Thousands of Swifties have found a new outlet for their anger and disappointment following Ticketmaster’s botched presale for Taylor Swift’s Eras Tour: antitrust law. Since the issues began on November 15, fans and industry pundits have rallied around breaking up event promotion company Live Nation and ticketing company Ticketmaster, which merged in 2010. It’s not just Swifties — although there is a contingent of fan-lawyers on the case. Congress’s chief trustbuster, Senator Amy Klobuchar, is once again scrutinizing the merger, while her colleagues, like Representative Alexandria Ocasio-Cortez, have called the companies a monopoly. Multiple states are investigating Live Nation — as is the Department of Justice, reportedly in an ongoing process predating the headlines of the Eras Tour presale. (The Justice Department had no comment on the investigation when reached by Vulture.)
Daily reminder that Ticketmaster is a monopoly, it’s merger with LiveNation should never have been approved, and they need to be reigned in.
Break them up.
— Alexandria Ocasio-Cortez (@AOC) November 15, 2022Dr. Diana Moss has been advocating for the companies’ breakup for years. As president of the American Antitrust Institute, she has had her eye on Ticketmaster since before the merger — when it already occupied an outsize share of the ticketing market. (Remember Pearl Jam’s crusade?) The AAI loudly criticized the merger and has called for a remedy following reports that Live Nation coerced venues into using Ticketmaster, which the Department of Justice later corroborated. Now, Moss says, Swift fans’ issues with Ticketmaster’s online platform during the presale are just a symptom of an obvious competition issue. (Ticketmaster estimated that 15 percent of site interactions had issues on November 15. Swift said it “pisses me off” that even the fans who got tickets feel “like they went through several bear attacks.”) So are the price spikes, thanks to Ticketmaster’s Platinum “dynamic pricing,” which frustrated fans during sales for high-demand tours by artists like Bruce Springsteen and Blink-182. “This is very, very typical of monopolists,” Moss says. “There’s no competitive pressure to innovate, so they produce poor-quality products.”
After blaming the Swift presale issues on record-setting demand, Live Nation defended against the monopoly allegations with a statement responding to the reported Justice Department investigation. The company claimed Ticketmaster’s dominance in the market was due to its quality, calling Ticketmaster “the most transparent and fan-friendly ticketing system in the United States.” Live Nation cited the approval of its merger in 2010 and the consent decree it had to follow afterward — which was extended through 2025 after the previous investigation — as evidence that all was right in the market. As in Ticketmaster’s statement on the Eras Tour, Live Nation reiterated its commitment to improvement.
Problems in ticketing are bigger than even Live Nation and Ticketmaster — starting with the fact that demand to see some A-listers massively dwarfs supply of tickets. Even so, Moss claims other issues, from problems with the online platform to dynamic pricing to high ticket fees, can be solved by turning an eye toward the Live Nation–Ticketmaster merger. (She laughs at Live Nation’s defense of its status.) And the outcomes of a breakup, too, could be bigger than the two companies. “Let’s remember that everyone else in the supply chain gets the benefit of competition as well: the independent concert promoters, the concert venues that are not controlled by Live Nation, artist managers, the artists themselves,” Moss says. She spoke to us about how breaking up Live Nation and Ticketmaster could solve problems in ticketing, what could happen next in this saga, and what fired-up Swifties can do about it.
The American Antitrust Institute has studies and statements going back to 2010, when the Live Nation–Ticketmaster merger was first happening. Back then, what was it about the merger that started to set off alarm bells?
It actually goes back even further. We started before the merger. Transferability of tickets with paperless ticketing was an issue even before the Live Nation–Ticketmaster merger. But let’s start with the merger. That merger was what we call in antitrust speak “presumptively illegal.” It put together two parts of the supply chain: Live Nation, which covered concert promotion and venue operation, and Ticketmaster, which covered ticketing. At the time, Ticketmaster had an enormous share in primary ticketing, north of 80 percent, and that means that Ticketmaster, even back then, essentially had a monopoly in ticketing. Putting together that kind of market player with all the upstream functions that Live Nation brought to the merger created very powerful incentives for Ticketmaster to engage in practices that would ice out smaller rivals. By being vertically integrated like that, it creates incentives to keep all the business inside the Live Nation–Ticketmaster system.
