Article Summary: Is Live Music Broken – It’s Not Just Ticketmaster; It’s Everything.

Recommendation

In the 1970s, Ticketmaster computerized its operations to gain first-mover benefits and market share. Since then, following its growth strategy, Ticketmaster has bought up its rivals in its effort to control the live-event industry from venues to promotions to tickets. Writing for The Ringer, arts and entertainment journalist Nate Rogers lays out the perils artists face in a one-corporation market and probes potential fixes to keep live music vital. Ticketmaster/Live Nation’s near monopoly of live events helps superstars succeed, but, Rogers reports, other artists can’t make a living. Anti-trust experts worry about similar consolidation in other sectors.

Take-Aways

• By the mid-1990s, online ticket seller Ticketmaster controlled 90% of live event ticketing. Its control of the market has expanded.
• Ticketmaster had one job for Taylor Swift’s tour: selling tickets to her fans in an orderly way. It failed spectacularly.
• The business landscape for musicians stifles new acts.
• Ticketmaster’s monopoly in the US music industry affects other sectors as well.

Summary

By the mid-1990s, online ticket seller Ticketmaster controlled 90% of live event ticketing. Its control of the market has expanded

In 1994, the rock band Pearl Jam filed an antitrust complaint against Ticketmaster in an attempt to cap the additional fees the seller added to event prices. Fees then typically ranged from $4 to $8 for each ticket sold. Pearl Jam wanted to cap those fees at $1.80. The band testified before Congress about Ticketmaster’s unfair business practices and, for a brief moment, the Department of Justice considered acting against Ticketmaster’s apparently monopolistic behavior. Nothing came of that moment. Pearl Jam tried to tour without Ticketmaster, but eventually had to deal with the company. Ticketmaster’s exclusive deals with concert venues prevented the band from booking a tour without it.

Ticketmaster acquired its direct competitor Ticketron in 1991. In 2010, it merged with Live Nation, a company that owned and operated event venues across the United States. The US Department of Justice approved the merger, even though experts said the resulting company resembled a vertical monopoly. Ticketmaster/Live Nation controlled the live-event market from venue to promotion to tickets to pricing. The company sold tickets for the worst seats – secondary market tickets, the province of scalpers – for hundreds of dollars at nearly sold-out shows, tacking on another hundred in service fees.

Ticketmaster had one job for Taylor Swift’s tour: selling tickets to her fans in an orderly way. It failed spectacularly.

In 2023, Congress investigated Ticketmaster’s business practices. This time, the main complaint came from pop superstar Taylor Swift, whose fans suffered long waits and sudden lockouts when they tried to buy presale tickets to her upcoming “Eras” tour. Ticketmaster claims its website crashed due to larger than expected demand, which Ticketmaster partially blamed on bot attacks. Critics argue the failure sprang from the company’s monopoly power. Without competition, Ticketmaster has little incentive to update systems or please customers. Ticketmaster/Live Nation’s rival, AEG Presents, promoted Swift’s tour, but it had to deal with Ticketmaster for access to most venues.

“Krista Brown, a policy analyst…cited the company’s embrace of the previously taboo secondary market, the control of a baffling number of venues and ballooning service fees as having led to ‘a near-extortion ring’.”

Ticketmaster does not set ticket prices. The promoter and the artist establish that cost. Ticketmaster splits fees between the ticket issuer, the event venue, the event promoter and, in some cases, the artist. Generally, Ticketmaster is the face of ticketing and absorbs all the animosity fans feel about high prices and fees. The company recently incorporated dynamic pricing, under which ticket prices increase, sometimes outlandishly, when market demand surges. Supposedly this system prevents scalping. Higher sales get split along the same percentages as regular sales. A lot of money is at stake. As of December 2022, Live Nation reported quarterly revenues of $6.2 billion.

The business landscape for musicians stifles new acts.

While Taylor Swift’s high-priced shows sell out, mid-level band events often perform in half-empty halls. Jay Marciano, CEO of AEG Presents, blames a lessening of the initial post-pandemic surge in demand. When there is an excess supply of musical acts, less-famous artists lose out. But many artists blame a convergence of obstacles — inflation, lingering COVID worries and problems with supply chains — that conspire to squeeze up-and-coming bands financially, Bands touring today are lucky to break even. Album promotion and media coverage demand strategy and marketing support, which only more successful artists can afford.

“In 2020, just 39% of active artists — those who released more than 10 tracks and garnered more than 1,000 monthly listeners at some point in the year — on Spotify made more than $1000.”

Touring is no longer a reliable avenue for income; streaming reduced bands’ earnings from online sales. Some experts believe “a legitimate middle class for artists” no longer exists. In the United Kingdom, the number of “working-class creatives” has decreased by 50% since the 1970s.

Ticketmaster’s monopoly in the US music industry affects other sectors as well.

United States Senator Amy Klobuchar charges that monopoly power is responsible for rising prices in many economic sectors including agriculture, healthcare and shipping. Monopolies in the tech sector enable it to remain unconcerned about customer privacy.

“What if the main reason pop stars have been held up in the digital era isn’t a conscious intellectual choice and instead is the increasing power imbalance in the music industry and country at large?”

An anti-rock “poptimism” characterized the music landscape in the early 2000s. Poptimism arrived as the Internet overtook traditional media outlets. Online providers cared more about clicks that led to dollars than they cared about artistic critiques. This created a loop of streaming services promoting the same popular music. Some believe this homogenizing effect has led to more bad music. Others say the low cost of adding new songs to streaming playlists means listeners don’t invest the same time and money in critical appreciation as they once did. However, a lower technical barrier to entry means more artists can produce more music.

Instead of trust-busting, some experts believe Congress could fix the worst problems related to Ticketmaster by limiting its service fees and prohibiting scalping. The Department of Justice under the Biden administration is more aggressive against monopolies, so it might crack down on Ticketmaster/Live Nation. If it did so, that would mark a sea change in governmental oversight at a time when mergers and acquisitions define much of the US economy. Mergers tripled in the United States between 2009 and 2018. Only intervention could stop the trend.

[Editor’s note: Live Nation, Airbnb and other companies pledged that as of September 2023 they will display full prices and will be transparent about hidden fees. The pledge followed their executives’ meeting with President Joe Biden, who criticized “junk fees” and proposed laws to limit them.]

About the Author

Nate Rogers is a freelance journalist covering arts and entertainment.