Ticketmaster has long dominated the ticket sales industry, serving as the primary ticket provider for many major concerts, shows, and sporting events. However, Ticketmaster’s position as an effective monopoly in the ticket sales market has led to high fees, limited options for consumers, and other predatory practices. Given these issues, many are wondering – how can we break up Ticketmaster’s stranglehold on event ticketing?
What is Ticketmaster?
Ticketmaster is a ticket sales and distribution company based in Beverly Hills, California. It sells tickets for concert, sports, and theater events on behalf of event organizers through its website, mobile apps, and retail outlets. Ticketmaster has deals with many major event venues, leagues, and organizers to be their exclusive ticket provider.
This gives Ticketmaster tremendous power in the ticket sales market – it is essentially the only option consumers have for purchasing tickets to the most popular events. According to some estimates, Ticketmaster sells over 500 million tickets per year and controls 80% of the primary event ticket market.
How did Ticketmaster become so dominant?
Ticketmaster gained its dominant position through aggressive expansion and acquisition of competitors over several decades. Some key events include:
- In 1976, Ticketmaster was founded as a means for venues to centralize and control their ticketing.
- In 1982, Ticketmaster began focusing on exclusive deals with venues and promoters.
- In the 1990s and 2000s, Ticketmaster acquired several major competitors like Ticketron and Paciolan.
- Ticketmaster merged with Live Nation in 2010, further solidifying its hold on live event ticketing.
Throughout this growth, Ticketmaster leveraged its increasing size and scale to sign exclusive ticketing deals with major concert promoters like Live Nation and major sports leagues like the NFL. It now serves over 30,000 clients across 30 countries.
What anti-competitive practices does Ticketmaster engage in?
With its dominant market position, Ticketmaster has been accused of abusing its power and engaging in anti-competitive business practices that harm consumers. Some examples include:
- Excessive fees – Ticketmaster tacks on a wide variety of fees like “service fees,” “processing fees,” and “order processing fees” that can add over 30% to each ticket’s face value.
- Predatory exclusivity agreements – Ticketmaster’s exclusive ticketing contracts make them a mandatory option for consumers wanting to attend popular events.
- Abuse of market power – With no competition, Ticketmaster faces little pressure to innovate or improve the consumer experience.
- Stifling competitors – Some allege that Ticketmaster uses exclusivity agreements and other tactics to block competitors from challenging its business.
- Limiting ticket availability – Critics claim Ticketmaster colludes with scalpers and intentionally limits regular ticket availability to drive up prices.
These behaviors directly harm consumers by limiting options, increasing prices, and degrading service quality. But Ticketmaster’s market dominance makes it difficult for consumers to take their business elsewhere.
Why is it so hard to compete with Ticketmaster?
There are several key barriers that make it extremely difficult for new players to compete against Ticketmaster:
- Entrenched exclusive deals – Ticketmaster’s longstanding exclusive ticketing contracts with major venues and leagues prohibit competitors from selling tickets to top events.
- High capital costs – Building a ticketing platform to compete at Ticketmaster’s level requires an enormous upfront investment that creates a high barrier to entry.
- No vendor lock-in – Consumers typically don’t stick with one ticketing vendor, they just want whatever site has tickets to the event they want. This makes it hard for new entrants to gain loyal customers.
- Network effects – As the biggest player, Ticketmaster offers the most tickets and choices, making consumers more likely to use them over a new platform with less selection.
- Brand recognition – Ticketmaster has built highly recognized global brand in ticketing over 40+ years.
These realities make it exceedingly difficult for competitors to take on Ticketmaster. Any serious challenge requires matching Ticketmaster’s scale and inventory breadth – an immense undertaking. This helps explain why most efforts by competitors like AEG and Ticketfly have not made a major dent in Ticketmaster’s business.
What are the impacts of Ticketmaster’s dominance on consumers?
Ticketmaster’s stranglehold on event ticketing has a number of negative implications for consumers:
- Higher fees – Ticketmaster’s excessive ordering, processing, and service fees often add over 30% to the base price of tickets.
