There’s a Canadian effort to break up Live Nation
Another day, another legal headache for Live Nation.
The Consumers Council of Canada approached the Canadian Comprehensive Tribunal, asking for permission to sue Live Nation and Ticketmaster. They want Live Nation and Ticketmaster broken up and compensation for consumers.
I quote:
“The group seeks: to force Live Nation to divest itself of Ticketmaster; orders voiding terms in their contracts with artists, venues, and others; and substantial compensation for Canadian consumers, artists, and venues.
“The claim, which can be found here, alleges that Live Nation forces artists and venues to accept anticompetitive exclusive promotion, exclusive ticketing, and radius clauses. Artists who refuse lose access to all the largest venues. Venues that refuse lose access to all the most popular artists. This squeezes the profit margins of artists and venues and increases ticketing fees, thus driving up costs for fans.”
Okay, fine. There may be things worth exploring. But be careful what you wish for. If anyone thinks breaking up Live Nation and Ticketmaster will result in lower concert ticket prices be trippin’. Hard.
Concert ticket prices are set by the artist and management. How much will the tour cost to stage? How much money do you want to make? Then you have to play X shows with an average ticket price of X. Ticketmaster has NOTHING to do with the face value cost of a concert ticket. (We can talk about Ticketmaster’s service fee structure, but that’s a different conversation).
Ticketmaster has the most robust back-end of any ticket seller. They’ve invested billions in infrastructure. Anyone who wants to compete better have deep pockets to buy all those servers and data centres. Selling tickets online–pretty much the only option these days–is a complex and expensive business. If a Ticketmaster competitor emerges, it’ll have to be backed by a big company or hedge fund. Think they’ll have the best interests of music fans in mind?
Let’s say Live Nation and Ticketmaster are broken up, and half a dozen wannabe competitors move into the space. Are they all going to offer tickets for the same show? If so, who gets first crack at ticket inventory and the best tickets? How will consumers know where to go?
What if we go back to the old days when multiple promoters and ticket sellers had to bid for the right to handle a tour? The business will go to the highest bidder, of course. Guess who will have to absorb those costs? You, the buyer of the resulting concert ticket.
This will do absolutely nothing to solve the immutable laws of supply and demand. If more people want to see a show than there are tickets, there will inevitably be disappointment.
It will also not address the issue of scalping and third-party ticket sellers. In fact, this may open the situation to more abuse. The result might be fewer concert tickets available at higher prices.
I’m not going to die on the hill protecting/defending Live Nation and Ticketmaster, but I will always point out arguments that just don’t work or are based on false premises and expectations.
So good luck, Consumer Council of Canada. Are you sure you’ve thought this through?
