Throughout the pandemic, many of us missed the opportunity to see our favorite musicians, sports teams, theater productions, and stand-up comedians. Now that live events are finally coming back, Americans are being reminded of the difficulties and annoyances associated with getting tickets. The reality is that there are many things broken when it comes to live event ticketing, and it’s only going to get worse unless Washington lawmakers and regulators step in with a fix.
Many ticketing problems stem from practices by companies in the event and ticketing business aimed at cornering as many of the tickets into their own inventory and away from competing companies. For fans, it leads to confusion, being kept in the dark about when and how many tickets will be made available to purchase, and being denied entry by some venues simply because the fan bought their tickets from another company after it had already been sold by the box office or the venue’s contracted ticket seller. It all results in fan frustration and higher prices.
President BidenJoe BidenPressure grows for breakthrough in Biden agenda talks State school board leaves national association saying they called parents domestic terrorists Sunday shows preview: Supply chain crisis threaten holiday sales; uncertainty over whether US can sustain nationwide downward trend in COVID-19 cases MORE recently announced plans to promote competition and protect the American public by cracking down on corporate monopolies and their anticompetitive practices. The administration and Congress should include the ticketing industry on this agenda.
Consider that Live Nation, which merged with Ticketmaster in 2010, enjoys a 70% market share of the concert ticket market in the U.S. and provides ticket distribution for 80 percent of stadiums and arenas across the country. The company dominates many sectors of the live events industry, including artist management, music concerts, ownership or management of venues including the installation of proprietary ticket scanning hardware at stadiums and arenas, ticket sales, and ticket resale. As one analyst reported last year, “The company operates an impenetrable moat that has a monopoly-like structure. Live Nation has long-term contracts with two fragmented markets that are interdependent: talent and venues.”
Because of its artist and concert management business, and despite a prohibition in its DOJ-approved 2010 merger consent agreement designed to preserve and promote ticket competition, Live Nation remains capable of strong-arming venues with the threat of starving them and their fans of popular concerts.
It’s not a theoretical concern. In a 2019 court filing, Justice Department officials said they had identified numerous instances where Live Nation threatened venues with making access to concerts a condition of a Ticketmaster deal, and other instances where Live Nation “retaliated against venues by withholding live entertainment events because the venue chose not to contract with Ticketmaster.” A settlement included a fine, the appointment of an independent monitor to investigate and report on Live Nation’s behavior, and a five-year extension to the merger consent agreement. Let’s face it; companies that abide by merger consent agreements do not suffer such consequences.
Consumers are harmed and competition is curtailed through various practices that impact tickets from before they go on sale to the day of the event. It is often through technologies presented as a way to help fight fraud, but instead make it difficult or impossible for consumers to find and buy tickets and to transfer or resell their purchased tickets if they wish.
Hundreds of fans holding genuine tickets for a 2019 show in Los Angeles were turned away when their app-based tickets failed to scan. This failure was not the result of a glitch — it was deliberate, to invalidate tickets bought from a source other than Ticketmaster. Such behavior is prohibited by law in several states, but not in California and not yet at the federal level.
Ticket “hold backs” and “slow ticketing” are two other practices that deceptively create a false sense of scarcity, leaving consumers in the dark about the true supply of tickets for an event and whether more tickets will be released later, thus manufacturing a purchasing frenzy at artificially higher prices. Reports have revealed that it is common for 40 or 50 percent of tickets to be secretly held back for high-demand events, but then slowly dripped onto the market. Meanwhile, consumers mistakenly believe the tickets were snatched up by scalpers when in fact the tickets never went on sale in the first place.
The Biden administration and congressional lawmakers can improve the ticketing market for consumers and provide a more level playing field for ticketing companies to compete against one another. Federal legislation was proposed last year following similar laws in several states to protect a fundamental principle: the freedom of ticketholders to transfer, give away, or resell their tickets. The BOSS Act, which includes broad pro-consumer and pro-market competition provisions, should be reconsidered and passed swiftly. With live events back, Washington should not miss this opportunity to fix what is broken in live event ticketing.
Mark J. Perry is a senior fellow at the American Enterprise Institute and professor of economics emeritus at the University of Michigan.