Last week, a congressional committee used Twitter’s shrill megaphone to issue a Clint Eastwood-esque threat against a company selling Beyoncé tickets: “We’re watching, @Ticketmaster.”
How did we get here?
Bundles of tickets for Beyoncé’s Renaissance World Tour went on sale this week. Congress is watching closely due to Ticketmaster’s spectacular collapse when Taylor Swift tickets hit the market last fall. Millions of fans went ticketless.
But congressional concerns go beyond Beyoncé.
Ticketmaster controls “a vast share” of the concert ticket market, “60 to 80 percent, depending on who you listen to,” said music industry analyst Bob Lefsetz.
The ticket broker’s 2010 merger with Live Nation united its ticketing business with a concert organizer with more than 200 top artists, dozens of venues and exclusive ticket sales offers at thousands of concert venues .
Now, “you have a company that puts on the shows, owns and operates venues, manages artists, and manages ticket sales,” said Dean Budnick, co-author of “Ticket Masters,” a story of the ‘industry. “And I think that rubs Congress the wrong way.”
The Department of Justice has reportedly opened an antitrust investigation. In a rare flourish of bipartisanship, Congress appears united behind the idea that Ticketmaster and Live Nation are adding up to form a monopoly.
Ticketmaster executives disagree.
“Since the merger, Ticketmaster’s market share has declined, due to increasing competition within the ticketing industry,” Joe Berchtold, president of Live Nation, told The Hill.
The American capitalist system depends on competition: multiple companies compete for customer business, a competition that drives down prices and improves customer service.
“Consolidation and power in the hands of the few can create problems for the many,” Sen. Lindsey Graham (RS.C.) said during a Senate Judiciary Committee hearing last month.
President Biden himself weighed in, urging Congress to “reduce the huge service fees that companies like Ticketmaster impose on tickets to concerts or sporting events that can easily add hundreds of dollars to a family night out.”
The Live Nation merger has been going on for 13 years. Why all the fuss now?
Two reasons: $5,000 tickets to Springsteen and the day Swift broke the internet.
When Springsteen fans lined up online in July 2022 for tickets to a landmark tour, they found the “face value” exceeded $5,000 in some cases.
The culprit was “dynamic pricing”, a system that sets prices based on demand. The idea is to sell each ticket for its full market value. The price is too low, and scalpers will grab it and pocket the profits. Dynamic pricing redirects money to the artist.
Fans flocked to Ticketmaster. But Springsteen had chosen dynamic pricing. “I mean, he recognized it a few days later,” Budnick said.
Jon Landau, Springsteen’s manager, told The New York Times that “our true average ticket price was around $200,” not $5,000.
Tempers cooled – until tickets went on sale for the upcoming Swift tour.
In November, Astone Jackson logged in with a special code meant to guarantee him access to a Swift ticket pre-sale for “verified fans”. This was another Ticketmaster program, also designed to get tickets into the hands of fans.
Jackson, a confirmed Swift fan from Columbus, Ohio, endured a day of heartbreak.
“I’m waiting in the queue,” he said. “It says you may be sitting in 2,000th place. And the moment you get to number one, it crashes or freezes you.
Jackson patiently joined the queue again and again. After hours of patience, he arrives at the head of the line. He selected two tickets and pressed the pay button. The tickets had disappeared.
After many tries, he gave up.
“I am a sad, heartbroken, ticketless man,” he said.
It turned out that even the mighty Ticketmaster couldn’t handle the demand for Swift’s Eras Tour, slated for the spring. Company executives blamed an unprecedented cyberattack by hackers and bots.
“We invited a million and a half that day to come and buy these tickets, but it’s a bit like partying. Everybody walked through that door at the same time with 3.5 billion requests,” said Michael Rapino, chief executive of Live Nation.
Swift, like Springsteen, is partly responsible for the breakdown. She endorsed the fan-verified effort to protect fans from scalpers. She also agreed with Ticketmaster to put millions of tickets on sale the same day.
“She wanted to blow up the internet, and she literally did,” Budnick said. “Ticketmaster should have said no.”
Swift later said of Ticketmaster, “we asked them, many times, if they could handle this type of request and were assured they could.”
And why would Swift want to break the internet?
“She wanted to be able to say she sold out stadiums across the country” in a single day, Lefsetz said.
Carolyn Sloane, an economist at the University of California, Riverside, is another Swift fan who tried unsuccessfully to secure a ticket for the Eras Tour.
“I tried to sign up for the presale, and I don’t think it even confirmed me as a real person,” she said.
Swift and her team likely regret trying to break Ticketmaster’s single-day sales record, which they did, Sloane said. “But I think it’s unfair to direct all this anger at Taylor.”
Fans come to Ticketmaster with unrealistic expectations. According to one estimate, Swift would have had to perform 900 stadium shows to meet the demand for tickets for her tour.
This imbalance between supply and demand causes chaos when an artist of Swift’s stature announces a tour. It pushes ticket prices into the stratosphere.
“And it comes down to what makes people think it’s worth paying $500 to see Taylor Swift or Beyoncé. And there’s nothing rational about it,” said Steve Waksman, professor of music at Smith College and author of “Live Music in America: A History from Jenny Lind to Beyoncé.”
Beyoncé and Swift are rich beyond imagination. Yet to capitalize on that income, they and most of their millennial peers need gig income. The advent of music file sharing with Napster in 1999 triggered the decline of lucrative album sales.
“Before Napster, they were touring to promote an album that they were trying to sell,” Sloane said. “Now they’re releasing an album to tour.”
The entire price of a three-digit ticket goes to the artist. Service fees, often totaling 20% of face value, go mostly to the site, with smaller portions reserved for credit card fees and Ticketmaster itself.
When fans complain, Ticketmaster takes the heat.
“Ticketmaster is a cover for acts,” Lefsetz said. “Ticketmaster doesn’t do anything that the deeds don’t approve of. It is the actions that set the price.
Springsteen and Swift have publicly complained about Ticketmaster, but such outbursts are rare. Ticketmaster’s market dominance leaves artists with few alternatives, analysts say.
“If you don’t choose to use Ticketmaster as your box office, as an artist, you can potentially be kicked out of every good venue in the country,” Sloane said.
Congress and the Biden administration could try one of many reforms to fix the concert ticket problem. They could crack down on the scalper market driving prices up. They could restrict the resale of tickets for profit. They could print the buyer’s name on each ticket, like airlines do. They could break up Live Nation.
They could. But industry analysts don’t think they will.
“It’s a matter that nobody in Congress understands,” Lefsetz said. “They want to get noticed by the public, which is irrational and not understanding either.”