Ticketmaster rose to the top so fast was because of what it offered to venues. Many of the ticket companies of the time only charged minimal fees to the fans, and instead charged the venues to use the ticket selling service. What Ticketmaster changed about the system was that they offered the venue the opportunity to make money from ticket sales instead. While the ticket sales went towards show expenses and band guarantees, the surcharges allowed Ticketmaster and the venue to make a much larger profit out of the fan’s pockets. Soon, Ticketmaster essentially controlled most of the market seeing as they helped the venues make so much extra money. Bands and fans started having issues with Ticketmaster in the 1990s when it had become the leader in ticket selling.

One of the most notable anti-Ticketmaster bands was Pearl Jam, who had a huge problem with how expensive the ticket prices were for a summer tour they we’re supposed to do, and they ended up taking Ticketmaster to court over it, though unfortunately, they lost. With the growth of the internet, Ticketmaster got even more control, much to the dislike of music attendees, especially when it came to being able to buy physical tickets at the venues to avoid the heavy fees. By 2007, it was calculated that they controlled around 70% of the ticket selling market, but if that wasn’t enough, they merged with one of the other biggest ticket companies at the time, Live Nation, in 2010. Live Nation was widely considered to be the largest concert promotion company at the time, so the idea of the largest promoter and largest ticket seller combining was a scary one to a lot of people. One of the conditions of Ticketmaster being able to merge with Live Nation was that it had to license its ticket selling software to it biggest competitors, primarily the company AEG, so that they too could develop a successful system for selling tickets, but unfortunately not much has come of that. Instead, Ticketmaster and Live Nation are still on top and in control of the biggest venues.

Not only have prices and service fees risen since 2010 but Live Nation has also been accused of pressuring some of its venues into forced contracts with Ticketmaster, something that agrees heavily with the idea that Ticketmaster and Live Nation are monopolistic entities. One of the ways that Live Nation could do this was that Live Nation would have the opportunity to book a big artist at a venue, but if the venue didn’t want to use Ticketmaster, Live Nation would threaten to book the artist elsewhere, effectively forcing the venue’s hand of what ticket company to use. Another example would be Live Nation stopping work with big venues that had switched to AEG’s ticket service. When an entity that controls as much of the market as Live Nation and Ticketmaster starts forcing venues to not use or associate with its competitors, the dangerous territory is entered from an anti-trust law standpoint. The history of Ticketmaster shows how it started as a good business idea, but soon became monopolistic, destructive, and incredibly powerful in the industry.

Solutions

One potential solution to the giant problem that is Ticketmaster would be to go down the route of an old-fashioned breaking up of a monopoly. Essentially what would happen here is that Ticketmaster would be broken up into multiple, smaller competing firms, this way there would be actually competition in the marketplace and one company wouldn’t control everything. This could be useful in many ways to the music industry. First, by getting rid of the Live Nation and Ticketmaster merger and opening up competition in the market, ticket prices could go down since these companies would be all be vying for the fan’s patronage. Without the price gouging and expensive service fees, more fans could afford shows, potentially encouraging an even bigger market of concert attendees. This moves into helping the bands as well because, with higher turnouts, middle-level bands can have much more opportunity to make greater amounts of money through touring. Live Nation and Ticketmaster’s prices and tactics can work for superstars who sell out stadiums, where people might be more willing to pay outrageous prices (especially when it comes to meet and greets with the artists), and granted they do pay their artists generously. But, for middle-level bands, touring and drawing fans in can be difficult enough, much less when one has to worry about fans being able to afford to come to the shows due to price gouging and service fees, but with multiple companies now competing it’d be much more possible for these bands to have bigger careers.

Another potential solution to these issues would be to impose stricter regulations on how these companies charged their customers. For example, there could be price ceilings set to determine the maximum prices that tickets, meet and greets, or other concert-related ticket purchases could be sold at. This could help protect fans from price gouging and unfair practices. There could also be regulations for the service fees, so that Live Nation and Ticket Master, as well as the venues, and making unfair amounts of money of the fans. It’s important to note that there are a good amount of people who would think this was too much government control, and that there would be more successful ways of stopping the monopolistic practices. This would force the hand of the ticketing companies, though, and make it harder for them to bend the rules of the market to what they want.

Lastly, one of the most viable solutions to the ticket monopoly would be pushing for smaller ticketing companies to have much more power in the market. There are a lot of newer, and currently considerably smaller, ticketing companies online, and while they might not currently have the technological capacity to compete with Ticketmaster they could be grown to that point. While Ticketmaster does have the infrastructure to handle thousands of people trying to buy tickets on their website at once, and the smaller ticket companies don’t, Ticketmaster lacks something that the smaller companies do not: the ability to change with the current demands of the market. Ticketmaster is so big that for the most part, it won’t be able to change majorly at all, at least not easily. That’s where the smaller ticket companies have a huge advantage. They can tailor their services to fit whatever the current climate needs. These companies can help everyone from small DIY bands putting on shows in bars to middle-sized bands playing in medium clubs. This could be a game-changer in the ticketing world, and it’s easy for people to support, besides the fact that many venues and bands are already using these systems.