Industry gatekeepers

[TĐH: This is a very good economic lesson on monopoly. In this case, the monopoly in selling tickets of entertainment shows, and how the monopoly was formed.]

By Ashley Wu, The Morning – The New York Times
Good morning. One company controls a wide swath of the concert industry, and lawmakers say music fans are paying the price.

Protesters outside the Senate this past week.Kenny Holston/The New York Times
Ticketmaster has come under intense scrutiny since it botched the rollout of tickets to Taylor Swift’s tour late last year. Though the company has long been accused of anti-consumer practices, the backlash to the Swift debacle brought a new level of public attention. This week, the Senate held a hearing that explored whether Ticketmaster and its parent company, Live Nation Entertainment, have an unfair monopoly over the live music industry.
I spoke with Ben Sisario, who covers the music industry for The Times, about how Ticketmaster become so dominant.
Ashley: How did we get from Taylor Swift tickets to a Senate hearing?
Ben: It was a phenomenal pop-culture moment. Taylor Swift, the biggest artist in the world, announced that she was going on tour for the first time in years. When there are millions of people trying to get a limited supply of tickets, there are going to be a lot of people left unhappy.
But Ticketmaster’s website also had a lot of problems. Ticketmaster said its system was overwhelmed by bots, which are used by scalpers to grab tickets ahead of real fans, and then sell those tickets back to them at inflated prices.When people logged on to purchase tickets, they were dumped into a digital queue with every other fan — and all the bots. Some fans said that even if they got through the line and added tickets to their shopping cart, by the time they went to check out, the tickets were gone.
It broke the internet. Huge numbers of people complained that they didn’t get a ticket and said that Ticketmaster failed to do its job. That caught the attention of politicians. Representative Alexandria Ocasio-Cortez called for Live Nation and Ticketmaster to be broken up, and Senator Amy Klobuchar announced a hearing with the Senate Judiciary Committee.
The complaints from fans pointed to a longstanding criticism that Ticketmaster lacks any real competition. How did the industry come to be dominated by one company?
Live Nation Entertainment as we know it is the combination of two companies: Live Nation, the events promoter — which hires artists and puts on shows — and Ticketmaster, the ticket seller. These are usually separate jobs in the live music business.
The whole world of concert promotion had been small-scale and regional until the late 1990s, when it was all rolled up and Live Nation became the biggest concert company ever. Ticketmaster had been around for a long time, but it had never been in the business of hiring artists to play shows. The two companies were already dominant in their respective industries, and in 2010, they merged.
Usually with mergers that big, the government has to ensure that the new company will protect consumer interests. Were officials worried about a monopoly at the time?
To approve the merger, the Justice Department required that the combined company agree to certain rules. One was that Ticketmaster wasn’t allowed to force venues to sign ticketing deals by threatening to deny them access to Live Nation tours. They couldn’t say, “If you don’t use Ticketmaster, you’re not getting X-Y-Z tours next year.”
But a few years ago, the Justice Department investigated and found that Ticketmaster had in fact done this a number of times.
And at the hearing this week, the C.E.O. of rival ticketing service SeatGeek testified that when they pitch their services, venues will be impressed with their proposal, but say that they’re worried about losing concerts if they drop Ticketmaster. Senator Klobuchar said that this is the definition of monopoly — that Live Nation doesn’t even need to exert pressure, and people just fall in line.
How do artists feel about this? Could they just sell their own tickets?
Nearly 30 years ago, Pearl Jam sued Ticketmaster, which the band said had a monopoly on concert tickets. They tried to book a tour without Ticketmaster, but it was a challenge for them to find venues to play outside the Ticketmaster ecosystem. They eventually abandoned the fight and came back to Ticketmaster.
For very large artists, it could be possible. Taylor Swift sells her own merch; maybe she could sell tickets too? But there is a status quo built into the marketplace for live music: An artist goes out and makes a deal with a promoter to put on a show, the promoter finds a venue for the show to happen, and the venue has a deal with a ticketing system for everyone who performs there. It’s not easy to change, especially when one big player controls multiple parts of it.
Back in 2018, we reported that Ticketmaster handles 80 of the top 100 U.S. venues. The company’s market share is a matter of debate, but it is still very high.
What might come after the Senate hearing?
It’s unclear. If the Justice Department does seek to break up the company, it would be a very big deal. Even though the senators were united in their displeasure about the power that Live Nation Entertainment has, I think it’s an uphill battle to change the system.
For now, those who argue that Live Nation and Ticketmaster are a monopoly say that the company’s position in the market is so strong that they can fail Taylor Swift and other huge artists like Bad Bunny, and still not be fired. And when the next superstar artist goes on tour, they will have virtually no choice but to work with Ticketmaster.
Ben Sisario has written for The Times since 1998. His first live concert was Henry Mancini sometime in the early 1980s, with his parents.
For more
Barclays Center in Brooklyn switched from Ticketmaster to SeatGeek in October 2021. This month, it switched back to Ticketmaster.Senators deployed a lot of Taylor Swift puns during the hearing. Here are the best ones, according to Slate.

Trả lời

Điền thông tin vào ô dưới đây hoặc nhấn vào một biểu tượng để đăng nhập: Logo

Bạn đang bình luận bằng tài khoản Đăng xuất /  Thay đổi )

Twitter picture

Bạn đang bình luận bằng tài khoản Twitter Đăng xuất /  Thay đổi )

Facebook photo

Bạn đang bình luận bằng tài khoản Facebook Đăng xuất /  Thay đổi )

Connecting to %s