After Ticketmaster’s systems crashed last November after opening sales for a spring 2023 Taylor Swift tour, thousands of Swift’s fans demanded action from Congress. In a lyric-laden hearing of the U.S. Senate’s Judiciary Committee on Feb. 25, lawmakers accused Ticketmaster and their parent company, Live Nation Entertainment, of holding a monopoly over ticketing and live music venues in the United States. Senators from both sides of the aisle made news by quoting Swift’s lyrics while questioning Live Nation Entertainment CFO Joe Berchtold.
“May I suggest, respectfully, that Ticketmaster ought to look in the mirror and say, ‘I’m the problem. It’s me,” quipped Sen. Richard Blumenthal of Connecticut, quoting Swift’s 2022 song “Anti-Hero.”
While these hearings had more chuckles than the antitrust hearings for Bell System or Amoco, live music is a $6 billion business in the United States. The way it operates impacts consumers in every congressional district, said David Barbe, director of the Music Business Program at the Terry College of Business.
While it’s not clear if the trust-busting rhetoric will change the music business, it’s worth understanding what the stakes are for fans, artists and promoters alike.
Why did Taylor Swift’s disastrous ticket rollout grab the attention of the U.S. government? Are these just angry Swift fans?
Taylor Swift is one of the most visible artists in the world. Her widely anticipated tour was going to attract a lot of attention already, so the ticketing issues were amplified. The whole thing was frustrating for fans and embarrassing to Ticketmaster. In today’s social media environment, complaints can get loud in a hurry, regardless of any underlying facts or the lack thereof.
People have argued Ticketmaster has been a monopoly since the 1990s. Has anything changed?
What changed is an awareness that the biggest concert promoter in the United States owns the biggest ticketing company. Live Nation acquired Ticketmaster in 2009, so that relationship has existed for a while. I feel the price increase in tickets has made consumers ask, “Why?” While Ticketmaster is the biggest ticketing company in the market, there are competitors out there. Ticketmaster claims its market share is actually smaller than it was. Ticketmaster says they now sell 65% of all tickets, while they once held 80% of the market.
Concert tickets have risen from thirty-something dollars to more than $100 per ticket. Inflation would price them at $60 per ticket. Why are they so much more expensive?
Because people buy them. One of the byproducts of online secondary ticket platforms like StubHub has been the exposure of concert tickets as an inefficient market. The artist was charging $100 for the best seats at their concerts, and scalpers were selling them for much more and introducing tiered pricing based on demand and seat location (much like airline tickets). If Taylor Swift sold tickets for $100 and a scalper turned around and sold them for $1,000, none of that extra money would go to Ms. Swift. Artists’ managers, booking agents and concert promoters realized they could charge what the public would pay and have more money go to the artists and promoters. This has also led to the implementation of technology to circumvent scalping, but that last bit is clearly still a work in progress.
Why do venues continue to sell tickets through Ticketmaster? Why have so few competitors arisen to sell tickets?
Ticketmaster is regarded as providing a good product for concert promoters and venues. They have a huge reach, marketing tools and a lot of data at their disposal — all of which can boost ticket sales. There is also the fact that Live Nation shows use Ticketmaster, and Live Nation produces a lot of shows. There are competitors, but it is tough to compete with a large, established market force.
Why should the average American care about whether Ticketmaster is a monopoly?
Just as in other areas, consumers want what they feel is an affordable price for the goods and services they desire. However, that doesn’t mean fans should be able to have cheap front-row seats. Quality costs money. The price of having the best seat in the house for Bad Bunny, Beyonce, Bruce Springsteen or the Rolling Stones is going to be influenced by limited supply and a lot of demand. The artists deserve to be compensated for their life’s work bringing pleasure to the lives of millions of people. Still, as a fan, it is tough to justify paying $500 for a concert ticket, no matter how great the experience.
How big of an industry are we talking?
Last year the U.S. concert business did over $6 billion in ticket sales.
How does the current situation affect artists? Does it help artists or hurt them?
High ticket prices can help artists earn more, but it can damage their reputation with fans if the prices seem too high. This past year, we saw the historically beloved Springsteen get walloped with negative fan reaction to his ticket prices. Interestingly, with the Rolling Stones, fans just bought the high-priced tickets. We didn’t hear much noise about it.
How could the federal government help remedy this situation?
That remains to be seen. Ultimately, this is a complex situation with no easy answers. Stay tuned.