The DOJ focused on the overlaps between Ticketmaster’s ticketing platform and Live Nation’s then–really tiny, fledgling ticketing platform. And the reality was, that’s not the issue. The issue was a vertical issue, and that has all come to pass. For years, Live Nation–Ticketmaster has, in fact, been engaging in these harmful exclusionary practices, so when the DOJ revisited the consent decree containing these remedies that were put into place in 2010, it had six concert venues anonymously on record saying things like “We were threatened. We were harassed if we didn’t agree to take the Ticketmaster ticketing platform.” Bottom line is there is established evidence that Live Nation–Ticketmaster has engaged in these types of monopolistic practices that exclude rivals.
You could craft a similar story for how Live Nation–Ticketmaster has excluded rivals in the secondary ticketing markets. Over the years, as Ticketmaster has moved into the secondary ticketing market, we now have a whole host of concerns about how Ticketmaster squelches competition in resale. It’s really a two-pronged concern.
What do you make of this current political moment with Live Nation and Ticketmaster?
The political attention, the enforcement attention, is all good. It’s good for competition, it’s good for consumers, and it’s good for the artists.
We’ve been complaining about this and writing about it and analyzing it for 12 years now. We criticized the Department of Justice two years ago. All it did was extend the conditions that were already in effect. Well, clearly those conditions were ineffective. We’re not having an epiphany moment here. All that’s happening is all the advocacy that we’ve engaged in and other groups have engaged in is paying off because of this catalyzing event. Now there’s a bonfire. The full force of the United States antitrust enforcement mechanisms should be brought to bear.
Live Nation put out a statement after the news of the reported investigation basically claiming that there is competition. And saying this consent decree, that you say was problematic from the start, is a big reason why things are going okay, because Live Nation follows it. There’s the claim that Ticketmaster is far and away the best platform anyway, so that’s why it occupies such a big share. What’s your take on that?
[Laughs.] I’m sorry to laugh. I’ve been a competition advocate for 25 years, and you hear everything in defense of illegal conduct, but this really takes the cake. First of all, we know that monopolies, because they have an incredible amount of market power and do not have smaller rivals breathing down their neck, have very little incentive to innovate. So the poor-quality service on the Ticketmaster platform, the inability of the platform to handle the mass demand that came in, is in part a function of Ticketmaster’s weak, if not nonexistent, incentives to innovate on its platform.
The Ticketmaster platform is Ticketmaster attempting to maintain its market power. Think about the resale market, all the price spikes, and the $42,000 tickets that went up. This is what Ticketmaster does vis-à-vis the resale market: drive consumers always back to Ticketmaster. It engages in certain practices like holdbacks, where it will only release small blocks of tickets when concerts first go up. So prices spike, of course, because there’s scarcity and there’s excess demand relative to supply. I don’t know if there were holdbacks going on, but I highly suspect it in the Swift incident. And Ticketmaster restricts ticket transferability. There are fewer and fewer guarantees that a fan who buys a ticket on the resale market can actually use that ticket and get into the venue because of revolving barcodes. The list goes on and on.
I’m sure you saw Greg Maffei, chair of Live Nation, on CNBC. He was asked about calls to break up Live Nation and Ticketmaster, and he was saying, “Well, we even have other promoters like AEG that want to use Ticketmaster for ticketing because we’re the best.” That did not sound like what was actually was going on here.
When Ticketmaster’s the only game in town for ticketing, does anyone have any choice to use different ticketing platforms? AXS is a ticketing platform, but it’s very small. And, by the way, it has high ticket fees too. I guarantee you, if we had more ticketing platforms competing with one another, ticket fees would drop like rocks. The quality of the technology would increase and improve. The resale market would function better in conjunction with the primary market. Look at Europe — they don’t have a Ticketmaster in Europe. They have competition, and ticket prices are lower.
