Ticketmaster is a dominant player in the ticket sales and distribution industry. They sell tickets on behalf of event organizers and venues and act as the primary ticket provider for many major concerts, sporting events, and live entertainment shows. Some key factors that point to Ticketmaster having monopolistic control of the industry include:
Market Share
Ticketmaster has a huge share of the primary ticket sales market, estimated to be around 70-80% in the United States. They sell tickets for most major concert tours, sporting events, and live entertainment. Such a commanding market share indicates lack of competition and monopolistic control.
Barriers to Entry
There are high barriers to entry for potential competitors looking to enter the primary ticket sales market. Ticketmaster has exclusive long-term contracts with many major venues and promoters. They also have entrenched relationships with artist managers and sports franchises. The magnitude of their operations, infrastructure, and investments also deter new players.
Vertical Integration
Ticketmaster has vertically integrated by acquiring various companies involved in other aspects of live events. They own TicketWeb, a ticketing website that sells tickets on behalf of smaller venues. They also own Front Gate Tickets which provides ticketing services for large music festivals and events. This vertical integration allows them to monopolize the whole live event ticketing process.
Predatory and Exclusionary Practices
Ticketmaster utilizes predatory pricing and exclusionary practices that make it difficult for competitors. They leverage their vast resources and relationships to undercut potential rivals on ticket fees and offerings. Long-term exclusive deals and loyalty rebates also lock major venues and promoters into using Ticketmaster exclusively.
Lack of Substitute Services
For high-demand concerts, shows, and sporting events, there are no close substitutes for primary ticket sales. Ticketmaster dominates the primary market where the tickets are first sold before reaching secondary resellers and exchanges. For premium experiences, fans have limited alternatives to purchasing tickets directly from Ticketmaster.
Evidence of Monopoly Power
Ticketmaster’s ability to charge high fees (often 25% or more of ticket face value) indicates they have pricing power and monopoly control. Their ability to withstand public and political scrutiny over their fees and service also demonstrates reduced competitive pressures. They have acquired smaller companies to expand their operations, evidencing monopoly power.
Government Scrutiny
Ticketmaster has faced anti-trust inquiries from the U.S. Department of Justice in the past, though no major action has been taken. There have also been calls for greater regulation and investigation into Ticketmaster’s practices and contracts, indicating their monopolistic position has concerned watchdog agencies.
Comparison to Other Markets
In competitive markets for commodities like gasoline, profit margins are razor thin and no single player can control prices. Ticketmaster’s high fees and charges indicate lack of true competition and monopoly power as suppliers in competitive markets could not sustain such high markups.
Lack of Competitive Innovation
Healthy capitalist markets thrive on competition driving innovation, better quality and service, and consumer choice. Ticketmaster’s market dominance has led to stagnation and lack of innovation. Their website and service has changed little over the years, indicating lack of competitive pressure.
Consumer Sentiment
Public opinion polls and online reviews show Ticketmaster is one of the most unpopular companies amongst consumers. Their poor ratings and frustrated customers indicate captive consumers with no competitive alternative companies to turn to for primary event ticket sales.
Conclusion
While Ticketmaster maintains they operate in a competitive landscape, their overwhelming market share, barriers to entry, exclusionary tactics, and monopoly power all strongly indicate they hold an effective monopoly in the primary ticket sales marketplace. Their dominance and lack of serious rivals has led to high fees, poor service, lack of innovation, and poor public perception. For major concerts, shows, and sporting events, Ticketmaster has little to no competition, leaving fans and event organizers with limited options and at the mercy of their pricing and policies. Though difficult to challenge an entrenched quasi-monopoly, Ticketmaster’s position ultimately hurts consumers, event organizers, and the live entertainment industry.
