Is Ticketmaster a Monopoly?
Ticketmaster is without doubt one of the premier reserving and ticketing service suppliers for the humanities and leisure business. They energy ticket gross sales for venues similar to stadiums, performing arts facilities, and museums, with a worldwide attain. The corporate began in 1976 as a means for faculties to promote live performance tickets on campuses, however by 2022 the corporate has develop into a world powerhouse, and a de facto monopoly with regards to ticketing occasions. At the moment, Ticketmaster even controls the resale market, charging a service price for any tickets resold by non-public events by way of its platform.
Previous to the COVID19 pandemic, the corporate was promoting practically half-a-billion tickets worldwide. How did Ticketmaster develop to such dominance and why has this brought on issues for each event-goers and regulators? Learn on to see how.
- Ticketmaster (a part of Dwell Nation Leisure) is the world’s largest and most vital ticketing companies supplier on this planet.
- Ticketmaster turned the dominant participant within the ticketing and occasions area by incentivizing artists and venues, and shopping for up the competitors.
- The corporate earns cash by charging service charges on ticket gross sales, selling artists, and managing venues.
- Current controversies round ticket costs and platform glitches have sparked renewed calls to look at Ticketmaster’s standing as a monopoly.
A Temporary Historical past of Ticketmaster
In 1976, pc programmer Peter Gadwa and Albert Leffler, a field workplace specialist, began a small software program firm that licensed ticketing programs to stores and universities to promote paper tickets to event-goers. Ticketmaster would earn cash by promoting its programs to distributors in addition to a service cost to customers. In 1982, the corporate appointed Fred Rosen as CEO and the corporate established its headquarters in Los Angeles. On the time, the primary ticketing service in America was Ticketron, a subsidiary of Management Knowledge Corp., a legacy mainframe pc firm that went out of enterprise within the early Nineteen Nineties. By way of aggressive advertising and marketing and incentives paid to venues for counting on Ticketmaster, by the mid-Eighties the corporate overtook Ticketron and have become a serious participant with offers in additional than 90 cities across the U.S.
In 1993, Microsoft co-founder Paul Allen acquired 80% of Ticketmaster for greater than $325 million. By then, the corporate was producing greater than $1 billion in annual gross sales, accounting for greater than 52 million particular person tickets bought in a 12 months. Allen’s efforts helped remodel Ticketmaster from a easy ticketing firm into an info expertise firm to promote tickets on-line and never solely through bodily affiliate places.
In 1998, digital media big InterActive Corp. (IAC) bought a majority stake in Ticketmaster together with competitor CitySearch and mixed the 2 entities to type a complete on-line leisure information that additionally would promote live performance tickets and associated merchandise (word that IAC is the proprietor of Investopedia). IAC additionally made different purchases within the ticket-selling area similar to TicketWeb in 2000 together with a number of smaller gamers all through the 2000s earlier than spinning off Ticketmaster as its personal entity in 2008.
After the spin-off, Ticketmaster acquired Entrance Line Administration, a premier artists administration and illustration agency, inking unique rights to promote live performance tickets to Entrance Line expertise. This arrange a fierce rivalry between what was now Ticketmaster Leisure and Dwell Nation – the nation’s largest occasion promoter in the course of the 2000s, who was additionally planning to launch its personal proprietary ticketing facility.
This rivalry, nonetheless, ended only a 12 months later, in 2009, when the 2 firms introduced a merger, which was efficiently accomplished in 2010. The mixed firm, known as Dwell Nation Leisure subsequently grew and began to purchase up the competitors together with pageant ticketer Entrance Gate in 2015 and an organization known as UPGRADED that converts bodily tickets to digital, blockchain-based tokens in 2018.
On November 15, 2022, Ticketmaster made headlines when its ticketing platform crashed amid a pre-sale for Taylor Swift’s upcoming live performance tour, leaving many unable to go browsing and attempt to buy tickets. Clients and followers criticized Ticketmaster vocally for what they claimed was its flawed ticketing mannequin and monopolistic practices that led to this failure. Firm officers said that the system crash was resulting from an unprecedentedly excessive variety of folks trying to purchase Taylor Swift tickets on the similar time. Their declare, nonetheless, fell on deaf ears as ticket consumers and Swift’s followers continued to vent their anger and frustration on social media and different platforms, and calling for authorities to interrupt up the Ticketmaster monopoly.
This, nonetheless, was not Ticketmaster’s first brush with anti-competitiveness claims. In 1994, the choice rock band Pearl Jam sued Ticketmaster on anti-trust grounds, alleging that Ticketmaster, had purchased up all of its main rivals after which abused its market dominance by demanding excessive service charges and signing unique offers with main live performance venues, leaving customers and artists with no various. Ultimately, the U.S. Division of Justice dropped the case.
Whereas different allegations have been leveled prior to now, the Taylor Swift snafu appears to have gotten the eye of the Federal Authorities, with Senator Amy Klobuchar (D-Minnesota), who’s chair of the Senate antitrust subcommittee, demanding solutions. This, along with a newly fashioned coalition led by the American Financial Liberties Undertaking along side a number of fan-based organizations, is searching for to undo the Dwell Nation merger and break up the ticketing monopoly.
What Is Ticketmaster’s Market Share?
In line with insights from Yale College, Ticketmaster controls over 70% of the marketplace for ticketing and stay occasions (and over 80% for stay live shows), making it by far the business chief. Due to its persistent and dominant market place, there are issues that it could abuse its market energy and trigger hurt or unfair situations for purchasers.
Who Is Ticketmaster Owned By?
Ticketmaster is owned by Dwell Nation Leisure, which is a publicly-traded firm below the ticker image (LYV) on the New York Inventory Trade. As Dec. 2022, LYV had a market capitalization of over $17 billion.
How Does Ticketmaster Make Cash?
Ticketmaster and its dad or mum firm Dwell Nation Leisure makes cash by charging clients a service cost, which may be as excessive as 75% or extra of the bottom value of the ticket. These charges are cut up among the many venues, promoters, artists, and Ticketmaster itself. Ticketmaster additionally extracts charges from its resale market utility. As well as, the corporate’s Concert events and Festivals section earns cash from the worldwide promotion of stay music occasions in Dwell Nation owned or operated venues and in rented third-party venues, the operation and administration of music venues, the manufacturing of music festivals the world over, the creation of related content material and the supply of administration and different companies to artists. As a venue operator, Dwell Nation additionally generates income from the sale of concessions, parking, premium seating, rental revenue, and ticket rebates or service expenses earned on tickets bought by way of inside ticketing operations or by third events below ticketing agreements.
Does Ticketmaster Have Any Competitors?
Whereas Dwell Nation and Ticketmaster have a dominant place within the ticketing market, there are some rivals, however every of that are comparatively small and lack substantial market energy. Rivals may concentrate on different segments of ticketing slightly than mainstream live shows and sporting occasions. These embrace Eventbrite, Tickets.com, AXS, eTix, Seatgeak, Vivid Seats, and StubHub.
The Backside Line
Ticketmaster, a part of Dwell Nation Leisure, is the world’s largest ticketing companies firm. The corporate generates income from charges on ticket gross sales, in addition to artist promotion and venue administration. A number of criticisms have been directed towards the corporate because of its function within the consolidation of the stay occasions business, allegations that it engages in anti-competitive practices, and poor dealing with of the ticketing course of, particularly for extremely standard occasions. The newest incident, involving Taylor Swift’s newest live performance tour, has sparked elevated criticism and requires regulators to interrupt up the obvious monopoly that Ticketmaster at the moment enjoys.