29 October 2024
In 1965, the Beatles broke records by performing for 55,000 screaming fans in New York’s Shea’s stadium. With the “Beatlemania” of the time, seeing such a big act must have cost $1,000s of dollars for tickets when adjusted for inflation, right? Wrong. Fans were able to get tickets for that show for usually no more than $5.75. Even when accounting for inflation, that only comes out to about $56 dollars [1]. A recent Pollstar analysis of first quarter-2024 ticket prices shows the average ticket price for a top 100 act at $127.38, with many especially desirable tickets, such as Taylor Swift’s Era’s Tour regularly costing fans over $500 [2]. According to Krueger, former chair of the Council of Economic affairs, “The average ticket price increased approximately 400% between 1981 and 2012, more quickly than the 150% increase in consumer price inflation” [3].
Since then the economics of the music industry have changed in several key ways and, similar to many industries across the US, consumers are bearing a brunt of the cost. Firstly, the shift away from recorded media to streaming has changed the functionality of concerts for artists. At the time of the iconic Beatles show and before the 2000s, artists and labels made a majority of the money through physical album sales, and concerts served mostly as a marketing move to promote the album. Today, the reverse is true as artists now hope to convert listeners into concertgoers to supplement the low returns from streaming .In 2017, major artists “earned 80% of their income from touring, 15% from recorded music, and 5% from publishing fees” [4].
Ticketmaster and LiveNation, two giants of the live music industry that have now merged into one, account for another side of ticket increases. Prior to the 1990s, venue tickets were sold primarily through ticketing agencies that would charge venues a fee to handle the sales and distribution of tickets. Starting in the late 80s, Ticketmaster began to change this norm by lowering the cost of the venues and instead making a profit through charging customers a “service fee” [5].This method was appealing to venues as they no longer had to pay less in a ticketing service fee and were instead able to pass this cost onto consumer. This process allowed Ticketmaster to sign exclusive contracts with venues and also continue expansion and reach by acquiring their competitors [6].
Live Nation was started in the late 1990s and now has a hold in almost every aspect of the business of live music [7]. The company makes profit through concert promotion (ticket sales), venue operation, artist management, and sponsorships/advertising. They book artists at venues and organize their tours, and are involved in event marketing and publicity as well as day-of management, such as security. Prior to 2007, when the company announced it would start its own ticketing service, Live Nation was Ticketmaster’s biggest customer [8].
The Merger and Current Hold
In 2009, shortly after Live Nation had started its own ticket selling service to rival Ticketmaster, the two companies announced their intent to merge. At this time, Ticketmaster’s market share “exceeded 80% among major concert venues” and LiveNation accounting for “64% of the nation’s top grossing amphitheaters” [9]. Within a year of the merger the Justice Department filed a Lawsuit citing Antitrust concerns; however, the merger was allowed to continue and a settlement was reached, that included behavior restrictions to limit the potential monopoly caused by this merger (AELP) included banned retaliation against venues that chose to use other ticket providers [10].
Currently, the combined Live Nation and Ticketmaster have a hand in almost every aspect of major concerts. Ticketmaster and LiveNation face almost no competition in many areas. They manage over 400 artists, control over 60% of major venue’s concert promotion and control 80% of primary ticketing, while also being involved in the secondary ticketing market [11]. Because this one company dominates so much of the market share, in many cases, artists on tour have no choice but to use Live Nation and their venue and Ticketmaster as their ticketing service.
Antitrust Laws
Antitrust laws in the US are supposed to work to “prohibit anti competitive conduct and mergers that deprive American consumers, taxpayers, and workers of the benefits of competition” according to the Justice Department [12]. More specifically, The Clayton Act and the Sherman Antitrust Act, provide the basis for government policy on this issue. The Sherman Act outlaws conspiracies and agreements to form monopolies and “unreasonably restrain trade.” The 1914 Clayton Act prohibits specific actions related to this behavior including: illegal mergers, predatory pricing, and the same person sitting on the boards of corporations that are competitors [13].
Ticketmaster has provoked many Antitrust concerns throughout its operation by purchasing competitors and increasing its market share [14]. The company’s rise to prominence led to a face off between Pearl Jam and Ticketmaster. In 1994, Pearl Jam filed a complaint with the Justice Department claiming that the company had a monopoly on the distribution of tickets and that their service fees “drastically inflate ticket prices” [15]. The band attempted an affordably priced summer tour where fans didn’t have to pay over $20, fees included. At the time, the popular band’s concerns about the monopoly were dismissed. The case was closed without action; however, this lawsuit did bring the public’s attention to Ticketmaster’s power in the industry [16].