Key Factor | Evidence of Monopoly Power |
---|---|
Huge market share (70-80%) | Dominant position that controls pricing and competition |
High barriers to entry | Exclusive long-term contracts, entrenched relationships, magnitude of operations deters competitors |
Vertical integration | Owns multiple companies involved in live events, allows Ticketmaster to control entire ticketing process |
Predatory pricing and exclusionary tactics | Uses resources and leverage to undercut rivals; locks venues and promoters into exclusive deals |
No close substitutes for premium tickets | Dominates primary ticket sales marketplace; limited alternatives for in-demand tickets |
Able to charge high fees over 25% of ticket price | Pricing power indicates lack of competitive pressures |
Withstood regulatory scrutiny | No major DOJ antitrust action taken despite inquiries over years |
Acquired smaller competitors | Buying rivals evidence of monopoly power and lack of competition allowing this |
Key Statistics Demonstrating Ticketmaster’s Market Control
- 70-80% market share in US primary ticket sales
- $1.6 billion in ticket revenue in 2021
- Sold 500 million tickets globally in 2019 prior to the pandemic
- Charges fees ranging from 25% to over 50% of ticket face value
- Named “Most Hated Company in America” multiple times
- 62% consumer dissatisfaction rating in 2022 survey
Despite public perception and frustration with its fees and services, Ticketmaster maintains dominance as there are no viable competitors able to challenge its control over premium live event ticketing. Both venue owners and music fans are beholden to Ticketmaster’s policies and prices due to lack of alternatives.
Key Events Demonstrating Ticketmaster’s Power
Here are some notable examples demonstrating Ticketmaster’s market control and monopoly power in the industry:
2010 – Live Nation and Ticketmaster Merger
The 2010 merger between Live Nation (the largest concert promoter) and Ticketmaster (the largest ticket seller) created Live Nation Entertainment, a vertically integrated company controlling ticketing and promotion for the majority of large live music events and concert venues.
2018 – Ticketmaster Forces Out Rival Upstart
When rival ticket seller AEG attempted to launch its own ticketing site AXS to challenge Ticketmaster, Ticketmaster used its leverage and influence to pressure event venues, teams, and artists from using AXS. This stifled their largest potential competitor.
2022 – Taylor Swift Eras Tour Ticket Debacle
When Taylor Swift announced her hotly anticipated Eras tour, Ticketmaster’s site crashed and was plagued with problems angering fans. Ticketmaster’s statement that they could have sold 2 million tickets if capacity allowed underscored the extreme demand and their monopoly position as the sole primary seller.
Key Reasons Monopolies Are Problematic
Some reasons why Ticketmaster’s effective monopoly in primary ticket sales is bad for consumers and the industry include:
- Allows them to charge exorbitant fees well above competitive rates
- Limits innovation and investment since competition is stifled
- Provides poor customer service due to lack of alternatives
- Forces venues and artists into difficult contractual terms
- Prevents rivals from keeping them accountable and honest
- Restricts consumer choice, freedom and access
- Gives them unchecked power to control pricing and policies
Though Ticketmaster will contend they are a service enhancing competition and efficiency, their market dominance ultimately harms consumers, venues, artists, and the live entertainment ecosystem.
Prices over Time Show Lack of Competition
Year | Average Ticketmaster Fee Amount |
---|---|
1995 | $3.50 |
2000 | $8.62 |
2005 | $10.70 |
2010 | $14.39 |
2015 | $18.93 |
2020 | $25.46 |
2022 | $28.49 |
The ability to consistently raise fees over decades, despite public outrage, shows Ticketmaster’s monopoly power and lack of competitive pressures or viable alternatives for consumers. Their fees increased over 700% from 1995 to 2022.
Conclusion
In conclusion, there is compelling evidence and multiple factors that demonstrate Ticketmaster holds a dominant monopoly in the primary event ticketing industry. Their market power allows them to get away with unpopular practices like soaring fees that would not be feasible in a competitive market. Lack of serious rivals has led to stagnation and limited choice for consumers and venues. Ultimately, Ticketmaster’s monopolistic control over premium live entertainment ticketing has many negative impacts and harms the ecosystem. Though difficult to challenge, calls for greater competition and investigation into their anti-competitive practices are justified. Ticketmaster’s position as an entrenched middleman gatekeeper raises valid monopoly concerns.