Promoting a live performance ticket needs to be straightforward. At its essence, a ticket is a contract between you and a promoter that enables you entry to a selected venue at a said date and time to see a efficiency. In different phrases, it’s a factor you purchase to get you within the door. But promoting and shopping for live performance tickets is likely one of the most opaque shopper experiences within the identified universe.
Misinformation, frustration, and ignorance about how the system works — and must work — have created a state of affairs the place followers and governments are fed up and need one thing completed about it. Good luck with that.
The most recent salvo is an antitrust lawsuit filed by the U.S. Division of Justice towards Stay Nation, the proprietor of Ticketmaster, accusing the corporate of being imply, monopolistic and utilizing unlawful ways to stifle competitors. (Stay Nation’s response to the lawsuit may be discovered on livenationentertainment.com.)
On the coronary heart of the lawsuit are 4 fundamental issues:
- Stay Nation is just too massive and too highly effective. It bought that approach by utilizing Ticketmaster and a sequence of unique ticketing contracts with venues.
- Stay Nation has an unfair benefit over rivals due to its management of excursions and the 250+ venues it owns.
- These circumstances allowed Stay Nation to take care of a de facto monopoly over the ticketing enterprise, permitting it to boost costs and costs.
- Ticketmaster’s dominance limits innovation within the ticketing business, harming would-be rivals and driving up costs.
Stay Nation is actually very, very massive, due to the 2010 merger with Ticketmaster, one thing that was permitted by the US Authorities. Final 12 months alone, the corporate promoted 50,059 reveals globally, a brand new report. Ticketmaster sells about 500 million tickets a 12 months, and about 70 per cent of all tickets bought to main live performance venues are processed via Ticketmaster, in response to knowledge in a federal lawsuit filed by customers in 2022.
And sure, the value of tickets has skyrocketed lately. And there’s no query the added charges and repair costs are annoying. However breaking apart Stay Nation isn’t going to alter any of that.
Earlier than you name me a Stay Nation/Ticketmaster apologist, let’s take a look at some chilly, onerous, irrefutable information about live performance tickets. You could not like what you’re about to learn, however that is the real-world state of affairs.
First, when setting the value of a live performance ticket, the buck all the time stops with the artist. An artist’s supervisor and agent will strategy Stay Nation (or any promoter for that matter) and say, “We need to go on tour. Our prices are projected to be X and we’d prefer to make a revenue of Y. What number of tickets do we have to promote at what value in what number of cities to make that occur?”
Stay Nation then plugs every thing right into a spreadsheet and comes up with a break-even quantity after which tiers of ticket costs that may make the tour worthwhile for the artist. Prices and expectations are adjusted earlier than the artist indicators off. Once more the singer/band has the ultimate say on how a lot tickets will price at face worth.
As soon as that’s labored out, Ticketmaster is used to promote the tickets. It provides a payment (normally a share of the face worth), which covers all its prices (consider the infrastructure and know-how required!) and permits it to make a revenue. Ticketmaster is, in spite of everything, a enterprise unto itself. And except for the odd glitch — hey, each web site goes down now and again as a result of no know-how is ideal — Ticketmaster is excellent at promoting tickets. Given the amount it offers with 24/7/365, nobody does it higher.
What in regards to the venue or facility payment? This cash covers the prices incurred by the venue (electrical energy, safety, and so on.) and to make a little bit of a revenue. These charges make it economically attainable for a constructing to host a live performance. No charges, no reveals. Would you do all the required work without cost?
Having these charges separate from the face worth of the live performance ticket makes the act look good. It makes them seem that they’re on the facet of the followers and large, dangerous Ticketmaster and Stay Nation are liable for any monetary ache on the a part of the fan. And when one thing goes mistaken — keep in mind the Taylor Swift Eras Tour debacle? — the blame falls on Ticketmaster and Stay Nation and never the act.
