Ticketmaster is the largest primary ticket outlet and a dominant force in the live entertainment industry. However, the company has faced longstanding criticism that its fees and practices essentially amount to legal ticket scalping. This article will examine the arguments on both sides to determine if Ticketmaster is actually a ticket scalper.
What is Ticket Scalping?
Ticket scalping refers to the resale of tickets, often at significantly inflated prices compared to their original face value. Scalpers will buy up large quantities of tickets, creating scarcity, and then resell them for profit. This is an illegal practice in many jurisdictions when done in certain public areas or without a vendor license. Critics argue that scalping harms consumers, denies fair access to tickets, and exploits artists’ popularity.
Key aspects of ticket scalping:
- Buying tickets primarily to resell at higher prices, not to attend event
- Creating artificial scarcity by buying up large quantities of tickets
- Charging large markups over the original price
- Reselling in unauthorized ways like on the street
- Profiting off demand without authorization from event hosts
Ticketmaster’s Fees and Order Processing
As an authorized primary ticket outlet, Ticketmaster does have legal access to large quantities of tickets directly from venues and event organizers. However, critics allege their fees and policies effectively replicate scalping:
- Service fees often add 25-30% to listed ticket prices
- Fees are not transparent upfront in many cases
- Tickets will disappear from carts if not purchased quickly
- Speculative tickets may be listed before venues finalize seat maps
- Tickets are non-transferrable, requiring further fees for resales
These practices, critics argue, mirror how scalpers artificially constrain supply and charge above market rates. Fans must rush to buy at inflated prices before other buyers sweep up the limited tickets.
Ticketmaster Fees Breakdown
Ticketmaster charges a variety of fees on top of the ticket’s face value. These include:
- Service fee – Typically around 25% and Ticketmaster’s main revenue
- Order processing fee – Around $5-10 per ticket
- Facility charge – Varies, goes to venue operating costs
- Convenience fees – For phone orders, print-at-home tickets, etc.
- Delivery fees – For physical ticket shipments
So a $100 ticket could easily cost $140+ after these various fees are added on. Critics argue these fees are excessive and net Ticketmaster huge profits by exploiting demand.
Are Ticket Resale Platforms Better?
Ticketmaster also operates a number of ticket resale platforms, including Ticketmaster Resale and TicketExchange. Some argue these are preferable to scalpers because:
- They have buyer guarantees against invalid or fraudulent tickets.
- Pricing reflects current market demand rather than scalpers hoarding supply.
- More convenient delivery options, including digital tickets.
- Proceeds can go back to event hosts instead of solely to scalpers.
However, others counter that these official resale platforms now just capture the inflated profits Ticketmaster used to cede to scalpers. For top shows, there is little difference in paying a scalper hundreds above face value versus Ticketmaster Resale.
Ticketmaster’s Market Power
Much of the condemnation of Ticketmaster relates to their singular dominance of primary ticket sales:
- They sell around 70% of all major event tickets in the US.
- Exclusive contracts limit venues from using other primary ticket services.
- Their 2010 merger with Live Nation raised antitrust concerns.
- No real competition exists in upfront primary ticket sales.
This lack of alternatives grants Ticketmaster considerable leeway to charge high fees and dictate terms with little recourse for fans. Critics argue its monopoly position enablesTicketmaster to essentially scalp its own tickets.
Is Ticketmaster Essential for Event Management?
Ticketmaster argues that its fees provide necessary services to venues and event organizers:
- Sophisticated platform to manage high demand and sales volume.
- Protection against speculative buying and industrial scalping.
- Data analytics on customer patterns and inventory management.
- Integrated ticket sales and event promotion.
Without Ticketmaster, the argument goes, events would not have professional resources to handle sales, marketing, and logistics. Fans would be at the mercy of malicious scalpers who hoard tickets purely for profit.
However, critics dispute that venues could not effectively self-manage ticket sales with modern software. They argue Ticketmaster’s model has only entrenched itself through anti-competitive behavior.
Attempts to Challenge Ticketmaster’s Dominance
There have been several major attempts to challenge Ticketmaster’s effective monopoly:
- Bands like Pearl Jam refusing to use Ticketmaster in the mid-1990s. This sparked a Department of Justice probe into anti-competitive practices.
- Upstart competitors like ScoreBig emerged in the 2000s but failed to gain significant market share.
- The 2009 Live Nation-Ticketmaster merger was approved with certain antitrust conditions, but their dominance continues.
- Class action lawsuits were filed around 2010 charging collusion and price-fixing, but ultimately failed.
Despite public complaints, Ticketmaster has successfully maintained its position controlling primary event ticketing against these threats. No competitors have succeeded in breaking its hold.
Could Blockchain Disrupt Ticketmaster?
Some propose new blockchain-based platforms could finally disrupt Ticketmaster’s dominance. Benefits might include:
- Transparent and immutable ledgers tracking ticket ownership.
- Smart contracts automating ticket transfers and resales.
- Cutting out middlemen like Ticketmaster.
- Better anti-scalping controls.
- Direct artist engagement with fans.
However, blockchain ticketing is still an emerging concept. Established player dominance, regulatory issues, and mainstream adoption barriers remain. It likely cannot overhaul the industry overnight.
Should Ticketmaster Be Regulated Like a Scalper?
Given Ticketmaster’s entrenched position, some argue:
- Antitrust action should break up their ticket monopoly.
- Legislation should cap Ticketmaster’s fees.
- Their resale platforms should follow scalper regulations.
- Artists should collectively boycott using Ticketmaster.
However, Ticketmaster will assert they provide necessary ticketing services at market rates. Their dominance alone does not necessarily indicate illegal monopolistic activities.
Conclusion: A Complex Debate
The debate around Ticketmaster boils down to perspectives on whether their dominance enables essential event management at scale or exploits fans through monopolistic scalping practices. Valid arguments exist on both sides.
There are clear parallels between classic ticket scalping behavior and some of Ticketmaster’s much-criticized practices. However, establishing systematic abuses as an illegal monopoly has proven difficult.
With no meaningful competitors, Ticketmaster currently faces limited pressure to change its model. It seems the company has generally succeeded in asserting its fees provide necessary ticketing services, not just scalping profits. Yet dissatisfaction and distrust of Ticketmaster still runs high among many fans and consumer advocates.
The advent of new technologies like blockchain could potentially shift the playing field. For now, Ticketmaster remains entrenched with advantages of scale and integration that are difficult for upstart platforms to challenge. But if any company could find ways to crack Ticketmaster’s market power by putting control back in the hands of venues, artists, and fans, they would likely find an eager audience.