Ticketmaster is the dominant primary ticket outlet for major entertainment events in the United States. According to a U.S. Government Accountability Office report in 2018, Ticketmaster sells tickets for 70% of the major venues in the U.S. This gives Ticketmaster tremendous power over both event venues and consumers looking to purchase tickets.
How did Ticketmaster gain a monopoly in ticket sales?
Ticketmaster gained its dominant position through acquiring several of its early competitors in the ticket resale industry. In 1991, Ticketmaster purchased Ticketron, which was its main rival at the time. In the late 90s and early 2000s, Ticketmaster acquired several online ticketing companies including Matchbox Ticketing, CitySearch, and Paciolan. These acquisitions allowed Ticketmaster to corner the market on primary ticket sales.
Ticketmaster also signed exclusive deals with major venues and promoters to be their only ticket outlet. These exclusive contracts made it so consumers had no choice but to purchase through Ticketmaster for major concerts and shows. Ticketmaster’s market power allowed it to coerce venues into these exclusive arrangements.
What are the impacts of Ticketmaster’s monopoly in the ticket industry?
Ticketmaster’s dominance as a primary ticket outlet has led to several negative impacts for consumers:
- Higher fees – Ticketmaster can charge higher fees compared to a competitive market since it faces little competition. Fees average 27% on top of the ticket price.
- Reduced innovation – There is less incentive for Ticketmaster to innovate its purchasing experience since it does not face competitive pressure.
- No choice for consumers – Consumers must use Ticketmaster to purchase tickets for most major events and have no alternative ticket outlets.
- Higher prices – Economists have estimated Ticketmaster’s monopoly power has led to higher ticket prices across the industry.
Its monopoly position also negatively impacts venues, promoters, and acts who have no choice but to sell primary tickets through Ticketmaster.
What are some examples of Ticketmaster’s high fees and charges?
Here are some representative examples of the high fees and charges that Ticketmaster imposes on ticket buyers:
Event | Base Ticket Price | Fees | Total Cost |
---|---|---|---|
Music Festival | $200 | $43.35 | $243.35 |
Ariana Grande Concert | $125 | $32.15 | $157.15 |
Professional Football Game | $85 | $25.75 | $110.75 |
WWE Wrestling Match | $40 | $18.20 | $58.20 |
As you can see from these examples, Ticketmaster routinely charges fees of 25-30% or more on top of the base ticket price. These fees include vague charges like “service fees” and “order processing fees.”
What efforts have been made to curb Ticketmaster’s monopoly power?
There have been some efforts to try and limit Ticketmaster’s dominance in the industry:
- Class action lawsuits – Ticket buyers have filed several lawsuits accusing Ticketmaster of abusing its monopoly power. Most have settled out of court.
- DOJ investigation – The U.S. Department of Justice launched an investigation into Live Nation-Ticketmaster in 2018 but has not taken significant action.
- New competitors – Some new competitors like AXS and Eventbrite have emerged but have very small market share.
- Bruce Springsteen lawsuit – Springsteen sued Ticketmaster in the 1980s for monopolistic practices but lost the case.
Despite these efforts, Ticketmaster remains firmly entrenched with little viable competition in the vast majority of major event venues.
Bruce Springsteen’s lawsuit against Ticketmaster
In the 1980s, Bruce Springsteen sued Ticketmaster arguing its exclusive deals with venues violated antitrust laws. Springsteen and his team wanted more control over ticket pricing and distribution. However, Ticketmaster argued that venues requested its exclusive services. The courts ultimately ruled in favor of Ticketmaster, cementing its dominance in the industry.
How has Ticketmaster responded to accusations of being a monopoly?
Ticketmaster has consistently denied that it is a monopoly and argues that consumers and venues voluntarily choose to use its services. Some of its main arguments include:
- Venues choose Ticketmaster – Ticketmaster claims it does not force venues into exclusive deals and that venues choose to use them for their technology, marketing, and distribution capabilities.
- Plenty of competition – Ticketmaster states that there are many big competitors in ticketing including AXS, Altitude Tickets, and Veritix.
- Benefits consumers – Ticketmaster claims its market power benefits consumers by allowing it to invest in better ticket buying technology.
- Lower costs for venues – Ticketmaster claims its scale lowers distribution costs for venues.
