Here’s Why It’s Impossible to Get Face-Value Tickets to Top Shows



Anyone who has purchased tickets to a live event in recent years has probably been frustrated by a process that feels unreasonable, with presale corporate preferences, quick sellouts and exorbitant fees as high as 75% of the ticket’s face value.

More often than not, would-be concertgoers end up on a secondary market site where tickets are marked up anywhere between 50% to 7,000% of the face value price. Experts lay blame on the dominance of one particular company: Ticketmaster.

In 2010, Ticketmaster, which had nearly 70% of the ticketing service market share, merged with Live Nation, the world’s largest concert promotion company, creating a live-event conglomerate of unrivaled power and sparking competition concerns among consumer advocates, particularly regarding rising fees.

Prior to the merger, the consequences of putting the two companies under one roof was clear to most people, said Zach Freed, outreach manager at the American Economics Liberty Project, a nonprofit that advocates for corporate accountability.

“But instead of blocking the merger outright, the Department of Justice at the time imposed a consent decree with behavioral conditions on Ticketmaster,” he said, arguing that the agreement was “a failure” because the company repeatedly violated conditions of the merger over several years.

In 2019, the DOJ accused Live Nation Entertainment of retaliating against and threatening venues to ensure they used Ticketmaster in violation of the consent decree, a charge the company denied. The two sides reached a settlement in 2020 to extend the terms of the consent decree through December 2025. It was set to expire in July 2020. Critics of the merger called it a slap on the wrist.

With the Biden administration vowing to promote competition by cracking down on corporate monopolies and their anti-competitive practices, lawmakers are calling on the DOJ to include the ticketing industry in its agenda.

Cornering the market: How ticket fees got so expensive

Average prices for entertainment and sporting events have gone up significantly since the mid 90s, and increased as much as 100% recently due to rising inflation. But those prices don’t include the battery of fees ticketing services charge, which Freed said Ticketmaster hikes up “because it can.”

There are service fees, convenience fees, processing fees, facilities fees and other forms of itemized charges that customers can’t avoid. And while Ticketmaster has historically received the brunt of the criticism over fees, those profiting from the charges include the venues, promoters and even artists themselves, who generate most of their revenue from touring.

According to Ticketmaster, the fees are determined “in collaboration” with its clients, all of whom receive a cut from the charges. This money-sharing structure isn’t new. In fact, the strategy helped Ticketmaster grow from a small regional company in Arizona to overtake every competitor in the market.

The plan was the brainchild of Fred Rosen, who joined the company as chief executive in 1982. To compete with Ticketron, then the largest ticketing service in the U.S., Rosen presented venues around the country with an offer they couldn’t refuse: Instead of charging them for using Ticketmaster’s services — as Ticketron did — he would increase the fees charged to customers and split the money with the venue, giving both entities new revenue streams. The strategy worked and by 1991, Ticketmaster had put Ticketron out of business.

“Anyone who changes an economic model in America isn’t going to be Mary Poppins,” Rosen told Forbes in a 2010 interview.

Over the next four decades, Ticketmaster maintained its dominance by absorbing every competitor in the market and securing long-term contracts with venues by offering up the highest fee shares.

Music fans are just stuck having to deal with it

Ron Knox, senior researcher at the Institute for Local Self-Reliance

Seeking alternative ticketing services can be challenging for independent venues and promoters, a task made more difficult by the Live Nation merger. That’s because Live Nation manages big artists, which could result in big draws for those venues, according to Ron Knox, senior researcher at the Institute for Local Self-Reliance, a nonprofit advocacy group.

If they want to attract a larger audience, they are stuck with Ticketmaster’s services. Thus, customers also face limited options.

“There’s no other ticketing company that says, ‘Hey, Ticketmaster’s ripping you off by charging these outlandish service fees and hiding their piece and doing all the other things,’” Knox said. “Music fans are just stuck having to deal with it.”

The fact that concertgoers are left with no choice but to use Ticketmaster only contributes to its unparalleled monopoly in the market. As Live Nation earns more money in fees, it can afford to book more extravagant tours in bigger stadiums, solidifying its dominance.

Knox said the two entertainment companies reinforce and grow from each other’s monopolistic power at the expense of smaller rivals who can barely compete in this setting.

“And ultimately, fans end up paying the final price for that,” Knox said.

“The average fan has no chance of buying tickets at face value

Before mulling over the prices of fees, concertgoers must first overcome the obstacle of getting the tickets in the first place. Tickets for top acts typically sell out in minutes after they are released to the general public.