There have been calls for for all-in pricing. Not that way back, airways used to promote fares that appeared insanely low as a result of they didn’t embody all of the taxes and repair costs. By the point you bought your ticket, it might have been twice the marketed value. Now not. Airways should give travellers the true value of the ticket with every thing baked in. Within the music world, many artists have balked at this as a result of they need to make it appear like the excessive value of the ticket isn’t their fault.
What about Ticketmaster’s unique contracts (usually 5 years or so in size) with venues? This isn’t a lot totally different than a venue signing unique pouring rights with a brewery or a smooth drink firm. Margins may be so skinny that venues need actually and stability from their suppliers. Ticketmaster is simply one other provider.
What about Stay Nation’s vertical construction? Stay Nation books and promotes the reveals that are bought via its Ticketmaster subsidiary with some gigs taking place in Stay Nation-owned venues. On the floor, that does look fairly monopolistic. Nevertheless it’s additionally extremely environment friendly. If every thing is finished in-house, you possibly can maintain prices decrease.
And once more, neither Stay Nation nor Ticketmaster set the face worth of the live performance ticket. And since many artists are given a assured per-show payout by Stay Nation, the promoter assumes all the danger on the subject of placing bums in seats, the price of operating Ticketmaster to promote tickets, and, within the instances the place it owns the amphitheatre, membership, or theatre, to eke out a revenue for these buildings.
Did I point out that the artist has the last word sign-off on the value of tickets? I did? Simply need to be sure.
So let’s say that the DOJ orders that Stay Nation be damaged up. Ticketmaster must be bought off. It’s even attainable that Stay Nation might need to promote its stake within the venues it owns. Then what?
We might return to the previous days of a number of nationwide or regional promoters bidding on reveals. The quickest option to achieve an act’s consideration is to supply the most important assure. The profitable promoter will then be beneath monetary stress to cowl prices. The one approach to do this is to elucidate to the artist that they must cost extra per ticket if they need that massive assure. Ticket costs will go up, not down.
Stay Nation is enticing to artists as a result of it’s a one-stop-shop nationally and internationally. Certain, they might go along with one other promoter, however can they provide the identical phrases and performance-fee ensures? Possibly, however I’d guessing not. Ticketmaster has numerous income streams like sponsorships that assist defray prices and to spice up ensures.
Different firms could need to tackle Ticketmaster. Go proper forward. Innovation via competitors is all the time good. However turning into a competitor to Ticketmaster would require billions in funding in software program, infrastructure, and promotion/advertising of the brand new entity, all in an effort to get right into a low-margin enterprise. They may also have to attend out any exclusivity contracts Ticketmaster presently has in place with venues. When contracts come up, there’ll inevitably be bidding wars, the value of which shall be handed on to the buyer via larger facility charges. Once more, it will trigger ticket costs to go up.
Sure, it’s attainable that an ordered breakup of Stay Nation will assist different promoters and would-be ticket sellers. Any “monopolistic practices” shall be quashed, which can be good for the ticketing business. Possibly customer support — all the time a bugaboo with Ticketmaster — will enhance. Maybe somebody will give you one other option to simplify pricing that doesn’t require new legal guidelines being handed. Somebody may give you a option to successfully police the resale of tickets.
However who might purchase Ticketmaster? The associated fee could be very, very excessive, so it’s most likely a play by an fairness fund or another Wall Avenue building.
And can this handle the rising price of live performance tickets? No. Will this resolve the issue of one million folks attempting to purchase 100,000 accessible tickets leading to on the spot sellouts? No. Will it handle bigger financial points like inflation and the rising prices of staging a tour? No. Will followers’ unrealistic expectations (calls for!) of shopping for a superb seat to a high act for 50 bucks be realized? No.
What would be the benefit of a Stay Nation breakup to the buyer?
I can’t see any. Not one.
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Alan Cross is a broadcaster with Q107 and 102.1 the Edge and a commentator for World Information.
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