You’d think Taylor Swift would be happy with the way her 52-date “Eras Tour” has gotten underway.
In November, in a presale for registered fans, Ticketmaster sold some 2 million tickets for Swift’s shows in a single day, a global record. Thanks to a huge surge in traffic — including from bots and brokers — fans reported delays and error messages, while the resulting lack of inventory led the company to cancel a sale to the general public. Even so: This was the strongest demand for a concert series in history. Surely some hiccups could be forgiven.
Not so. Swift said it was “excruciating for me to just watch mistakes happen with no recourse.” At a hearing of the Senate Judiciary Committee on Tuesday, lawmakers competed to express the most disdain for Ticketmaster, which merged with the promotional company Live Nation Entertainment Inc. in 2010. The resulting colossus, several senators maintained, needs to be broken up.
One doesn’t have to love Ticketmaster to wonder exactly how that would help.
Although Ticketmaster still dominates the industry, it doesn’t lack for competition. It accounted for about 65% of US sales among major ticketing platforms in 2022, according to Bloomberg Second Measure. Yet that’s down from more than 80% at the time of the merger, thanks to growing rivalry from companies such as EventBrite Inc., SeatGeek Inc., StubHub Inc., Vivid Seats Inc. and others.
Such dominance, moreover, isn’t unlawful on its own. One reason Ticketmaster commands this market share is that it offers an appealing service. It has unrivaled reach, (usually) reliable technology, integrated marketing tools, and a wealth of useful data and analytics. In fact, Swift elected to use Ticketmaster for this tour even though her promoter is AEG Presents — a direct rival with its own ticketing business, AXS. “Even our competitors want to come on our platform,” says one prominent shareholder.
Bear in mind, too, that Ticketmaster doesn’t set prices. The base cost of a ticket is negotiated by artists, agents and promoters, all of whom want to maximize profits without alienating fans. Ticketmaster’s dynamic pricing system allows that figure to fluctuate in response to demand, within a predetermined band (between $49 and $499, in Swift’s case). This approach clears the market in a way that hurts scalpers, who’d otherwise collect bigger markups, and helps performers, who capture more of the value of their labor — some $550 million so far in 2022, the company says.
It’s fair to say that ticket prices seem too high. But the reason isn’t a lack of competition; it’s a surfeit of demand for limited seats at top-tier live events. Breaking Ticketmaster up would do nothing to change that dynamic. By eroding the many efficiencies the firm has created, it could well make artists and their fans worse off.
This isn’t to say the concert-ticket business is pristine. Opaque added-on fees are a plague, for instance; Congress should mandate that sellers display an all-in price upfront. It should also crack down on bots and other deceptive practices. For its part, the Justice Department must ensure that Live Nation abides by the terms of a 2020 consent decree and doesn’t unlawfully pressure venues into using Ticketmaster.
As for Swift? If she really feels bad for fans who lost out, she can add shows, book larger venues or extend her tour. She could record performances for broadcast audiences or livestream them online. More likely, she’ll shake it off.
— Bloomberg Opinion