The Lawsuit and Recommendations
In May of 2024, the Justice Department and 30 states and district attorney generals filed an antitrust lawsuit against LiveNation on several grounds. The suit argues that LiveNation is in violation of Section 2 of the Sherman Act which states “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the Several States… shall be guilty of a felony” [17]. The suit lays out some specific terms where LiveNation/Ticketmaster is in violation of Antitrust Laws.
LiveNation is accused of illegal activity in its relationships with the Oak View Group, a potential competitor in the live event space. According to the DOJ “ Live Nation and Oak View Group have colluded and established a partnership to allocate business lines, avoid competing with each other, and chart a mutually beneficial plan to cement Live Nation’s dominance.” [18]. The suit also cites how LiveNation retaliated against potential competitors and how the exclusive deals that LiveNation has with venues blocks competition and also limits artists choice, as they have exclusive deals with enough venues as to give artists no other choice but to sell their tickets through them. At the same time, despite the court’s previously allowing the 2009 merger, the justice department now argues that Live Nation “has engaged in more anti competitive activity” [19].
Antitrust laws are in place to protect competition and choice. Both artists and fans, and sometimes venues, feel as though they have no choice but to use Live Nation and Ticketmaster. Since so many venues partner exclusively with Ticketmaster,fans have no choice but to buy from them and pay whatever fees that they levy. The lack of competition and opportunity for exploitation created by the Live Nation Ticketmaster merger necessitates action to break up what is in many ways a monopoly.
The American Economic Liberties Project calls for the breakup of Live Nation’s core business through divestiture of Ticketmaster’s business from Live Nation, returning to pre-merger status quo. Their proposal also calls for an end to venue-exclusivity contracts, even if the company is broken up. Since the current structure allows Ticketmaster to “leverage its scale”, the ticketing agency could continue to expand exclusivity agreements and not allow for competitors to re-enter the market, even with the breakup of the merger [20].
I agree that the most straightforward first step is removing the combination of Ticketmaster and LiveNation, so that one company does not have a conflict of interest stake in every aspect of a concert. Specifications against monopolistic mergers in the Clayton Act could help provide a legal basis for this action. Likely the most notable successful example of this is the breakup of AT&T in 1984 [21]. While this action was successful in opening up the industry to competition, it also faced criticism that it caused inefficient consumer experience. Similar concerns arise regarding breaking up the power of Ticketmaster and Live Nation. Opposition to antitrust action in this instance could argue that separating these entities could cause more unnecessary efficiencies for the consumer; however, the option for consumers and artists to have a choice would increase competition and ultimately, just like it did in the case of AT&T, the market would stabilize [22].
In addition, since Ticketmaster is often involved in the price-gouging secondary market, attempts to limit resale of tickets could help cap the exorbitant price that fans are sometimes required to pay. However, this is one area where artists currently have more control as they can limit the resalability of their tickets on Ticketmaster’s site, making the tickets either not available for resale or transfer on the platform. However, this does often does not prevent scalpers buying tickets in bulk and engaging in the resale market on other sites. Regulating the behavior is more complicated; however, ensuring a more reasonable initial ticket price could help decrease the going-rate of tickets in the resale market, marking tickets potentially more affordable. In addition, ending venue exclusivity agreements can give artists, and venues, more choice for selling tickets through a traditional box office or other provider, and limiting the possibility for resellers to buy in bulk.
The Justice Department should seek to either prohibit or limit Ticketmaster’s ability to enter into exclusive venue agreement to achieve a more fair distribution of market share and also allow for artist’s to have freedom to choose the method of ticket distribution for their concerts, without being forced to use Ticketmaster due to exclusivity agreements. Additionally, the limiting of exclusivity agreements will, as cited previously, allow for other ticketing providers to enter the space and potentially provide real competition to Ticketmaster.
Additionally, this lawsuit could set a precedent for the enforcement of antitrust policy in the United States. Live music is not the only area where competition has been reduced due to large corporations acquiring their smaller competitors. Strong examples of government action against monopolies, such as the breakup of AT&T, are often decades-old. If Ticketmaster and Livenation are successfully forced to separate, it could encourage further suits to be levied against monopolies in other industries, creating stronger enforcement of antitrust laws and some enabling transfer away from corporate monopoly power.
