Only days before Sunday’s Grammy Awards, Beyoncé announced a new world tour for her “Renaissance” album. Instead of putting tickets for all shows on sale together, though, Beyoncé is rolling out sale dates to try to avoid ticketing system crashes that have hit other big acts, notably Taylor Swift.
Ticketmaster’s handling of Swift tickets was a disaster. This fact has been well established by fans, members of the news media, in an admission by the company and by the artist herself.
That’s why I was surprised to hear testimony from Live Nation’s president at a recent Senate hearing in which I also testified. Live Nation, which merged with Ticketmaster in 2010, argued that its massive market share (about 80%) has allowed it to innovate and make advances that greatly benefit consumers.
A few million Taylor Swift fans would respond: This is why we can’t have nice things.
How Ticketmaster harms competitors, consumers
I understand the fans’ position. Other industries operate in a free market where companies have to compete in a vibrant market against one another to earn and retain a customer’s business. These companies focus on innovation, choice, quality and price of goods, and more. They cannot abuse their capabilities to harm their competitors or others in their supply chain.
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We have come to expect this kind of market when we go comparison shopping for all sorts of things – clothing, vehicles, furniture and, yes, live event tickets. The auto market, for example, is a robust, thriving, diverse industry largely adhering to traditional supply-and-demand forces.
When I purchased a used Volvo in 2015, the company didn’t place restrictions on what I do with my car after I paid for it. If I decide to sell it, Volvo will have no role in the transaction. This is how most industries work. But live event ticketing is different.
Ticketmaster’s outright market dominance has allowed the company to wield control over purchased tickets – a consumer’s private property. For example, Ticketmaster puts a wide array of restrictions on the resale of their tickets, which they claim help weed out bots but in reality, it’s the fans who suffer. Ticketmaster could even ban the transfer of tickets. In other cases, it requires fans to obtain a Ticketmaster account to sell or give away tickets.
It holds back up to half of tickets that will eventually be available for a show, only to trickle them out later at higher prices. And it uses technology with consumer-friendly-sounding names such as “Verified Fan” that harm fans but help Ticketmaster continue its domination of the market.
Swift fans sat through multiple presales, traded access codes and were met with a system failure. There were promises that the hardcore Swifties would be the most likely to receive tickets through Ticketmaster’s Verified Fan program, which the company claims identifies software programs (bots) that circumvent online sales restrictions. But fans waited for hours in long queues while the site was crashing for others. Days later, Ticketmaster canceled the public sale of tickets to Swift’s tour.
Live Nation dominates artist management, venues management and tour promotion
Ticketmaster blamed bots, resale and excessive demand for the debacle while missing what fans and lawmakers alike saw very clearly: the results of a company without competition.
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Ticketmaster maintains such outsized control over tickets not just because it handles more ticketing for concerts and sporting events than many of its competitors combined, but because it is part of Live Nation – the company that dominates artist management, venues management and tour promotion. With this kind of control, the company can bundle services with event organizers to include ticketing.
Some venues and promoters complain that the company doesn’t persuade – it threatens them with access to Live Nation-managed concerts if they don’t ticket with Ticketmaster.
Another part of the problem that plagues ticketing is a debate over what ownership of a ticket actually means. Some say a ticket is not owned but instead is a lease or a rental of a space in a venue. Thinking of a ticket as a rental is a way for monopolies to limit resale and stifle the free market, furthering their market power and harming consumers.
The commodity of going to a concert is the artist, not the venue. No one is paying for a seat at Madison Square Garden unless there is a performance. Ask any fan attending a Jacksonville Jaguars game or a Harry Styles concert.
I oppose additional layers of government regulation, but that is because many industries fall under a workable regulatory framework. With live events, aside from a patchwork of laws in a few states, there is very little.
At the federal level, there are monopoly regulations, a law making the use of software bots to purchase tickets illegal, and a Live Nation/Ticketmaster merger consent decree that prescribes market behaviors the company is expected to self-police.
If the Justice Department and the Federal Trade Commission don’t have the enforcement chops to fix live events, Congress should step in to protect the markets for artists, tour promoters, independent venues, competing ticketing companies and consumers. Whether that means unraveling the merger or passing legislation like the BOSS Act clarifying its position on oversight authority, something has to be done.
As I told the Senate Judiciary Committee last month, consumer welfare is very clear to define, and there are clear harms to consumers from anticompetitive practices in live event ticketing.
If one thing is certain, as superstar Beyoncé announced her world tour last week, all eyes will be on how the process for fans unfolds. Even the Senate Judiciary Committee took note, retweeting the announcement Thursday with a no-nonsense, to-the-point promise: “We’re watching, @Ticketmaster”
There’s bad blood. Just ask the Swifties.
Sal Nuzzo, senior vice president at the James Madison Institute in Florida, recently testified at the Senate Judiciary Committee’s hearing “That’s the Ticket: Promoting Competition and Protecting Competition in Live Entertainment.”
Story Credit: usatoday.com