Ticketmaster: The Public Enemy
It was certainly exciting when Taylor Swift announced her first tour in five years, following the release of her newest album Midnights. Her team announced several tiers of presales for fans through Ticketmaster’s Verified Fan Program.[1] The program is designed to give ticket priority to actual fans over bots that break into the system.[2] However, when the time came, millions of people waited for hours in the “queue” only to get booted out of the site when it glitched, or see the tickets they selected disappear from their carts.[3] Adding insult to injury, resellers began to list tickets on their websites for over $20,000.[4] Ticketmaster cancelled its planned public sale that was supposed to begin after the Verified Fan presale, citing “extraordinarily high demands on ticketing systems and insufficient remaining ticket inventory to meet that demand.”[5]
Ticketmaster said that it received 3.5 billion system requests that day, and that 2.4 million people got tickets.[6] The chairman of Live Nation Entertainment, Greg Maffei, said that Swift could have “filled 900 stadiums.”[7] In a vague statement, Swift called the situation “excruciating” and seemingly put the blame on Ticketmaster for the botched sales process.[8] Swifties and politicians alike began calling for a breakup of the 2010 merger between Ticketmaster and Live Nation.[9] The merger gave Ticketmaster a virtual monopoly over concert-goers, artists, and the venues where they play because of lack of competition in the industry and the exclusivity contracts the company holds with artists and venues.[10]
Back in 2010, Ticketmaster, who already held seventy percent of the concert ticket market, merged with Live Nation, who had bought up regional concert promoters.[11] The new company was named Live Nation Entertainment, and the merger was cleared by the Justice Department even amidst antitrust investigations.[12] The Justice Department required Ticketmaster to sell Paciolan, another ticketing company it had bought, and license its ticketing software to Anschutz Entertainment Group in the hopes that more competition would be created.[13] But the combination of the two most powerful entities in music meant that the sky was the limit when setting ticket fees, and that venue owners who chose not to use Ticketmaster would have a hard time booking tours.[14]
At the time of the merger, the DOJ put the company under a consent decree, which said that the company cannot retaliate against concert venues for opting into a different ticketing service.[15] But in 2019, the DOJ found that the company repeatedly engaged in conduct that violated the 2010 consent decree.[16] The two sides agreed to extend the decree five years modify the terms to “help deter additional violations and allow for easier detection and enforcement if future violations occur.”[17]
After the Taylor Swift fiasco, the Justice Department opened an antitrust investigation into the company, focusing on whether Live Nation Entertainment has abused its power in the industry.[18] The investigation supposedly predated the botched ticket sales.[19] During a Senate Judiciary hearing, senators on both sides of the aisle grilled Joe Berchtold, Live Nation Entertainment’s president and chief financial officer, over his claims that the industry is still competitive and that bots were to blame for the ticket failures.[20] Senators also made sure to include enough Taylor Swift lyrics in their statements to make everyone watching cringe, such as Senator Richard Blumenthal’s quote: “May I suggest, respectfully, Ticketmaster ought to look in the mirror and say, ‘I’m the problem, it’s me.”[21]
The Senate Judiciary hearings indicate that breaking up Live Nation Entertainment has bipartisan support, and that it could be a winning issue for politicians now that younger generations are so fired up about it.[22] Proposed new antitrust laws would make it easier for the DOJ to sue companies engaged in vertical mergers, which involve complementary services within the same industry, like how Live Nation Entertainment serves the roles of promoter, venue, and ticketing company.[23] Hopefully, positive change arises from this saga, and us consumers can benefit from fewer fees and shorter times spent in the queue.
Footnotes
