ConcertsMusic Industry

Here’s a problem with the DOJ Live Nation lawsuit that no one has talked about yet: A Ticketmaster sale could make buying tickets worse in this specific way.

The big story in the music business over the last week or so has been the US Department of Justice’s antitrust lawsuit against Live Nation. Back in 2010, the government allowed Live Nation to buy Ticketmaster if it adhered to certain provisions. The DOJ now alleges that Live Nation has broken the terms of that deal, prompting a move to perhaps have the company divest itself of Ticketmaster. This, they say, will result in innovation and competition that will benefit the consumer.

“Yay!” go The People. “Someone is finally taking on the monster! DOWN WITH TICKETMASTER!”

Okay, sure. But I’ll say it again: Forcing Live Nation to sell Ticketmaster will have ZERO benefit to the concert fan. Ticketmaster does NOT set ticket prices; that’s the domain of the artist and the promoter based on costs and hope-for profit. The only way Ticketmaster makes money is through its service charge on the price of the ticket.

Yes, we should argue about the size of that service charge–it’s usually around 5% of the face value of the ticket, which can be a lot on a ticket worth $500–and investigate Ticketmaster’s sometimes lackluster customer service and it’s semi-dubious resale site. But the fact remains that Ticketmaster is generally very good at selling tickets. Its existence is the result of decades of mergers and buyouts of other ticketing companies. And the reason there’s no other company with the size and reach of Ticketmaster is because it’s a low-margin, high-risk, capital-intensive business.

And this is also very important: With Ticketmaster, fans have one-stop-shopping. This leads me to a big potential problem if Ticketmaster is sold off and other ticket sellers emerge to compete with it.

Back in the old days before computerized ticketing, fans had to line up–sometimes overnight–at a box office to buy a hard printed ticket. The trick was, which box office had tickets for the best seats? This is a problem of allocation.

When I was a kid growing up in Winnipeg and I wanted tickets to a show, my options were to go to any number CBO box offices in the city (I think they were inside the city’s 4-5 Bay stores), an ATO box office (in all Eatons stores, I think), or any number of record stores. It was impossible to guess which location had front row tickets and which only had seats up in the nosebleed section.

It was a crap shoot. There were theories, rumours, and anecdotal evidence over which specific box office might have the best tickets for any given show. As far as I know, no one was ever able to crack the code.

Let’s say that the DOJ forces Live Nation to sell Ticketmaster (To who? That’s another issue.) and several new companies decide to compete against it. How do you allocate seats in a venue to all these sellers? Which company gets the best seats? And how will the consumer know?

It doesn’t matter if we’re dealing with hard tickets or computerized one. One seat equals one ticket–and only one company can sell that ticket. It doesn’t matter if, say, a Ticketmaster competitor has a lower service fee as an enticement. If that company can’t get you the seat you want, who cares about a few bucks?

Having additional ticket sellers will also do nothing about instant sellouts. In fact, with additional outlets selling tickets, those instant sellouts may happen even faster.

Consumer-friendly competition? Not in this case.

By all means, investigate Live Nation and Ticketmaster to see if they really did screw up with that 2010 merger agreement. But if Live Nation is forced to divest Ticketmaster…well, just be careful to temper your expectations.

Alan Cross

is an internationally known broadcaster, interviewer, writer, consultant, blogger and speaker. In his 40+ years in the music business, Alan has interviewed the biggest names in rock, from David Bowie and U2 to Pearl Jam and the Foo Fighters. He’s also known as a musicologist and documentarian through programs like The Ongoing History of New Music.

Alan Cross has 38403 posts and counting. See all posts by Alan Cross

Let us know what you think!

This site uses Akismet to reduce spam. Learn how your comment data is processed.