Image via Magnus D on Flickr https://creativecommons.org/licenses/by/2.0/
Works Cited
[1] More Perfect Union. 2024. “What Ticketmaster Doesn’t Want You to Know: Concerts Were Cheap for Decades.” https://www.youtube.com/watch?v=u–se25_px8.
[2] Stewart, Emily. 2024. “It’s Not Just JLo: Why Big Musical Acts Can’t Sell Out Concerts Anymore.” Business Insider. June 5, 2024. https://www.businessinsider.com/jennifer-lopez-cancels-tour-slow-ticket-sales-concerts-prices-ticketmaster-2024-6.
[3] Krueger, Alan and Council of Economic Advisers. 2013. “Land of Hope and Dreams: Rock and Roll, Economics and Rebuilding the Middle Class.” Remarks as Prepared for Delivery. June 12. https://obamawhitehouse.archives.gov/sites/default/files/docs/hope_and_dreams_-_final.pdf.
[4] Zehr, Hugh (2021) “An Economic Analysis of the Effects of Streaming on the Music Industry in Response to Criticism from Taylor Swift,” Major Themes in Economics, 23, 51-63.
[5] Tkacik, Maureen, and Krista Brown. 2023. “Ticketmaster’s Dark History.” The American Prospect. January 20, 2023. https://prospect.org/power/ticketmasters-dark-history/.
[6] More Perfect Union. 2024. “What Ticketmaster Doesn’t Want You to Know: Concerts Were Cheap for Decades.” https://www.youtube.com/watch?v=u–se25_px8.
[7] Brown, Krista, and Zach Freed. 2022. “TICKETMONOPOLY.” https://www.economicliberties.us/wp-content/uploads/2022/10/LiveNation_QuickTake_R3-3.pdf.
[8] Ibid.
[9] Van Dyck, Katherine, Lee Hepner, and American Economic Liberties Project. 2024. “The Case Against Live Nation-Ticketmaster.” https://www.economicliberties.us/wp-content/uploads/2024/01/20240104-AELP-Livenation-Brief-FINAL.pdf.
[10] Ibid.
[11] Reporter, Guardian Staff. 2024. “Ten States Join Lawsuit Against Live Nation and Seek Triple Damages.” The Guardian, August 19, 2024. https://www.theguardian.com/us-news/article/2024/aug/19/live-nation-ticketmaster-lawsuit-triple-damages.
[13] Ibid.
[14] Tkacik, Maureen, and Krista Brown. 2023. “Ticketmaster’s Dark History.” The American Prospect. January 20, 2023. https://prospect.org/power/ticketmasters-dark-history/.
[15] Philips, Chuck. 2019. “Pearl Jam Vs. Ticketmaster: Choosing Sides : Legal File: The Pop Music World Is Divided Over the Seattle Band’s Allegations, Which Led to a Justice Department Investigation Into Possible Anti-competitive Practices in the Ticket Distribution Industry. – Los Angeles Times.” Los Angeles Times, March 6, 2019. https://www.latimes.com/archives/la-xpm-1994-06-08-ca-1864-story.html.
[16] Bel, Felicity. 2022. “Pearl Jam V. Ticketmaster: What Happened? | Medium.” Medium, November 22, 2022. https://medium.com/@felicitybel/pearl-jam-and-their-battle-against-ticketmaster-a544e9ae4670.
[17] Sherman Anti-Trust Act of 1890, 15 U.S.C. §§ 1-7.
[19] Reporter, Guardian Staff. 2024. “Ten States Join Lawsuit Against Live Nation and Seek Triple Damages.” The Guardian, August 19, 2024. https://www.theguardian.com/us-news/article/2024/aug/19/live-nation-ticketmaster-lawsuit-triple-damages.
[20] Van Dyck, Katherine, Lee Hepner, and American Economic Liberties Project. 2024a. “The Case Against Live Nation-Ticketmaster.” https://www.economicliberties.us/wp-content/uploads/2024/01/20240104-AELP-Livenation-Brief-FINAL.pdf.
[21] Beattie, Andrew. 2024. “A History of U.S. Monopolies.” Investopedia. April 30, 2024. https://www.investopedia.com/insights/history-of-us-monopolies/.
[22] Ibid.
Policy & Political Review 