Selling a live performance ticket needs to be straightforward. At its essence, a ticket is a contract between you and a promoter that enables you entry to a particular venue at a acknowledged date and time to see a efficiency. In different phrases, it’s a factor you purchase to get you within the door. Yet promoting and shopping for live performance tickets is without doubt one of the most opaque client experiences within the recognized universe.
Misinformation, frustration, and ignorance about how the system works — and must work — have created a scenario the place followers and governments are fed up and need one thing accomplished about it. Good luck with that.
The newest salvo is an antitrust lawsuit filed by the U.S. Department of Justice in opposition to Live Nation, the proprietor of Ticketmaster, accusing the corporate of being imply, monopolistic and utilizing unlawful techniques to stifle competitors. (Live Nation’s response to the lawsuit could be discovered on livenationentertainment.com.)
At the guts of the lawsuit are 4 principal issues:
- Live Nation is simply too huge and too highly effective. It bought that approach through the use of Ticketmaster and a collection of unique ticketing contracts with venues.
- Live Nation has an unfair benefit over opponents because of its management of excursions and the 250+ venues it owns.
- These circumstances allowed Live Nation to take care of a de facto monopoly over the ticketing enterprise, permitting it to lift costs and charges.
- Ticketmaster’s dominance limits innovation within the ticketing business, harming would-be rivals and driving up costs.
Live Nation is definitely very, very huge, because of the 2010 merger with Ticketmaster, one thing that was authorized by the US Government. Last yr alone, the corporate promoted 50,059 reveals globally, a brand new report. Ticketmaster sells about 500 million tickets a yr, and about 70 per cent of all tickets offered to main live performance venues are processed via Ticketmaster, in accordance with information in a federal lawsuit filed by customers in 2022.
And sure, the worth of tickets has skyrocketed lately. And there’s no query the added charges and repair costs are annoying. But breaking apart Live Nation isn’t going to alter any of that.
Before you name me a Live Nation/Ticketmaster apologist, let’s have a look at some chilly, arduous, irrefutable details about live performance tickets. You might not like what you’re about to learn, however that is the real-world scenario.
First, when setting the worth of a live performance ticket, the buck at all times stops with the artist. An artist’s supervisor and agent will strategy Live Nation (or any promoter for that matter) and say, “We want to go on tour. Our costs are projected to be X and we’d like to make a profit of Y. How many tickets do we need to sell at what price in how many cities to make that happen?”
Live Nation then plugs all the things right into a spreadsheet and comes up with a break-even quantity after which tiers of ticket costs that may make the tour worthwhile for the artist. Costs and expectations are adjusted earlier than the artist indicators off. Again the singer/band has the ultimate say on how a lot tickets will value at face worth.
Once that’s labored out, Ticketmaster is used to promote the tickets. It provides a charge (normally a share of the face worth), which covers all its prices (consider the infrastructure and expertise required!) and permits it to make a revenue. Ticketmaster is, in spite of everything, a enterprise unto itself. And other than the odd glitch — hey, each web site goes down now and again as a result of no expertise is ideal — Ticketmaster is superb at promoting tickets. Given the amount it offers with 24/7/365, nobody does it higher.
What in regards to the venue or facility charge? This cash covers the prices incurred by the venue (electrical energy, safety, and so forth.) and to make a little bit of a revenue. These charges make it economically potential for a constructing to host a live performance. No charges, no reveals. Would you do all the required work without spending a dime?
Having these charges separate from the face worth of the live performance ticket makes the act look good. It makes them seem that they’re on the facet of the followers and large, dangerous Ticketmaster and Live Nation are chargeable for any monetary ache on the a part of the fan. And when one thing goes improper — bear in mind the Taylor Swift Eras Tour debacle? — the blame falls on Ticketmaster and Live Nation and never the act.
There have been calls for for all-in pricing. Not that way back, airways used to promote fares that appeared insanely low as a result of they didn’t embody all of the taxes and repair costs. By the time you bought your ticket, it might have been twice the marketed worth. No longer. Airlines should give travellers the true worth of the ticket with all the things baked in. In the music world, many artists have balked at this as a result of they need to make it appear to be the excessive worth of the ticket isn’t their fault.
What about Ticketmaster’s unique contracts (usually 5 years or so in size) with venues? This isn’t a lot completely different than a venue signing unique pouring rights with a brewery or a tender drink firm. Margins could be so skinny that venues need definitely and stability from their suppliers. Ticketmaster is simply one other provider.
What about Live Nation’s vertical construction? Live Nation books and promotes the reveals that are offered via its Ticketmaster subsidiary with some gigs occurring in Live Nation-owned venues. On the floor, that does look fairly monopolistic. But it’s additionally extremely environment friendly. If all the things is completed in-house, you’ll be able to maintain prices decrease.
And once more, neither Live Nation nor Ticketmaster set the face worth of the live performance ticket. And as a result of many artists are given a assured per-show payout by Live Nation, the promoter assumes all the chance relating to placing bums in seats, the price of working Ticketmaster to promote tickets, and, within the instances the place it owns the amphitheatre, membership, or theatre, to eke out a revenue for these buildings.
Did I point out that the artist has the last word sign-off on the worth of tickets? I did? Just need to be sure that.
So let’s say that the DOJ orders that Live Nation be damaged up. Ticketmaster must be offered off. It’s even potential that Live Nation might should promote its stake within the venues it owns. Then what?
We might return to the previous days of a number of nationwide or regional promoters bidding on reveals. The quickest technique to acquire an act’s consideration is to supply the biggest assure. The profitable promoter will then be beneath monetary stress to cowl prices. The solely approach to try this is to clarify to the artist that they must cost extra per ticket if they need that huge assure. Ticket costs will go up, not down.
Live Nation is engaging to artists as a result of it’s a one-stop-shop nationally and internationally. Sure, they may go together with one other promoter, however can they provide the identical phrases and performance-fee ensures? Maybe, however I’d guessing not. Ticketmaster has numerous income streams like sponsorships that assist defray prices and to spice up ensures.
Other corporations might need to tackle Ticketmaster. Go proper forward. Innovation via competitors is at all times good. But changing into a competitor to Ticketmaster would require billions in funding in software program, infrastructure, and promotion/advertising and marketing of the brand new entity, all in an effort to get right into a low-margin enterprise. They can even have to attend out any exclusivity contracts Ticketmaster at present has in place with venues. When contracts come up, there’ll inevitably be bidding wars, the worth of which will likely be handed on to the buyer via larger facility charges. Again, this may trigger ticket costs to go up.
Yes, it’s potential that an ordered breakup of Live Nation will assist different promoters and would-be ticket sellers. Any “monopolistic practices” will likely be quashed, which can be good for the ticketing business. Maybe customer support — at all times a bugaboo with Ticketmaster — will enhance. Perhaps somebody will give you one other technique to simplify pricing that doesn’t require new legal guidelines being handed. Someone would possibly give you a technique to successfully police the resale of tickets.
But who might purchase Ticketmaster? The value can be very, very excessive, so it’s in all probability a play by an fairness fund or another Wall Street development.
And will this tackle the rising value of live performance tickets? No. Will this remedy the issue of 1,000,000 folks making an attempt to purchase 100,000 out there tickets leading to prompt sellouts? No. Will it tackle bigger financial points like inflation and the rising prices of staging a tour? No. Will followers’ unrealistic expectations (calls for!) of shopping for seat to a prime act for 50 bucks be realized? No.
What would be the benefit of a Live Nation breakup to the buyer?
I can’t see any. Not one.
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Alan Cross is a broadcaster with Q107 and 102.1 the Edge and a commentator for Global News.
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