In the 1990s, Ticketmaster was the dominant ticket sales and distribution company in the United States. They had exclusive contracts with many major venues and promoters across the country. This led to a huge controversy regarding their fees, market dominance, and anti-competitive practices.
What led to Ticketmaster’s market dominance in ticket sales?
In the early 1990s, Ticketmaster began securing exclusive contracts with venues and promoters across the US. They would sign long-term deals granting them full control over all ticket sales for those venues/events. This took away options from consumers, forcing them to purchase tickets through Ticketmaster. Key factors that allowed Ticketmaster to gain so much market dominance included:
- Mergers and acquisitions – They acquired rival ticketing companies like Ticketron, acquiring their client venues.
- Exclusive deals – Multi-year exclusive contracts with major venues and promoters locked up key inventory.
- Industry connections – Longstanding relationships in the industry provided insider access.
- Technical advantage – Their first-mover advantage in online ticketing gave them an edge.
Within a few years, Ticketmaster had locked up so many exclusive deals that they controlled over 80% of major venue ticket sales. This lack of competition allowed them to impose high fees without the risk of losing client venues.
What fees and charges did Ticketmaster implement?
Ticketmaster became notorious for the array of fees that it charged ticket buyers on top of the base ticket price. These fees added a major surcharge to each ticket, often 30% or more. Some of the most common Ticketmaster fees included:
- Convenience fees – Charged for the convenience of buying tickets online/by phone.
- Order processing fees – Fees for processing an order and printing tickets.
- Facility charges – Charged on the venue’s behalf for upkeep/maintenance.
- Service fees – Vague fees for Ticketmaster’s services.
Ticketmaster was also accused of intentionally using confusing, inconsistent fee names to obfuscate the full costs. Many consumers didn’t realize how the additional fees added 25% or more to every ticket purchase until final checkout.
What anti-competitive and unfair practices were they accused of?
Ticketmaster faced widespread accusations of monopolistic and anti-competitive practices that exploited consumers, including:
- Price gouging – Critics accused Ticketmaster of imposing unreasonable fees and markups enabled by their lack of competition.
- Misleading fees -Using purposely confusing fee names and disclosure methods that hid the full costs.
- Predatory contracts – Leveraging their dominance to impose rigid, long-term exclusive deals on venues/promoters.
- Anti-consumer restrictions – Their exclusive deals barred venues from offering direct ticketing options that avoided fees.
- Anti-competitive threats – Allegedly threatened retaliation against venues that worked with competitors.
Ticketmaster was portrayed as monopolistically squeezing both consumers and business clients alike through their stranglehold on ticketing inventory.
When did the criticism of Ticketmaster go mainstream?
In the early to mid-1990s, criticism of Ticketmaster’s business practices grew from a minor complaint into major mainstream attention:
- 1994 – Pearl Jam’s public war on Ticketmaster over fees brings headlines.
- 1995 – Australian rock band Silverchair calls Ticketmaster a “rip-off” in music magazines.
- 1997 – Consumer advocate Ralph Nader leads a series of public hearings on Ticketmaster’s practices.
- 1997 – Ticketmaster’s CEO gets grilled in a Senate Judiciary Committee hearing on antitrust issues.
This amplified public attention prompted legal action against Ticketmaster, including a major lawsuit in 1997 alleging they had violated antitrust laws. The media spotlight put significant pressure on Ticketmaster to answer for their controversial business tactics.
What were some key moments in the public criticism of Ticketmaster?
Some major events that fueled public criticism of Ticketmaster in the 1990s included:
- 1994: Pearl Jam cancels tour after Ticketmaster refuses fee cap. Their very public fight lands on the cover of Forbes.
- 1995: Canadian rock band The Tragically Hip publicly battles Ticketmaster, refusing to play their venues.
- 1997: A Miami newspaper reports Ticketmaster is being investigated for antitrust violations.
- 1997: Ticketmaster CEO Fred Rosen gets grilled in a Congressional hearing over fees and competition issues.
- 1998: The band Aerosmith blames Ticketmaster fees for having to raise concert ticket prices to over $50, a staggering amount at the time.
The media covered these events extensively, helping turn Ticketmaster’s business practices into a national consumer rights issue.
How did Pearl Jam’s feud with Ticketmaster ignite the controversy?
Pearl Jam’s very public dispute with Ticketmaster fueled major attention and scrutiny onto Ticketmaster’s business practices. Here’s an overview:
- 1994: Pearl Jam announces a U.S. tour in small venues to keep prices low for fans.
- Ticketmaster demands venue exclusivity, refuses Pearl Jam’s fee cap request.
- Tour gets cancelled after Ticketmaster blocks most venues from participating.
- Pearl Jam takes their complaint public, gains massive media coverage.
- Forbes magazine cover features Pearl Jam’s Eddie Vedder holding Ticketmaster tickets in a fist.
- Pearl Jam accuses Ticketmaster of monopolistic practices, starts Justice Department petition.
Though Pearl Jam failed to bring down Ticketmaster, their very public crusade against Ticketmaster’s practices brought unprecedented national attention to the ticketing giant’s controversial business tactics.
What criticisms and allegations did Pearl Jam make against Ticketmaster?
Pearl Jam alleged several anti-competitive and unethical practices by Ticketmaster, including:
- They were a monopoly that cornered the market through exclusive deals.
- They forced unreasonable mandatory fees on customers.
