There is a recent congressional hearing on Ticketmaster due to concerns over its dominance in the primary ticket sales market and allegations of anticompetitive practices. Ticketmaster is the largest primary ticket provider in the United States and sells tickets for many major concerts, sports events, and more. However, some are accusing Ticketmaster of monopolistic behavior that harms consumers and competitors.
What are the main concerns about Ticketmaster?
Here are some of the major concerns that have prompted the congressional hearing:
- Monopoly power – Ticketmaster has an extremely high market share of over 80% in primary event ticket sales. This sheer dominance gives it monopolistic power.
- High fees – Customers complain of exorbitant fees tacked onto ticket prices by Ticketmaster often with no transparency or choice.
- Price floors – Ticketmaster has been accused of implementing ticket price floors that prevent venues and competitors from selling tickets for lower prices.
- Locking out competitors – Critics say Ticketmaster’s exclusive contracts with major venues lock out competitors and exploit captive audiences.
- Acquisitions of rivals – Ticketmaster’s parent company Live Nation has been accused of systematically acquiring competing ticketing companies.
- Anti-consumer restrictions – Contracts with restrictive terms prevent venues and artists from using competitor ticket sellers.
Essentially, Ticketmaster is being accused of monopolistic practices that eliminate competition in the market, allowing it to charge higher fees and worsen service without consequences. The lack of consumer choice, high prices, and other harms are raising the ire of regulators and consumers alike.
What evidence is there of Ticketmaster’s dominance and antitcompetitive practices?
There is extensive evidence demonstrating Ticketmaster’s overwhelming market dominance and anticompetitive practices:
- 80-90% market share – Ticketmaster sells 80-90% of all major event tickets, dwarfing all competitors. Its Live Nation subsidiary also owns many major venues.
- Steadily increasing fees – Ticketmaster’s convenience and processing fees have risen steadily over the years, far outpacing inflation.
- Price floors in contracts – Leaked data shows Ticketmaster enforces price floors in contracts preventing venues from discounting tickets.
- Reselling owned tickets – Ticketmaster owns resale sites like GetMeIn and has been accused of shifting inventory to resell at higher prices.
- Buying up competitors – Since 2010, Ticketmaster has acquired companies like Front Line Management, Universe, Ticketweb, and more.
- Exclusive venue deals – Many major venues like arenas sign exclusive ticketing deals with Ticketmaster.
This mountain of evidence from market share data, fee structures, contract terms, acquisitions, and exclusivity agreements shows Ticketmaster’s dominance and potentially anticompetitive practices.
What are some of the major past controversies and lawsuits against Ticketmaster?
Ticketmaster has been embroiled in various controversies and lawsuits over its history alleging monopolistic and wrongful behavior:
- Pearl Jam lawsuit – In 1994, the band sued Ticketmaster for antitrust violations for its exclusive deals with venues. They sought to use a different ticketer.
- Grateful Dead lawsuit – In 1994, the band also sued Ticketmaster on antitrust grounds for its exclusive contracts.
- String Cheese Incident lawsuit – In 2001, the band sued Ticketmaster after it refused to work with the band’s chosen ticketing firm.
- UPS lawsuit – In 2009, UPS sued Ticketmaster for infringing on its patented event ticketing technology methods.
- Member of Congress investigation – In 2009, Bruce Springsteen fans complained to their Congressman about high Ticketmaster fees, prompting an investigation.
While Ticketmaster has managed to prevail legally in past lawsuits, they shed light on longstanding grievances and legal allegations against its business practices.
What are the key arguments on both sides of the Ticketmaster debate?
There are two main sides in the Ticketmaster debate:
Against Ticketmaster:
- Monopolistic power harms consumers through higher prices and fees.
- Abuse of market dominance locks out competitors unfairly.
- Exclusive contracts exploit captive audiences and venues.
- Lack of transparency and choice for consumers is wrong.
- Consolidating rival ticketing companies is detrimental to competition.
Defending Ticketmaster:
- Provides a convenient ticketing service people choose to utilize.
- Has invested heavily in ticketing technology and infrastructure most competitors cannot match.
- Exclusive venue contracts align incentives and provide consumer benefits like integrated event management.
- Acquisitions of rivals were done legally and passed antitrust scrutiny.
- Fees allow investment in R&D to improve ticketing.
Essentially, critics condemn Ticketmaster for monopolistic rent-seeking while defenders claim they provide the best ticketing product through scale and innovation.
How much market share does Ticketmaster currently have?
Ticketmaster currently has an enormous market share in primary event ticketing sales:
- Overall market share is 70-80% in North America across all live entertainment events.