However, critics argue these defenses do not justify Ticketmaster’s unusually high 30% or more fees that are out of line with a competitive market.
What are the major competitive threats that could challenge Ticketmaster?
There are a few competitive forces that may potentially loosen Ticketmaster’s grip on the ticketing industry in the future:
- Government antitrust action – If the DOJ filed an antitrust lawsuit, it could potentially undo some of Ticketmaster’s exclusive deals and open the market.
- Disintermediation from artists – Major artists trying to circumvent Ticketmaster by directly distributing tickets could reduce their dominance.
- Emergence of blockchain ticketing – Blockchain-based ticketing startups aim to decentralize the industry and cut out middlemen like Ticketmaster.
- Resale market – The growth of the ticket resale market through sites like StubHub provides a way to bypass Ticketmaster for initial sales.
- Competitors exploiting fees – Rival ticketing companies may gain share by aggressively marketing against Ticketmaster’s fees.
However, Ticketmaster has proven very resilient against competitors historically. Its decades of dominant market share will be hard for any newcomers to overcome.
How blockchain ticketing could threaten Ticketmaster’s dominance
Blockchain-based ticketing aims to eliminate the need for centralized ticket distributors like Ticketmaster. Using blockchain, tickets can be sent directly from the event issuer to the ticket holder’s digital wallet. This allows primary transactions without intermediaries. Startups like Yellowheart and Blockparty are trying to use blockchain to decentralize ticketing.
By cutting out the middleman, blockchain ticketing could reduce fees and give more control to venues and teams. While the technology is still emerging, it represents an innovative way future ticketing could function without monopolists like Ticketmaster.
How has Ticketmaster innovated their ticket buying technology?
While critics argue Ticketmaster’s monopoly position reduces innovation, Ticketmaster has introduced some new technologies to improve the ticket buying process:
- Digital tickets – Ticketmaster developed digital ticketing technology to give consumers contactless entry to events by using their phones.
- Verified resale – Ticketmaster’s fan-to-fan ticket exchange platform allows transfer of tickets between buyers.
- Presence detection – Using Bluetooth and other signals, Ticketmaster can identify unauthorized ticket use and ticket fraud.
- Waiting room – For high demand shows, Ticketmaster’s waiting room queues up buyers and helps prevent site crashes.
- Preferred seating – Fans can pick from a custom interactive seat map to find their desired seat locations.
These innovations have helped Ticketmaster stay competitive against new entrants and improve the ticket buying experience for fans. However, critics argue a truly competitive market would spur even faster ticketing innovation.
Could Ticketmaster thrive without its monopoly status?
It is an open debate whether Ticketmaster could thrive and prosper in a more competitive ticketing market without its dominant position. There are arguments on both sides:
Yes, Ticketmaster could still thrive without a monopoly due to:
- Strong brand recognition – Ticketmaster is a well-known household name consumers identify with ticketing.
- Technology investments – Ticketmaster has made significant investments in its ticketing platforms that competitors would have a hard time replicating.
- Sales and marketing expertise – Ticketmaster has highly specialized sales and marketing teams skilled at promoting events and driving ticket sales.
- Event promotion abilities – Ticketmaster has proven capabilities for promoting events through email marketing and social media.
No, Ticketmaster relies on its monopoly power:
- Weak incentives for efficiency – Monopoly power reduces incentives for Ticketmaster to control costs and operate efficiently.
- Lack of innovation – Ticketmaster’s monopoly has likely caused slower innovation compared to a competitive market.
- Artificially high fees – Their high fees would be unsustainable in a truly competitive market.
- Commodity business – Selling basic tickets with no differentiation is hard to do profitably without monopoly power.
Overall, there are reasonable arguments on both sides. While Ticketmaster has some strengths it could leverage, its business model seems heavily dependent on maintaining its dominant industry position.
Conclusion
In conclusion, Ticketmaster exerts monopoly control over primary ticket sales for major concerts and events in the United States. It gained this power by acquiring competitors, signing exclusive deals, and exploiting its market position. This dominance allows Ticketmaster to charge exorbitant fees with little competitive pressure.
Antitrust action, increased competition, and new technologies like blockchain ticketing could potentially weaken Ticketmaster’s grip on the industry. However, after decades of market control, their monopoly power remains firmly entrenched in 2022. Significant changes to the ticketing market landscape would be needed to shift Ticketmaster from its dominant perch.