Ticketmaster is the largest ticket sales and distribution company in the United States, selling tickets for concerts, sports events, theater shows, and more. With no close competitors, some have accused Ticketmaster of having an unfair monopoly in the live events industry.
What is a monopoly?
A monopoly exists when a company has significant market power and can influence prices or exclude competition. Some key factors of a monopoly include:
- Being the single seller of a product or service
- Controlling a large share of the market
- Having the power to set prices
- Using exclusionary practices to maintain market control
A monopoly is generally seen as anti-competitive and against the interests of consumers. Monopolies can charge higher prices, produce lower quality goods, and lead to less innovation than more competitive markets.
Does Ticketmaster have a monopoly in event ticketing?
By some measures, Ticketmaster does appear to have monopoly power in primary event ticketing:
- Ticketmaster sells tickets for over 80-90% of major concerts and shows in the US.
- In 2010, Ticketmaster merged with Live Nation, the largest concert and event promoter in the US. This vertical integration gave Ticketmaster control over both event promotion and ticketing.
- Ticketmaster has multi-year exclusive deals with many major venues and artists. This locks out competitors.
- There are high barriers to entry for new ticketing companies due to Ticketmaster’s scale and exclusive rights.
However, Ticketmaster does face some limited competition:
- AXS is the second largest primary ticket seller in the US, though a distant second to Ticketmaster.
- Many sports teams and leagues, like MLB and NBA, run their own internal ticketing services.
- Smaller players like Eventbrite allow self-service ticketing for smaller events.
- The secondary ticket resale market includes big players like StubHub.
Ticketmaster’s main advantages
Ticketmaster dominates primary event ticketing in North America due to several key advantages:
1. Scale and market power
As the largest player, Ticketmaster benefits from economies of scale, an established brand, and significant bargaining power over venues and event organizers. The more tickets they sell, the lower their per unit costs.
2. Vertical integration
By owning both the ticketing platform and major event promoter Live Nation, Ticketmaster controls both the production and distribution of live entertainment. This makes new entry very difficult.
3. Exclusive contracts
Ticketmaster’s exclusive deals with venues lock out competitors. Many venues agree to use Ticketmaster as their sole ticket provider in return for upfront payments, a share of fees, and marketing support.
Venue | Deal with Ticketmaster |
---|---|
Staples Center (Los Angeles) | Exclusive provider through 2030 |
Madison Square Garden (New York City) | Exclusive provider through 2023 |
United Center (Chicago) | Exclusive provider through 2024 |
Anti-competitive practices
Some of Ticketmaster’s business practices have also been accused of being anti-competitive:
- Price floors – Ticketmaster imposes price floors on third-party ticket resellers, keeping prices high.
- Bundling – Requiring venues to use Ticketmaster for all events, not just some.
- Tiered pricing – Requiring venues to use Ticketmaster’s variable/dynamic pricing system.
- Extra fees – Charging excessive order processing and service fees on top of ticket prices.
Government scrutiny
Ticketmaster’s dominant position has attracted scrutiny from governments and regulators:
- The US Department of Justice reviewed the Ticketmaster-Live Nation merger for anti-trust concerns before approving it.
- In early 2022, the DOJ reopened its antitrust investigation into Live Nation Entertainment.
- Some US states have laws banning Ticketmaster from monopolistic practices and requiring fair competition.
- In the UK, the Competition and Markets Authority is currently investigating suspected breaches of antitrust law by Viagogo and Ticketmaster.
Ticketmaster’s defense
Ticketmaster argues that it does not actually have a monopoly or restrict competition. It claims:
- Artists, promoters, and venues choose Ticketmaster voluntarily – they are not obligated to use them.
- Ticketmaster provides valuable services like analytics, security, marketing, and consumer support that justify its position.
- There is competition from players like AXS, Eventbrite, stadiums’ internal ticketing, and ticket resale platforms.
- Ticketmaster’s fees cover the costs of running its platform and are not excessive.
Could Ticketmaster be broken up?
Some activists and politicians have argued that Ticketmaster should be broken up or separated from Live Nation to improve competition, lower fees, and restrain prices. However, others argue this could be disruptive and that more competition is gradually entering the market already.
Conclusion
While Ticketmaster does not have an absolute monopoly, it does appear to hold substantial market power and use anti-competitive tactics. Its position seems difficult to challenge due to its scale, integration, and exclusive deals with venues and promoters. However, Ticketmaster does still face some fringe competition and government scrutiny may encourage fairer practices.