- Lack of choices – With no alternative sellers, consumers have little option but to pay Ticketmaster’s high prices if they want to see major concerts and events.
- Poor customer service – Without competitors applying pressure, Ticketmaster has little incentive to provide quality service or support.
- Stifled innovation – Ticketmaster’s market power allows them to resist innovation in things like paperless ticketing and dynamic pricing.
- Predatory scalping – Critics claim Ticketmaster enables scalping of its own tickets instead of taking measures to ensure fans can buy at face value.
Ultimately, consumers pay higher prices and endure a lower quality of service because of Ticketmaster’s ticketing monopoly. The lack of alternatives in the market leaves fans with little choice or recourse.
What are some ways we could break up Ticketmaster’s dominance?
There are a few possible approaches that could help dismantle Ticketmaster’s stranglehold on event ticketing:
- Preventing anti-competitive exclusivity deals – New laws could prohibit exclusive ticketing contracts and require more open ticketing markets for major venues and events.
- Splintering the company – Regulators could forcibly split up the Ticketmaster/Live Nation conglomerate to reduce their market power.
- Opening up ticket APIs – Mandating open data access would enable competitors to integrate primary ticket inventory into their platforms.
- Requiring ticket fee transparency – Laws could force Ticketmaster to clearly disclose and justify all fees to make them more accountable.
- Supporting alternative ticketing platforms – New distribution models like blockchain-based ticketing apps could be one way to erode Ticketmaster’s control.
However, all of these possible solutions would require substantial intervention by regulators and lawmakers – something that Ticketmaster’s lobbyists work hard to prevent. Their market dominance affords them tremendous resources and influence over the political process.
What are the main arguments in defense of Ticketmaster’s business practices?
While Ticketmaster does have its fair share of critics, the company and its supporters also offer some counterarguments defending their business model:
- They have to pay large fees themselves to venues and event holders as part of exclusive ticketing deals.
- Exclusive contracts provide venues with a reliable, upfront source of income.
- They offer security features and fraud prevention that new entrants can’t match.
- Their ticketing systems provide valuable data and marketing services to help promoters.
- Ticketmaster handles all the hassles of selling tickets so venues don’t have to.
- Only a company with their scale can handle ticketing for major global events and tours.
Additionally, Ticketmaster argues that consumers always have the option not to purchase a ticket if they feel prices are unfairly high. Critics counter that this argument ignores the realities of consumer demand and loyalty for seeing specific events or artists perform live.
Is legal action against Ticketmaster viable? What are the challenges?
There is certainly an argument that Ticketmaster’s business practices justify legal action on anti-competitive grounds. However, successfully taking legal action against them faces some considerable challenges:
- Ticketmaster’s exclusive deals and integration with venues muddy the waters in terms of proving definitively anti-competitive conduct.
- Changes in ticketing technology have shifted parts of the process off of Ticketmaster’s systems, complicating where blame lies.
- Ticketmaster has successfully argued in past suits that consumers can opt not to purchase if they dislike their fees and terms.
- Demonstrating consumer harm can be difficult – while many dislike Ticketmaster, they still sell hundreds of millions of tickets annually.
- Ticketmaster can leverage tremendous legal and lobbying resources to contest and draw out any litigation.
Given these realities, any legal action would likely face years of procedural and evidentiary challenges. It may require establishing new standards of anti-competitive conduct in ticketing specifically. But while challenging, increased public pressure could build enough momentum to overcome these hurdles and spark a serious case against Ticketmaster’s practices.
Conclusion
Ticketmaster has clearly built up unacceptable levels of dominance and anti-competitive conduct in the event ticketing market. However, breaking their decades-long stranglehold will require substantial effort from regulators, lawmakers, and likely the courts. With their resources and influence, Ticketmaster won’t go down without a fierce fight. But the combination of consumer outrage and possible legal action represents the most viable path to dismantling their unfair business practices and paving the way for more consumer-friendly ticketing options.