However, a 2016 probe by the New York Attorney General‘s Office found that the reason tickets appear to sell out so quickly is because the vast majority of them are withheld from the general public. In fact, among the top concerts performed at New York venues between 2012 and 2015, the investigation found less than 25% of the tickets were released to the general public in an initial on-sale.

“Ticketing is a fixed game,” then-N.Y. Attorney General Eric Schneiderman said in a statement accompanying his report.

In one example, the AG’s report noted that only 1,600 tickets — less than 15% of all seats to the show — were released to the general public for a July 24, 2014 Katy Perry concert at Barclays Center.

“The average fan has no chance of buying tickets at face value,” one New Yorker wrote in a complaint to the AG’s office. “This is a disgrace.”

So where did the majority of the tickets go?

The remaining tickets are divided among holds — tickets reserved for artists, agents, venues, promoters, marketing departments, record labels and sponsors — and pre-sales, typically comprising of credit card holders and members of fan clubs.

It is during these presales that brokers begin harvesting tickets, the N.Y. AG found, and then buy up more during the general sale, often using illegal bots to make bulk purchases. These tickets are then resold on secondary market retailer sites like StubHub, Vivid Seats or SeatGeek, marked up between 50% to 7,000% of the ticket’s face value.

In a recent episode of HBO’s “Last Week Tonight,” host John Oliver explained that secondary market sites peddle an image of “fan-to-fan marketplaces,” but their relationship with primary ticket sites like Ticketmaster is much closer.

“Ticket-selling sites go out of their way to cater to their broker clients, because they bring them in a lot of money,” Oliver said. “While they limit the number of any one account can buy to an event, there is an obvious way for brokers to get around that and that’s simply to have more than one account.”

Ticketmaster has also been accused of colluding with scalpers by enabling brokers to purchase tickets in bulk and reselling them on the company’s platform, with Ticketmaster collecting fees from both purchases, according to an investigation by Canada’s CBC News.

The outlet sent a pair of undercover reporters posing as scalpers to a ticketing convention in Las Vegas. The journalists captured video of a man purported to be a Ticketmaster sales representative pitching the company’s resale platform TradeDesk. In the footage, the man alleged Ticketmaster turns a blind eye to scalpers and claimed he works with resellers who have “more than 200” Ticketmaster.com accounts, in violation of the company’s own policy.

Ticketmaster and its parent company Live Nation did not respond to NBC’s request for comment. In a previous statement to Variety, Ticketmaster denied the accusations that it was conspiring with scalpers and announced it would conduct an internal review of its reseller accounts. It was not immediately clear what changes, if any, the company has made to uphold its terms of service.

Calls grow to rescind the merger and break the monopoly

Lawmakers and fans alike are calling on the federal government to investigate the decade-old merger, citing its monopoly over the live-events ticket market.

Sens. Richard Blumenthal, D-Conn., and Amy Klobuchar, D-Minn., wrote to the Justice Department last month urging officials to investigate the state of competition in the live entertainment industry, including potential violations by Ticketmaster-Live Nation of the amended consent decree from 2019.

“As live events continue to open up, American consumers are confronting skyrocketing ticket prices, opaque terms, and exorbitant fees,” the senators wrote in a joint letter. “Yet live entertainment markets, especially ticket markets, are dominated by one corporation, Live Nation, which cemented its dominance through its 2010 merger with Ticketmaster.”

Blumenthal and Klobuchar cited Oliver’s “Last Week Tonight” segment and “the company’s ongoing aggressive buy-outs of potential competitors to even further dominate the market” as reasons for renewed concerns about the state of the industry.

It is the second appeal from the senators and follows a request made last year by five members of Congress, including N.Y. Rep. Jerry Nadler and N.J. Rep. Bill Pascrell Jr., who urged Attorney General Merrick Garland to probe the companies.

Earlier this year, Ticketmaster and Live Nation faced a class-action lawsuit in federal court in California over accusations that the companies inflated ticket fees for both primary and secondary markets.

Knox said this lawsuit has a shot to win in court because federal antitrust investigators have levied similar claims against the two companies through the DOJ. But, he believes it won’t change anything beyond reimbursing customers.

“I think at the end of the day, there’s no way to solve this problem other than to structurally separate Live Nation from Ticketmaster,” Knox said, adding that if it doesn’t happen, their monopoly power will keep on building.

NBC’s Danielle Abreu contributed to this report.





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