Senators are looking into Ticketmaster and Live Nation’s business practices because of concerns about high ticket fees and lack of competition in the live event ticketing industry. Ticketmaster is the largest primary ticket provider in the United States, while Live Nation is the largest concert promoter. The two companies merged in 2010, leading to a near-monopoly in the industry. This has prompted questions about whether the merger has harmed consumers and if further action is needed.
Key Issues
High Fees
One of the main issues is Ticketmaster’s service and processing fees added onto ticket prices. These fees can sometimes add more than 30% to 50% to the base ticket price. With Ticketmaster controlling such a large percentage of primary ticket sales, consumers have complained of having no way to avoid these high fees.
Lack of Competition
Another concern is the lack of competition in primary ticket sales. Ticketmaster sells primary tickets for the large majority of major concerts and sporting events. Some analysts estimate they control over 70% of the primary ticket market. With so few other options, consumers cannot shop around for lower fees.
Vertical Integration
Ticketmaster’s 2010 merger with Live Nation, the largest concert promoter, created a vertically integrated company that has drawn antitrust scrutiny. Live Nation both promotes events and sells the tickets through Ticketmaster. This vertical integration means they control both the supply and distribution of tickets. Some worry this could further reduce incentives to lower fees and boost competition.
Key Events
Here are some key events that led to the current Senate investigation:
Date | Event |
---|---|
2009 | Ticketmaster and Live Nation announce plans to merge |
2010 | The merger is approved by regulators after agreeing to license ticketing software and divest some assets |
2016 | The Justice Department begins reviewing complaints about the merger |
2018 | Live Nation is issued a subpoena by the DOJ regarding possible antitrust practices |
2022 | Concerns grow over high Taylor Swift tour ticket prices and dynamic pricing |
2023 | Members of Congress announce a Senate antitrust panel will investigate Live Nation and Ticketmaster |
Recent Developments
Taylor Swift Tour Outcry
In November 2022, outrage over ticket prices for Taylor Swift’s upcoming tour sparked renewed interest in investigating Ticketmaster. Fans complained of presale tickets selling out instantly and appearing on resale sites at huge markups. Dynamic pricing also led to some tickets costing over $2,000 each. The frenzy revealed flaws in Ticketmaster’s sales system and led some fans to call for better consumer protections.
BOTS Act
In response to the Taylor Swift fiasco, Senators Richard Blumenthal and Marsha Blackburn announced plans to introduce the Better Oversight of Tickets and Seating (BOTS) Act. This bill would prohibit the use of software bots to buy up bulk event tickets. Bots allow ticket brokers to quickly purchase large quantities of tickets, making it harder for regular consumers to get tickets at face value. The BOTS Act aims to crack down on this practice.
Senate Judiciary Hearing
In January 2023, the Senate Judiciary Committee held a hearing to investigate competition in the ticketing industry. Senators questioned Ticketmaster executives on the Taylor Swift onsale, market power, and high fees. Ticketmaster defended their practices and insisted the market was competitive. However, senators cited many consumer complaints and said further oversight is needed.
Investigation Process
The Senate antitrust panel investigating Ticketmaster will go through the following general process:
Information Gathering
The panel will start by gathering information through hearings, testimony, subpoenas of company records, market research reports, and consulting experts. This will help them understand industry practices and competitive dynamics.
Assessing Competition
They will analyze Ticketmaster and Live Nation’s market share across various live event segments – concerts, sports, theater, etc. This will show if they hold an unreasonably dominant position.
Reviewing Vertical Integration
The panel will look at how Live Nation promoting events and Ticketmaster selling the tickets allows them to advantage their own platforms over competitors.
Evaluating Remedies
Based on their findings, the panel will consider what potential remedies could increase competition and benefit consumers. This could include structural separation of Ticketmaster and Live Nation or other consumer protections.
Issuing Recommendations
Finally, the panel will issue recommendations on any further actions that Congress, the DOJ, FTC, or other regulators should take regarding Ticketmaster and Live Nation’s practices.
Potential Outcomes
Here are some possible outcomes that could come from the Senate investigation:
No Action
The panel may determine no further action is needed beyond urging Ticketmaster to improve sales systems and lower fees.
DOJ Antitrust Lawsuit
The Justice Department could be prompted to file an antitrust lawsuit seeking to undo or modify terms of the Ticketmaster-Live Nation merger.
Vertical Separation
Regulators could mandate Ticketmaster divest Live Nation or impose internal controls to limit conflicts of interest between the promotion and ticketing arms.
Fee Caps
Legislation could be passed to put caps on ticket fees or mandate more fee transparency.
BOTS Act Passage
Congress may pass the BOTS Act or other bills to prohibit bulk ticket buying bots and regulate the secondary market.
Key Arguments
Criticisms of Ticketmaster
Here are some key criticisms regulators have of Ticketmaster’s practices:
– Excessive and opaque fees that can comprise over 30% of ticket cost
– Lack of fee disclosures and consistency
– Limiting supply during presales and onsales to increase scarcity value
– Primary market monopoly leads to high barriers for competitors
– Vertical integration creates conflicts of interest in pricing and promotions
Ticketmaster’s Defenses
Ticketmaster makes the following arguments to defend their business:
– Fees are needed to cover costs of running ticketing platforms and promotions
– Artists and venues choose Ticketmaster for their services and set ticket face prices
– They do not have an illegal monopoly and face competition from AEG, SeatGeek, StubHub, and others
– Vertical integration creates efficiencies that benefit consumers
– Dynamic and surge pricing help allocate scarce tickets better than fixed pricing
Conclusion
The Senate investigation into Live Nation and Ticketmaster aims to address rising consumer discontent over high ticket service fees and lack of primary ticket competition. Though Ticketmaster defends their fees and market position, senators believe a thorough review of industry practices is warranted. Depending on their findings, regulators may take antitrust action or implement new consumer protection laws regarding ticket sales. With public scrutiny growing, the Senate panel hopes to determine if further oversight of the live event ticketing market is needed to improve consumer rights and access. Their findings will shape the future of how major concerts, shows, and sports are sold to the public.