- Their fees were much higher than their costs required.
- They punished venues and bands who didn’t comply with their demands.
- Their practices prevented bands from keeping ticket prices low for fans.
Pearl Jam argued that Ticketmaster’s monopoly power let them impose unjust costs and restrictions that harmed consumers, venues, and performers alike. Their public crusade against these practices struck a chord with many fans and musicians.
How did Ticketmaster respond to the criticism from Pearl Jam?
Ticketmaster strongly rejected Pearl Jam’s criticisms and defended their business practices by arguing:
- Their fees covered costs of services that benefitted fans and venues.
- Exclusive contracts were mutually agreed upon and beneficial for venues.
- They had legal rights to refuse business with clients who violated contracts.
- Their market dominance was because venues preferred their services, not coercion.
- Their ticketing systems provided consumers more options and convenience.
They dismissed Pearl Jam’s complaints as grandstanding and asserted that their business practices were reasonable reflections of their strong market position, not monopolistic abuses. Their arguments failed to sway public opinion amid Pearl Jam’s high-profile crusade.
How did the Ticketmaster controversy relate to broader concerns about the live music business?
The Ticketmaster controversy tied into growing concerns over consolidation and commercialization in the live music business, including:
- Fans complaining of high ticket prices making concerts unaffordable.
- Bands encountering obstacles and red tape when trying to organize tours.
- Venues having less independence and control over their operations.
- Perceptions of large corporations exploiting music fans and artists.
- Fears that music was becoming less about creativity and more about profits.
Ticketmaster became the face of everything seemingly wrong with the live music industry. Critics saw their business practices as indicative of broader corruption of the historic concert experience by unchecked corporate power and greed.
What were some of the notable lawsuits filed against Ticketmaster related to fees and competition issues?
Some major lawsuits that alleged illegal anti-competitive practices by Ticketmaster include:
- 1995: Advance Entertainment – Ticket discounter sued over exclusive venue deals barring competitors. Settled, terms confidential.
- 1996: MusicFest lawsuit – Class action suit won $18 million settlement over excessive fees.
- 1997: Perrone v. Ticketmaster – Suit led by Bill Perrone of canband.com alleged improper market leverage. Settled.
- 2003: String Cheese Incident – Band sued over restrictive ticketing agreement. Settled confidential terms.
While details of settlements and outcomes varied, the lawsuits collectively portrayed Ticketmaster as an anti-competitive bully in the ticketing market.
How did the grunge band Pearl Jam end up in a feud with Ticketmaster in 1994?
Pearl Jam’s legendary fight against Ticketmaster’s practices in 1994 stemmed from the band’s idealistic effort to make shows affordable for teenage fans by keeping ticket prices under $20. Their ensuing standoff unfolded as follows:
- Pearl Jam announces 1994 tour aiming to use small venues and low ticket prices.
- Most venues have exclusive Ticketmaster contracts barring other ticketing services.
- Ticketmaster demands standard service fees that double ticket prices.
- Pearl Jam lobbies for a fee cap per ticket, Ticketmaster refuses.
- Nearly all venues forced to decline hosting Pearl Jam’s tour over Ticketmaster conflict.
- Remaining tour dates get cancelled after Ticketmaster blocks most venues.
Pearl Jam’s mission of budget-friendly tickets for fans was thwarted by Ticketmaster exclusivity deals. The very public fight turned Pearl Jam into consumer crusaders against Ticketmaster’s practices.
What came of Pearl Jam’s Justice Department petition against Ticketmaster?
Pearl Jam’s efforts led to some government scrutiny but no major action against Ticketmaster:
- 1994 – Pearl Jam files petition with the U.S. Justice Department Antitrust Division demanding an investigation into Ticketmaster.
- 1995 – Justice Department launches informal review of complaints against Ticketmaster.
- 1995 – Justice Department declines to proceed with formal investigation or legal action after initial review.
- 1998 – U.S. Justice Department approves Ticketmaster’s merger with competitor Ticketron.
The Justice Department ultimately took no significant legal action, so Pearl Jam failed to trigger sanctions on Ticketmaster via the government. But their complaints contributed to wider scrutiny of Ticketmaster’s monopoly-like business practices in the 1990s.
What later changed with the Ticketmaster industry dominance and fee controversies?
Though Ticketmaster remained dominant, its highly controversial practices gradually eased due to multiple competitive and technological changes, including:
- Emergence of rival ticketing companies like Tickets.com and Ticketfly provided more competition.
- Bands like The Tragically Hip bypassed Ticketmaster entirely by handling their own ticketing.
- Newer startups like Eventbrite offered self-service ticketing options.
- Venues began responding to fan complaints by lowering some fees.
- Internet and mobile innovations expanded direct sales options beyond Ticketmaster.
While Ticketmaster still faces regular complaints, their former monopoly hold over live event ticketing has loosened amid rising competition and shifting consumer options. Direct-to-fan online sales have also helped bands and venues bypass Ticketmaster’s once-dominant distribution network.
Conclusion
The Ticketmaster controversies of the 1990s highlighted anti-consumer impacts of monopolistic control over live event ticketing. Intense public scrutiny and criticism forced reforms even without major government antitrust action. The fan-friendly ethos of 1990s alternative rock bands like Pearl Jam fueled demands for more transparent, reasonable ticketing – demands that reverberate in debates over fees and fair access even today.