Taylor Swift says she’s mad at the situation but seems to be tiptoeing around criticism. I’ve heard people wondering if there are non-disparagement agreements so an artist can’t quite fully speak out about Ticketmaster. I know it’s not as simple as “Don’t work with Ticketmaster,” because there are issues — like if you want to play an NFL stadium, you have to use Ticketmaster because of that partnership. So what can an artist do here?
It’s a hard one. I will note that we didn’t hear much from the Swift organization when this debacle was ballooning out of control. There was an article, which I’m sure you saw, that says, “Mother loves money,” and I won’t comment on that. I’ll just put that out as a marker. But the bottom line is artists want their fans to be able to access their concerts. Fans want to see their artists. If fans have to pay excruciatingly high monopoly prices and ticketing fees, they can’t see their artists. And if they’re restricted in the resale market, they can’t get access that way either. And that’s what Live Nation–Ticketmaster has locked up.
We should be hearing more advocacy from artists, smaller venues, and independent concert promoters about how the monopoly adversely affects them. But this is the fear and retaliation problem if you’re up against a monopoly.
📲 Taylor Swift issues a statement via IG Story regarding her #TSErasTour presale and Ticketmaster.
“And to those who didn’t get tickets, all I can say is that my hope is to provide more opportunities for us to all get together.” pic.twitter.com/A5a7VmrKVI
— Taylor Swift Updates (@SwiftNYC) November 18, 2022Is there anything that an angry fan can do about this?
This is the existential question about the role of consumers and mobilizing consumer complaints in the antitrust world. There are direct mechanisms like antitrust consumer class-action cases. There’s consumer education. They have to be cognizant of where they take their business and how much information they give to Ticketmaster on its platform. And they have to complain. They have to complain to their legislators — state and federal. Consumers are a very dispersed, atomistic group of market participants, so we have to find ways to collect them together. Certainly, voting with their dollars, seeking out, at every opportunity, other ways to get their tickets to avoid Ticketmaster, is a temporary solution. That’s not a fix, obviously.
Looking forward, there are a lot of irons in the fire now with Congress, state AGs, and the Justice Department. How long could this take to shake out?
If the Justice Department alone, or in conjunction with the states, were to bring antitrust cases — first, it has to investigate, and that could be months. If it did bring a case, it would have to be litigated and, depending on the outcome, could go up on appeal. These cases can take months, if not years, to play out. There are legislative proposals at the state level and the federal level. In fact, many of those bills have been floating around for some time.
I think we could only expect Live Nation–Ticketmaster to continue with its practices while this is going on. Obviously, it’s under the spotlight now, but it continues to defend its actions with platitudes and false statements. And it will continue to point the finger at baseless reasons for why we are getting the outcomes we’re getting in ticketing. I think the public sees that and is now sufficiently skeptical and outraged. Actually putting that under the spotlight is a really, really good thing.
This interview has been edited and condensed for clarity.
Related
At the time of the merger, many advocates said vertical integration — bringing together companies at different stages of the supply chain (like event promotion and ticketing) — would increase efficiency. “The evidence we now have, from years and years of vertical mergers, is that they don’t deliver those kinds of benefits very easily,” Moss says. The Biden Justice Department has been harder on antitrust issues than Trump’s, recently stopping Penguin Random House’s purchase of Simon & Schuster. Joe Biden recently announced plans to target “junk fees” in sectors including ticketing. What Would Breaking Up Ticketmaster and Live Nation Do?ncG1vNJzZmivp6x7t8HLrayrnV6YvK57kWlpa2dhZny1rdilpqtlo6y2p8CMraauql2ptqS3xK2qZqyZmLimwMyaqq2domKyubzLmqCnnZRjtbW5yw%3D%3D