Live Nation and Ticketmaster lawsuit: Whatever happens won’t cut concert prices – National | 24CA News
Selling a live performance ticket must be straightforward. At its essence, a ticket is a contract between you and a promoter that permits you entry to a selected venue at a said 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 among the most opaque shopper experiences within the identified universe.
Misinformation, frustration, and ignorance about how the system works — and must work — have created a state of affairs the place followers and governments are fed up and need one thing finished about it. Good luck with that.
The newest salvo is an antitrust lawsuit filed by the U.S. Department of Justice towards 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 may be discovered on livenationentertainment.com.)
At the center of the lawsuit are 4 major issues:
- Live Nation is just too massive and too highly effective. It obtained that method through the use of Ticketmaster and a sequence of unique ticketing contracts with venues.
- Live Nation has an unfair benefit over rivals due to 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 business, permitting it to lift costs and charges.
- Ticketmaster’s dominance limits innovation within the ticketing trade, harming would-be rivals and driving up costs.
Live Nation is actually very, very massive, due to the 2010 merger with Ticketmaster, one thing that was authorized by the US Government. Last yr alone, the corporate promoted 50,059 exhibits globally, a brand new document. Ticketmaster sells about 500 million tickets a yr, and about 70 per cent of all tickets bought to main live performance venues are processed by means of Ticketmaster, in keeping with information in a federal lawsuit filed by shoppers in 2022.
And sure, the value 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 vary any of that.
Before you name me a Live Nation/Ticketmaster apologist, let’s have a look at some chilly, exhausting, irrefutable details about live performance tickets. You might not like what you’re about to learn, however that is the real-world state of affairs.
First, when setting the value of a live performance ticket, the buck at all times stops with the artist. An artist’s supervisor and agent will method 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 every part 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 price at face worth.
Once that’s labored out, Ticketmaster is used to promote the tickets. It provides a charge (often a proportion 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 any case, a business unto itself. And other than the odd glitch — hey, each website goes down now and again as a result of no expertise is ideal — Ticketmaster is excellent at promoting tickets. Given the quantity 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 many others.) and to make a little bit of a revenue. These charges make it economically doable for a constructing to host a live performance. No charges, no exhibits. Would you do all the mandatory work without cost?
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 accountable for any monetary ache on the a part of the fan. And when one thing goes unsuitable — 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 embrace all of the taxes and repair costs. By the time you bought your ticket, it may have been twice the marketed value. No longer. Airlines should give travellers the true value of the ticket with every part baked in. In the music world, many artists have balked at this as a result of they wish to make it seem like the excessive value 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 totally different than a venue signing unique pouring rights with a brewery or a delicate drink firm. Margins may be so skinny that venues need actually and stability from their suppliers. Ticketmaster is simply one other provider.
What about Live Nation’s vertical construction? Live Nation books and promotes the exhibits that are bought by means of 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 every part is completed in-house, you may 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 with regards to placing bums in seats, the price of operating 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 final word sign-off on the value of tickets? I did? Just wish to be certain.
So let’s say that the DOJ orders that Live Nation be damaged up. Ticketmaster must be bought off. It’s even doable that Live Nation may must promote its stake within the venues it owns. Then what?
We may return to the outdated days of a number of nationwide or regional promoters bidding on exhibits. The quickest option to achieve an act’s consideration is to supply the most important assure. The profitable promoter will then be below monetary stress to cowl prices. The solely method to try this is to elucidate to the artist that they should cost extra per ticket if they need that massive assure. Ticket costs will go up, not down.
Live Nation is enticing to artists as a result of it’s a one-stop-shop nationally and internationally. Sure, they may go along with one other promoter, however can they provide the identical phrases and performance-fee ensures? Maybe, however I’d guessing not. Ticketmaster has a lot of income streams like sponsorships that assist defray prices and to spice up ensures.
Other corporations might wish to tackle Ticketmaster. Go proper forward. Innovation by means of 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 of the brand new entity, all in an effort to get right into a low-margin business. They can even have to attend out any exclusivity contracts Ticketmaster presently has in place with venues. When contracts come up, there’ll inevitably be bidding wars, the value of which will probably be handed on to the buyer by means of greater facility charges. Again, this can trigger ticket costs to go up.
Yes, it’s doable that an ordered breakup of Live Nation will assist different promoters and would-be ticket sellers. Any “monopolistic practices” will probably be quashed, which can be good for the ticketing trade. Maybe customer support — at all times a bugaboo with Ticketmaster — will enhance. Perhaps somebody will give you one other option to simplify pricing that doesn’t require new legal guidelines being handed. Someone would possibly give you a option to successfully police the resale of tickets.
But who may purchase Ticketmaster? The price can be very, very excessive, so it’s in all probability a play by an fairness fund or another Wall Street building.
And will this deal with the rising price of live performance tickets? No. Will this resolve the issue of 1,000,000 folks making an attempt to purchase 100,000 accessible tickets leading to instantaneous sellouts? No. Will it deal with bigger financial points like inflation and the rising prices of staging a tour? No. Will followers’ unrealistic expectations (calls for!) of shopping for a great seat to a high 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.
Subscribe to Alan’s Ongoing History of New Music Podcast now on Apple Podcast or Google Play
