Ticketmaster: A Lesson In Monopolies And Moral Bankruptcy
Source : Kevin Mazur, Getty Images (Taylor Swift performing onstage during iHeartRadio’s Z100 Jingle Ball 2019 Presented By Capital One on December 13, 2019 in New York City.)
There’s no denying that Taylor Swift has one of the most dedicated fan bases in the history of music. As such, it comes as no surprise that her fans were scrambling to get tickets to the Eras Tour, the iconic singer’s first tour in four years. Like many artists, Swift’s team decided to promote the event with Live Nation, who, since 2010, has been in a merger with ticketing colossus Ticketmaster. The aforementioned organized the artist presale, which, as many of us know, did not go according to plan. More people had entered the presale than there were tickets available and two million tickets were sold on that day alone, making it the highest number of tickets sold for an artist in a single day. The website glitched and lagged, leading to hours-long waits and people getting kicked out of the queue.
Jenna Brender, a second-year Dawson student, was lucky enough to obtain tickets to Taylor Swift’s Eras Tour. She was unable to enter the presale, which led to her resorting to the secondary ticketing service StubHub, a platform commonly used by scalpers. She recounts her experience in an interview: “As soon as the presale started, resellers started reselling. I don’t think I saw a single ticket under four digits, even in the very back rows. Everyone was caught off-guard. I was with my mom at the time, refreshing and refreshing the page but the prices kept getting higher and higher. We saw front-row tickets at almost a hundred thousand dollars, it was crazy. A lot of tickets were available on the website, but the prices weren’t accessible to most people, which is ridiculous. We decided to just do it before the prices got any higher than they already were.” When asked about her reaction to the backlash against Ticketmaster, Brender responded: “I thought immediately that something was going to have to be done legally because I don’t think this has happened before. A lot of heads turned to Taylor to make a response but it really was out of her control. I don’t really know what can be done, since the tickets are now sold out.”
Understandably, fans were outraged and demanded a response from Ticketmaster, who blamed the catastrophe on bot accounts — also known as scalpers — who normally shouldn’t have even been able to join the presale to begin with. Indeed, the whole point of an artist presale is to prevent scalpers from infiltrating ticket sales and scooping up large amounts of tickets only to resell them to fans at exorbitant prices. To access an artist presale, a fan must first register, usually to the artist’s newsletter, and from there wait to get sent a presale code. The registration process guarantees that whoever is getting a presale code is a real person and that they cannot use the code to purchase an obscene amount of tickets. This begs the question: Who was really getting the tickets: Swifties or scalpers?
Way back in July 2018, journalists from the Toronto Star infiltrated the Las Vegas Ticket Summit by posing as scalpers. At the summit, these enterprising journalists discovered Ticketmaster’s booth, where the company was promoting software programs that scalpers use to create the bots that buy tickets by the hundreds. The reason scalpers need these softwares is to bypass security systems, such as Ticketmaster’s individual purchasing limit that dictates the maximum number of tickets one can buy for a single show. The journalists even filmed a Ticketmaster executive at the booth speaking of a scalper he knew of that had over 200 Ticketmaster accounts, adding that it was pretty much a given that every scalper has more than one account.
Despite openly denouncing scalpers and bots for snatching tickets from fans, Ticketmaster seems to be enthusiastic about helping them behind closed doors. This is because the company benefits from resales due to the processing and service fees that Ticketmaster charges for each transaction. Not only are they making money from the first sale to the scalper, but they’re making even more money after reselling it since the price of processing and service varies according to the price of the ticket. Knowing this, it is not surprising that Ticketmaster would want to facilitate mass scalping. This is a mutual occurrence since scalpers gravitate towards Ticketmaster due to its dominance in the market.
However, these fees are not the only way Ticketmaster makes their cash. In fact, there are two other ways in which they snatch as much money as they can. Firstly, price hiking of tickets occurs mid-sale, an increase not indicated to the buyer, which prevents them from recognizing whether or not they’re getting a good deal. Additionally, not all tickets are immediately put on sale for a given event in order to hike the price and create the false illusion of high demand. These seemingly small actions have had huge consequences since Ticketmaster’s 2022 third-quarter revenues peaked at 6.2 billion dollars, a 66.8% increase since 2019. It seems as though not even the pandemic’s lockdowns were enough to dissuade Ticketmaster.
The question that many have been asking themselves since the Taylor Swift controversy occurred is: How could this be allowed to happen? Quite easily, actually. As previously mentioned, in 2010, the Department of Justice approved the merger between Ticketmaster and Live Nation. What exactly is a merger, though? Simply put, it is the fusion of two companies, creating a new entity, which allows both companies to continue existing and working together towards the same goal. This is different from an acquisition, in which a company purchases another, leaving only the purchasing company in operation. Live Nation and Ticketmaster operate in complementary fields: event promotion and primary ticketing respectively. Both companies have rarely had to face any proper competition, which makes their merger advantageous for them but concerning for consumers.
Knowing this, many have called out Ticketmaster and Live Nation for being monopolies and for violating antitrust laws. A notorious case that some might know of is Pearl Jam’s infamous 1995 lawsuit against Ticketmaster. At the time, the company ticketed eighty of the United States’s top one hundred venues, which Pearl Jam had vowed to avoid like the plague for their 1994 tour precisely because of absurd ticket prices that the band attributed to the company’s being a monopoly. Unfortunately, their lawsuit failed.
Live Nation, though a more recent company, has also dominated the event promotion market for over a decade. At the time of the merger, concerns were raised over the possibility of decreasing competition, which would skyrocket the price of tickets. In 2023, we know now that their warnings have become a reality. Because of Live Nation’s merger with Ticketmaster, the entire independent concert promotion market is threatened. Not only that but Live Nation has also been known to employ aggressive tactics such as keeping shows from venues that refuse to sell tickets through Ticketmaster. This is in direct violation of antitrust laws. The two companies are estimated to control 60% of the live entertainment industry.
With all this information coming to light, it comes as no surprise that an investigation is in order. United States Senators Richard Blumenthal, Amy Klobuchar, and Edward J. Markey of Connecticut, Minnesota, and Massachusetts respectively, have filed for the Department of Justice to investigate not only Ticketmaster and Live Nation, but the entire online ticketing industry. In their letter to the U. S. Attorney General, they wrote: “Without significant market competition, Ticketmaster and other primary ticket providers continue to charge high fees to consumers… Concerts, sports and other events offer an important respite to Americans’ busy lives, foster shared memories and contribute greatly to America’s social fabric. Yet, the ticketing industry is broken.” The outlook for this investigation is hopeful, as the Department of Justice is known not to shy away from filing antitrust lawsuits against monopolies, as evidenced in the ongoing December 2020 lawsuit against Google. There has been talk among U.S. senators to break up the merger between Live Nation and Ticketmaster.