- For major live music events, its market share is 80-90%.
- For top venues with over 10,000 seats, it has over 70% ticket sales market share.
- In 2010, it sold over 500 million tickets accounting for 75% of major concert sales.
This gives Ticketmaster a dominant position, with its next largest competitor Eventbrite having only about 10% market share. No other company has managed to garner over a 5-10% market share of major event tickets.
Does Ticketmaster stifle competition in the ticket sales market?
There are reasonable concerns from critics that Ticketmaster engages in anticompetitive practices that stifle competition:
- Exclusive contracts lock out rival primary ticketing platforms from venues.
- It has systematically acquired smaller competing ticketing companies over the years like Ticketweb.
- Price floors in contracts may prohibit venues from selling discounted tickets elsewhere.
- It blocks artists from using other ticket services through far-reaching
contracts. - Lawsuits allege it leverages its platform dominance to coerce venues and freeze out rivals.
However, Ticketmaster contends that fair and legal competition results in their triumph based on the quality of their ticketing services. But critics say Ticketmaster’s entrenched position means new entrants cannot fairly compete.
How has Ticketmaster responded to the latest allegations and hearing?
Ticketmaster has denied engaging in any anticompetitive behavior and defended its practices in response to the latest congressional hearing:
- Claims it offers fair value and tickets priced based on consumer demand.
- Notes competitors like Eventbrite, SeatGeek, AXS are not locked out from expanding.
- Says its service fees cover costs of running ticketing operations.
- Argues exclusive venue contracts allow them to integrate services and improve consumer experience.
- Denies accusations of shifting ticket inventory between primary and resale sites.
Ticketmaster asserts that allegations are unfounded, and its success is due to billions invested in R&D that competitors have not replicated. It claims to provide the best service fans and venues desire.
What potential antitrust actions could be taken against Ticketmaster?
If investigations conclude Ticketmaster is unfairly stifling competition, possible antitrust actions could include:
- Forced divestiture and breakup of Ticketmaster into smaller companies.
- Prohibiting future acquisitions of competitors.
- Banning exclusive ticketing contracts with venues.
- Price controls regulating the types and amounts of fees.
- Requiring Ticketmaster to license ticketing software to rivals.
- Invalidating anticompetitive contract terms with venues and promoters.
- Implementing consumer protections on refunds, disclosures, etc.
However, drastic measures like breaking up Ticketmaster would likely face legal challenges weighing consumer benefits. Fines, opening access to ticketing platforms, regulating fees, and banning anticompetitive contracts seem like more feasible options currently.
What are the chances regulators will pursue antitrust action against Ticketmaster?
The likelihood of regulators pursuing meaningful antitrust enforcement action against Ticketmaster currently appears moderate:
- Past lawsuits failed to make significant dents in Ticketmaster’s dominance.
- However, ongoing public and government scrutiny could build momentum for action.
- Some form of concessions regarding exclusivity deals seems possible.
- But breaking up or heavily regulating Ticketmaster faces an uphill legal battle.
- Much may depend on the findings of the Justice Department’s investigation launched in 2019.
Despite public outcry, regulators so far have taken little concrete action beyond hearings and requests for information. Transformational antitrust action remains uncertain without clear evidence of consumer harm.
How might more competition in the ticketing industry impact consumers?
If regulators opened up the ticketing industry to more competition, it could potentially benefit consumers in the following ways:
- Lower convenience and processing fees with more choices.
- Reduced ticket prices if venues can sell directly at lower price floors.
- More innovation if upstarts can challenge Ticketmaster.
- Better customer service to retain and attract consumers.
- More transparent disclosure of added-on fees.
- Wider accessibility and distribution of tickets to events.
However, it is unclear if competitors could replicate Ticketmaster’s technology and integrated services for venues. There is also no guarantee increased competition would transform the high costs and inconveniences inherent in major event ticketing. But it could be a start towards improving consumer experiences.
Conclusion
Ticketmaster’s dominance over primary event ticket sales in the U.S. has long sparked antitrust concerns. But past attempts at lawsuits and regulation have so far failed to make much headway. Ongoing public scrutiny and Congressional hearings suggest another examination into allegations of monopolistic behavior and the impacts on consumers. If meaningful competitive violations can be substantiated, antitrust regulators have various tools to potentially increase competition in the market. However, aggressive enforcement still faces challenges. Increased access for competitive upstarts and prohibiting anticompetitive contracts seem the most pragmatic initial measures. Their impacts on prices, fees, transparency, innovation, and accessibility could deliver tangible consumer benefits. But ultimately, unraveling decades of entrenched industry practices remains an uphill battle despite the calls for change.