Ticketmaster has exclusive deals with artists and venues.
Artists not signing deals with Ticketmaster lose access to venues, and venues not signing exclusivity deals with Ticketmaster lose access to artists.
There are enough of these on both sides that neither wants to lose the other so they sign.
Side note: I worked at a small ticketing software shop circa the Ticketmaster/LiveNation merger. The CEO got a call from the feds(FTC?) doing background work on the industry's view on how it might affect competition. For the life of me I can't imagine why he said it wouldn't really matter, but I have to assume that Ticketmaster was already so locked in to the industry that perhaps it didn't.
~15 years ago, I was working with venues to see how we could handle ticketing, etc. They ALL had exclusive deals where the venue could ONLY sell online through TicketMaster and then TM would handle ~100% of the back office reporting, tracking, etc and even the onsite credit card processing for walk up sales.
It was one end to end system/suite and to replace any of it, you had to replace ALL of it once the contract was up. Not a fun space at all.
If this were the 1920s, antitrust enforcement would come down with an iron fist. The consolidation and control of the market is insane. I hope we can see some government movement about this at some point..
Specifically about Ticketmaster or what has FTC done more broadly?
Proposed a rule against hidden fees (10 days ago). It's also supposed to give FTC enforcement mechanism so that it'd be more effective than state laws that were passed and basically ignored.
Also filed an antitrust lawsuit against Amazon (less than a month ago) for how they're treating third-party sellers. And if I remember correctly a lawsuit against Facebook is supposed to proceed in December, in which the FTC is asking the court to force Facebook to sell Instagram and WhatsApp (I wouldn't get my hopes up on this one).
FTC definitely has some teeth now, but they can't wish monopolies out of existence, they have to go through a years-long court process against an army of lawyers employed by tech companies with a budget that's orders of magnitude higher than FTC's.
>FTC definitely has some teeth now, but they can't wish monopolies out of existence
Monopolies are not inherently illegal.
If a business obtains a monopoly by offering superior products or innovation, or through superior business acumen, the monopoly is legal. Antitrust issues arise when a monopoly is achieved or maintained by exclusionary or predatory acts.
Let's hope that strategy plays out. They (FTC) only have anti trust defeats to show so far.
A string of losses will set precedent that will get harder and harder to overturn. It's not clear from the outside if Ticketmaster would be a stronger case but something to ponder.
Ticketmaster isn't huge in Europe. I think CTS Eventim is the closest equivalent, with a similar share of tickets sold in a few countries, including their home turf, Germany. But I don't think it's comparable, as they're not similarly vertically integrated.
Ticketmaster are enormous in Europe. Pretty much every major artist uses them, and every festival uses them (aside from Glastonbury apparently). If that's not your definition of huge I don't know what is.
I think the lock-in is nowhere near what ticketmaster is doing. Bands don't have to make deals with Eventim, for venues Eventim is typically just an additional way to sell tickets.
Perhaps if there were enough big artists to get together and "strike" against Live Nation/Ticketmaster exclusive venues something might change for the better for their fans.
This one. Not only does ticketmaster have contracts with most venues unless they own them outright, they're also a very convenient foil as they serve as ire-magnets.
If a venue has signed a multi-year contract with Ticketmaster there's not much they can do as a short-term measure inspired by something like a strike.
Anti-trust (at least to me) has a connotation with trust-busting and splitting up companies, but I'd be interested in the ramifications of restricting Ticketmaster to creating contracts no longer than, say, 6 months.
On one hand, free markets involve sellers and buyers coming together freely which exclusivity contracts prohibit, but on the other hand exclusivity contracts are nominally voluntary agreements which is a free exchange. Perhaps free-exchange simply isn't a useful framing here.
Trust busting exists for this very case. Shorter contracts would solve nothing because the market is as far from free as it can be and the one in charge has no interest in changing that.
The busting and splitting up is a hard tool, but anti-trust has many other tools at their disposal, including maintaining status quo (i.e. refusing the merge of two companies). Disclaimer: I don't work in the US, so I'm not sure if anti-trust there is heavily biased there to this heavy duty tool, but I do know they have plenty of other tools
Sounds like a two-sided market, where a company gets their value from being able to connect one side (the artists) with the other one (the venues).
What I find strange is that people aren't usually reluctant to sign exclusivity agreements because it's very limiting. How did ticketmaster get so big to begin with to force / convince people of signing exclusivity clauses?
>How did ticketmaster get so big to begin with to force / convince people of signing exclusivity clauses?
By dangling more money.
In the 1980s, Ticketmaster beat the competitors (e.g. Ticketron) by offering the venues a better financial deal.
Ticketron charged the venues a service fee. Venues pay Ticketron.
Ticketmaster flipped that around and made a clever proposal: instead of charging the venue, we'll charge the concertgoing fans extra service fee(s) and we'll give the venue a percentage of the fees collected. To sweeten the deal, we'll even pay the venue _upfront_ money as part of signing an exclusive deal.
That's why most ideas about creating a new ticketing startup to "disrupt Ticketmaster" are naive about how the underlying business deals actually work. E.g. if the well-meaning programmers have idealistic motivations to create a new "fair ticketing" system that doesn't charge outrageous fees, the venues will not sign up with you which means you have no tickets to sell at the "cheaper & fair price".
Why would the venues use your new "fair ticketing" system if it means they get less money?!? That's the financial puzzle a viable Ticketmaster competitor has to solve.
Probably burned a lot of cash to build its dominant position and are now milking it back.
One way would be to sign deals reserving venue space in advance for a good chunk of the year. Artists wanting to perform there on dates reserved to Ticketmaster would need to sign exclusivity deals.
This has a network effect. The more they do, the more effective is the strategy and the easier it gets to keep doing it.
Ticketmaster is the official ticket seller for the NFL. It would be interesting if the NFL decided to do tickets themselves, as they easily have the scale and sway over the venues and teams. But there’s probably not enough money in it to justify it for the NFL and if Ticketmaster isn’t broken from their view, why fix it?
I think we would need some entity on the scale of the NFL to fix this. Ticketmaster is too big to take on any other way.
Ticketmaster also owns a lot of venues through Live Nation and also owns a lot of the venues labor through Crew Nation. Fortunately for the latter they have not been wildly successful at busting the IATSE union in union venues.
> Ticketmaster has exclusive deals with artists and venues.
While it's true Ticketmaster does have these exclusive deals, it's demonstrably false that this is the reason why TM still hasn't been replaced.
If you've been around the industry for a while, you'll remember that LiveNation & Ticketmaster were distinct companies. In fact, LN tried to leave Ticketmaster. LN was the one with the exclusive deals with artists. LN was the one who owned the venues.
Yet LN failed. They dumped hundreds of millions into building a ticketing platform unsuccessfully. And eventually just bought Ticketmaster.
It a good data point that even if you have the right contracts, you'll fail if you don't have the right tech.
Artists not signing deals with Ticketmaster lose access to venues, and venues not signing exclusivity deals with Ticketmaster lose access to artists.
There are enough of these on both sides that neither wants to lose the other so they sign.
Side note: I worked at a small ticketing software shop circa the Ticketmaster/LiveNation merger. The CEO got a call from the feds(FTC?) doing background work on the industry's view on how it might affect competition. For the life of me I can't imagine why he said it wouldn't really matter, but I have to assume that Ticketmaster was already so locked in to the industry that perhaps it didn't.