Ticketmaster, the largest ticket sales and distribution company in the United States, has recently come under scrutiny from Congress for their business practices. Specifically, Congress is investigating Ticketmaster’s dominance in the industry and their potentially anti-competitive policies.
Ticketmaster’s Market Dominance
Ticketmaster sells tickets for concerts, sports events, theater shows, and more. They are the market leader in ticket sales, estimated to have 70-80% market share of major event ticket sales in the US. They sell tickets through their website, mobile apps, and retail outlets.
In 2010, Ticketmaster merged with Live Nation, the largest concert and event promoter in the US. This merger essentially created a vertically integrated company that controlled nearly every aspect of the live event business – from artists and venues to promotions and ticket sales. Critics argued this would give the merged company too much power in the industry. However, the merger was ultimately approved by regulators.
Since then, Ticketmaster has maintained its dominant position in ticket sales. They have exclusivity agreements with many major venues and artists that give them sole control over all ticket sales and distributions. This locks out competitors and makes it very difficult for consumers to purchase tickets anywhere except directly through Ticketmaster.
Service Fees and Other Charges
A major complaint against Ticketmaster is their excessive services fees and other charges added onto ticket prices. Ticketmaster’s fees are typically 25-30% the base ticket price, but can sometimes be as high as 50%.
These fees include:
– Convenience charges – Just for the service of buying a ticket online or by phone
– Order processing fees
– Facility charges and other venue fees
– Shipping and will-call fees
– Dynamic pricing – Raising prices for high demand events
Ticketmaster claims these fees cover their costs and provide a better ticket buying experience. However, many see these fees as excessive and anti-consumer. Some believe Ticketmaster intentionally uses fees to make base ticket prices look lower and then tack on high charges later in the checkout process.
Anti-Competitive Practices
Since Ticketmaster dominates the primary ticket selling market, many complain they use anti-competitive practices to block and suppress competitors. Some of their alleged anti-competitive practices include:
– **Exclusive deals** – Long-term exclusivity deals with major venues and artists to be the sole seller of their tickets. This blocks competitors from selling those tickets.
– **Restricting ticket transfers** – Placing strict limits on ticket resales and transfers, often requiring tickets be resold only through Ticketmaster’s own resale platform. This takes away revenue opportunities from competitors.
– **Captive ticketing agreements** – Forcing venues to use Ticketmaster for all shows, including shows not promoted by Live Nation.
– **Threats** – Retaliating against venues that choose to use other ticket companies by refusing to let them host Live Nation events.
– **Locking out competitors from essential data** – Not sharing essential ticket data with competitors that they need to integrate their platforms.
Congressional Investigation
These longstanding complaints against Ticketmaster finally boiled over recently when Ticketmaster’s site crashed during a presale event for Taylor Swift’s upcoming stadium tour. Millions of fans were unable to purchase tickets, many after waiting in online queues for hours.
In the aftermath, Ticketmaster blamed the issues on unprecedented demand and bots. But many saw it as yet another example of Ticketmaster’s failures.
In November 2022, the U.S. Senate Judiciary Committee held a hearing examining Ticketmaster’s practices. Senators from both parties grilled Ticketmaster executives on their fees, site failures, and anti-competitive conduct.
Congress is considering legislation to crack down on Ticketmaster, including:
– **The BOSS Act** – Would prohibit Ticketmaster from requiring venues use them exclusively for all events.
– **BOTS Act** – Would crack down on ticket bot use. Ticketmaster blames bots for their technical issues.
– **Other antitrust actions** – Potentially breaking up the Ticketmaster-LiveNation merger or opening up more of Ticketmaster’s data to competitors.
Ticketmaster’s Defense
Ticketmaster has defended itself against many of these allegations:
– They say their dominance is due to superior technology and providing the best service, not anti-competitive practices. They’ve invested heavily in products to benefit fans and venues.
– Their fees are justified costs of providing cutting-edge services and security. Things like digital ticketing services and anti-bot protections are expensive to develop and maintain.
– Exclusive deals are mutually agreed upon and benefit artists and venues through higher revenue and better support.
– They do not actually have an outright monopoly, as competitors like AXS, SeatGeek, and Eventbrite still have decent market share in some areas and venues.
It remains to be seen if Ticketmaster’s defense will hold up against further congressional scrutiny. They are attempting to make some reforms, like exploring “all-in” ticket pricing with fees disclosed upfront. But lawmakers and consumer groups continue applying pressure for more change.
Conclusion
Ticketmaster’s dominance of the ticket industry, coupled with their unpopular fees and service issues, has clearly invited greater scrutiny from consumers, artists, and policymakers. Their tight grip on so many aspects of the live event business raises legitimate competition concerns that Congress appears determined to address through legislation and oversight.
With many top artists and venues locked into exclusive deals with Ticketmaster, their dominance seems unlikely to disappear entirely. However, increased competition and regulation of their most egregious practices could help improve the situation for consumers and live events as a whole. It may take significant antitrust enforcement action to weaken Ticketmaster’s hold on the industry substantially. For now, further congressional probes and policy reforms seem imminent as public frustration with Ticketmaster’s practices continues to grow.