November 15, 2022, was a disastrous day for millions of Americans. They woke up, logged online, and received poor customer service. These people were eager to get concert tickets but were met with service outages and site crashes. Of course, this is nothing new, so what made this day different?
The victims were Swifties. Tickets were on sale for Taylor Swift’s Eras tour, and demand far outweighed supply.
But, let’s not oversimplify the issue. The average ticket price for the show was estimated at $215, and that’s before we look at resale costs. Approximately 14 million people waited for tickets, but 2.4 million tickets were sold. By nature, many people will be upset, but the day was plagued with technical issues. Potential customers spent hours in virtual queues just to lose their place or face crashes. Those who did get tickets were faced with sticker shock but had to settle for high prices. And this was all on the presale day, which exhausted supplies so much that general public sales were canceled.
Or, in the words of Taylor, fans went through “multiple bear attacks” to secure tickets. She wishes things were different, but they weren’t, so she’s not going to do anything about it. Why? Because Ticketmaster fundamentally has a monopoly.
What’s wrong with Ticketmaster?
There’s a clear tipping point when it comes to Ticketmaster’s grip on the music industry: Its 2010 merger with Live Nation.
Prior to this time, Live Nation was primarily in the business of promoting concerts, and would often outsource business to Ticketmaster. Then, in 2008, Live Nation stopped using Ticketmaster in favor of its own sales platform, and of course, Ticketmaster didn’t want this competition.
When the two giants merged to form Live Nation Entertainment (LNE), it seemed like a business move that made sense—and pushed competition out of the market. Live Nation uses its relationships to secure venues, and Ticketmaster sells the tickets. What could go wrong?
Well, the Department of Justice worried Ticketmaster’s stronghold on the market would become a reality, but despite this, the merger was approved. There were some conditions, like selling software and another ticketing firm owned by Ticketmaster, to create competition in the market.
Despite this, few companies can actually compete with Ticketmaster, but LNE swears it doesn’t violate any anti-trust laws. An estimated 70% of ticketing for live events is done through LNE, and for big artists like Taylor Swift, it’s the only realistic option. Live Nation controls the vast majority of large venues in the US (and many outside of the country). So if you’re boycotting LNE, you’re playing much smaller crowds.
The cost of your ticket
When you buy a ticket through Ticketmaster, the price advertised isn’t the price you pay. After making your selection, be prepared to see fees — lots of them.
Some people have paid as much as 78% of the ticket’s advertised cost in additional fees, though you’re estimated to pay an average of about 28% of the ticket’s face value. They’re often called “service fees,” “processing fees,” or (perhaps the most infuriating) “convenience fees.” Other fees can pop out of the blue, like a “printer fee” to print your ticket at home.
You can find explanations for these fees, but at their best, they’re a frustrating component of purchasing tickets. At their worst, they’re deceptive; to the point that Ticketmaster paid millions of customers because of the lack of transparency.
Despite being charged all these fees, ticket partnerships are another method of Ticketmaster squeezing profit out of concert tickets and making them prohibitively difficult to get. A partnership with Spotify has reserved access to “top fans,” a fairly innocent idea that could get tickets into the hands of people who want to see the artist. Then, there are partnerships with credit cards. People can get presale access by entering credit card info, like Capitol One customers during the Eras tour. This serves to reduce transaction fees for LNE shows but reserves a percentage of the tickets for fans who use a specific credit card.
Each step of the ticket-buying process has a cost associated with it. Someone’s going to pay, and LNE will do anything in its power to make sure it’s someone else. Whether that means piles of fees for the customers or shortening supplies through brand deals, money will come in.
But the artists love it
Taylor Swift may be apologizing for the struggles to get tickets to her shows, but she’s a smart businessperson. Even though she makes money recording music (which is more than some artists can say), the real money comes from concerts. It’s not enough to have fans consume your music, because few people buy it, and streaming is far less lucrative than other revenue methods, including touring.
Of course, no one knows this better than Live Nation itself, and the brand manages hundreds of artists, requiring them to perform exclusively at its venues. Given the fact that LNE has so little competition, it can get away with some hefty price tags for tickets.
So, LNE applies fees to increase profits and partners with brands to reduce transaction fees, but that’s not enough. Now, Ticketmaster is using “dynamic pricing” to squeeze more dollars out of consumers. This system uses an algorithm to determine when demand for tickets is the highest so prices can increase to reflect the demand (like surge pricing on Uber).
So, when there’s a huge queue, demand is obviously going to be high. Fans can wait for hours, and if they’re lucky enough to get through, they’ll find tickets at their highest costs. They’ll need to settle for these prices if they want to see the show, and this isn’t just at Taylor Swift’s Eras tour. Earlier in 2022, Bruce Springsteen tickets inflated to $5,000, and this is before resales.
Of course, artists will attempt to empathize with fans when they’re frustrated, but they’re crying all the way to the bank. By fattening the bottom line of ticket prices, the artists are increasing their paychecks and their potential to earn more on the next tour.
Can artists rebel?
A lot of music fans want to believe their favorite acts are different and don’t want to milk concertgoers for every dollar. In reality, few have tried to rebel and none have seen massive success.
Most notably Pearl Jam fought back against Ticketmaster in the mid-90s. The band wanted to reduce ticket fees to make them more affordable for fans (they also could have reduced their appearance fee, but tried to take on Ticketmaster instead). The band tried to appear at venues that weren’t using Ticketmaster, but this effectively forced them into smaller venues. At the time, these spaces weren’t adequate for Pearl Jam’s crowds, and the band gave up.
Artists are free to seek alternate methods of selling tickets, but this isn’t really feasible in most cases. Pearl Jam couldn’t bypass the fees (though they did help pass a bill that required more transparency), and this was before the Live Nation merger. Now, any band that wants to play moderately sized audiences will need to deal with Ticketmaster and its antics.
Is there any winning?
If you’re a fan of a popular artist in 2022 and would like to see them live, Ticketmaster has left you with two options: don’t and debt.
Taylor Swift set the internet ablaze, as the Eras tour’s presale seemed to be a culmination of every issue Ticketmaster has to offer, but she’s not the only artist with controversy in 2022. We saw fans complain of price gouging for Bruce Springsteen, blink-182, and Harry Styles, and this is before resellers and bots enter the picture.
As customers fought to get tickets, they were frustrated for several reasons, but they all happened because no one will challenge Ticketmaster. Realistically, it’s the only option for large venues, and big artists need to accept its terms if they want to perform at these places.
Artists might hear your frustrations, but they also see big checks coming in. The artists who work with LNE will continue to get big paydays, pass fees onto customers, and secure brand partnerships that add more marketing dollars to the pot. Meanwhile, fans sit in queues for hours as ticket prices surge.
Some people will call this a broken system, but clearly, it’s working pretty well for Ticketmaster. It would take a massive artist to make any type of change to this process, but there aren’t reasonable venues and vendors who can compete with LNE. Without this, Ticketmaster will keep charging customers, artists will keep getting paid, and concerts will remain unobtainable for many fans.
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