By: Mark Perry | Scholar, The American Enterprise Institute
When Live Nation and Ticketmaster merged in 2010, many feared that the new giant would use its dominant position in the concert touring business to pressure venues into contracting with Ticketmaster, which now controls 80 percent of ticket sales at the nation’s largest venues. Those fears came true — Live Nation Entertainment has since systematically and strategically attempted to control the entire ticket supply chain and the prices consumers pay.
The Department of Justice (DOJ) sought to limit the company’s attempts to bully venues seeking Live Nation music talent to use Ticketmaster for ticketing through conditions included in the merger approval consent decree. Christine Varney, the then-Assistant Attorney General for Antitrust, stated in 2008 that the DOJ was concerned that “the merger posed a threat to growing competition in primary ticketing” and that “it was this substantial lessening of competition that we concluded violated the antitrust laws.” Sadly, in the decade since the world’s largest ticketing company combined with the world’s largest concert promoter, tickets have become increasingly more expensive, more difficult for fans to access, and more difficult for fans to resell.
In December 2019, the DOJ reported that Live Nation has “repeatedly and over the course of several years engaged in conduct that….violated the Final Judgment” that was supposed to “prohibit the company from retaliating against concert venues for using another ticketing company, threatening concert venues, or undertaking other specified actions against concert venues for ten years.”
The DOJ responded by extending the settlement five years, imposing $1 million fines for each future violation, and appointing an independent monitor. But even these measures don’t go far enough to protect music fans.
The live music and ticketing markets have evolved over the last decade. Measures taken to curb anti-competitive practices in 2010 no longer apply. Today, Live Nation Entertainment controls virtually all of the “primary” consumer ticket market, where tickets are initially put on sale, and is taking steps to crush competition in the “secondary” ticket resale market too. New technologies empower Ticketmaster to stifle its competition and control consumer behavior that go well beyond the activities that DOJ sought to constrain in 2010. These anti-competitive strategies begin before tickets go on sale and extend through the day of the event.
For example, Ticketmaster creates artificial market conditions by secretly holding tickets back from sale to the public. In some cases, half of the seats to an event are sold by “slow ticketing,” where tickets are gradually released to create a buying frenzy at higher prices. Ticketmaster executives call this program “Verified Fan” and claim it prevents fraud and attacks by illegal software bots, yet they admit it has resulted in more profit and less competition from other ticket sellers.
It is shameful to allow fans to access a seat map when tickets go on sale showing only a few tickets available for purchase when in reality there is a huge hidden inventory of tickets released to the market slowly. This deceptive, artificially generated scarcity should be outlawed or otherwise strictly regulated. However, the company has invested millions to develop this mousetrap, “innovation” that it won’t so easily allow lawmakers or regulators to reign-in. Two summers ago, Live Nation lobbied New Jersey lawmakers to rescind a longtime consumer protection law that prohibited venues from holding back more than five percent of tickets.
Separately, Ticketmaster’s new “SafeTix” app-based technology generates a new barcode every 15 seconds, making the electronic tickets usable only if the customer bought it from Ticketmaster and uses a Ticketmaster app. “SafeTix” is a blatant attempt to undermine the competition from secondary markets that have proved extremely valuable to consumers, where consumers often find better, supply-and-demand driven prices. Because of SafeTix, some fans who purchased valid tickets from other sellers have been stranded outside of their shows. And these are not fake or counterfeit tickets but are real tickets bought from Ticketmaster and then resold on the secondary market.
All of these anti-competitive actions are violating free-market principles and harming consumers. As a direct result of the merger, consumers have increasingly been at the mercy of a single company for access to tickets. If lawmakers only focus on the secondary resale market at their congressional hearing this week, they will miss the bigger picture of anti-competitive practices.
What we need now is a new and aggressive approach that will protect a fundamental principle: the ability of ticketholders to freely transfer, give away, or resell their tickets. The evidence clearly shows that the more Ticketmaster uses its powerful position to curtail competition and ticket transferability, fan access to tickets goes down and the prices go up.
Some states have passed laws to protect the rights of fans to transfer tickets, making Ticketmaster’s anti-competitive practices illegal. Other states, like Indiana, have attempted to pass similar laws but met strong resistance from Ticketmaster’s lobbyists. In place of a patchwork of state laws, a federal standard would be a much better approach
Until the current anti-competitive monopolistic behaviors of the merged companies are curtailed, new technologies will continue to emerge that will further increase frustration and ticket prices for fans. The BOSS Act currently being considered by Congress contains much of what is needed to safeguard consumers, protect market competition, and prevent a total market takeover by Live Nation-Ticketmaster.