In the wake of widespread problems around Taylor Swift and Bruce Springsteentour on-sales, US Senator Amy Klobuchar, chair of the Senate JudiciarySubcommittee on Competition Policy, Antitrust, and Consumer Rights, haswritten a letter to Ticketmaster raising concern about the lack of competitionin the ticketing industry and the service it provides to consumers.
Widespread complaints about astronomical prices, long wait times and crashingcomputer servers plagued the first day of ticket sales for Swift’s 2023 touron Tuesday, further rocking an industry that has been saddled with accusationsof problematic business practices for many years. Ticketmaster, which is byfar the dominant ticketing business in the country, has been particularlycriticized.
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“I write to express serious concerns about the state of competition in theticketing industry and its harmful impact on consumers. Reports about systemfailures, increasing fees, and complaints of conduct that violate the consentdecree Ticketmaster is under suggest that Ticketmaster continues to abuse itsmarket positions,” Klobuchar (D-Mn.) wrote to Michael Rapino, president andCEO of Ticketmaster’s parent company , Live Nation.
“Ticketmaster’s power in the primary ticket market insulates it from thecompetitive pressures that typically push companies to innovate and improvetheir services. That can result in the types of dramatic service failures wesaw this week, where consumers are the ones that pay the price,” Klobuchar’sletter continued. (The full text of the letter appears below.)
Such open letters to Ticketmaster’s executives are nothing new: Rep. BillPascrell (DN.J.) and other Congresspeople have criticized the company multipletimes in recent years, most recently over its “dynamic pricing” model, whichled to astronomical prices on the initial dates for a 2023 tour by BruceSpringsteen, one of Pascrell’s state’s most treasured artists.
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But Klobuchar’s chair position and history with the live entertainmentindustry bring a new element to the situation. She was a key leader in the“Save Our Stages” campaign that brought $16 billion in federal pandemic reliefto independent music venues and theaters, and in April 2020, she and SenatorsRichard Blumenthal (D-CT) and Cory Booker (D-NJ ) urged the Department ofJustice Antitrust Division to take action to ensure small and independentvenues can compete on a level playing field in the live entertainmentmarketplace.
In August 2019, Klobuchar and Blumenthal called on the DOJ Antitrust Divisionto investigate the state of competition in the ticketing marketplace, givennews reports that Ticketmaster-Live Nation was not adhering to the conditionsof the antitrust consent decree governing its merger.
While reps for Ticketmaster did not immediately respond to requests forcomment given the early hour of the letter’s release, a company rep’s responseto Pascrell in September stated in part, “We appreciate and share CongressmanPascrell’s passion for improving the ticketing industry and look forward tocontinuing our dialogue with him. As the resale ticketing market has grown tomore than a $10 billion dollar industry over the past few years, artists andteams have lost that revenue to resellers who have no investment in the eventgoing well or any of the people working behind the scenes to bring the eventto life. As such, Event Organizers have looked to market-based pricing torecapture that lost revenue.”
While many of the problems experienced by hopeful concertgoers around theSwift and Springsteen on-sales are to be expected when demand exponentiallyoutweighs availability and a computer system experiences unprecedentedactivity, there is little question that the ticketing industry is among themost problematic in the entertainment business.
Full text of the letter appears below:
Dear mr. Rapino:
I write to express serious concerns about the state of competition in theticketing industry and its harmful impact on consumers. Reports about systemfailures, increasing fees, and complaints of conduct that violate the consentdecree Ticketmaster is under suggest that Ticketmaster continues to abuse itsmarket positions.
Ticketmaster and LiveNation dominate the live entertainment supply chain withpowerful positions in primary ticketing, secondary ticketing, concertpromotion, artist management, tour sponsorships, and event venue operation.Ticketmaster ‘s power in the primary ticket market insulates it from thecompetitive pressures that typically push companies to innovate and improvetheir services. That can result in dramatic service failures, where consumersare the ones that pay the price.
I have been skeptical of the combination of these companies since you mergedin 2011, when the Senate held a hearing into the merger. At that hearing, youappeared as a witness and pledged to “develop an easy-access, one-stopplatform that can deliver … tickets.” And you said that you were “confidentthis plan will work.” It appears that your confidence was misplaced.
When Ticketmaster merged with Live Nation in 2010, it was subject to anantitrust consent decree that prohibited it from abusing its market position.Nevertheless, there have been numerous complaints about your company ‘scompliance with that decree. I am concerned about a pattern of non-compliancewith your legal obligations.
I look forward to your response to these questions, which I would appreciatereceiving by November 23, 2022.
1. Are you still “confident” that your plan to develop an “easy-access, one-stop platform” that will be a “trusted business partner” is working?
Typically, what percentage of high profile tour tickets are available to thegeneral public compared to those allocated to pre-sales, radio stations, VIPs,and other restricted sales opportunities? Please provide specific recentexamples.
Ticketmaster has been repeatedly accused of violating the requirements of itsconsent decree with the Department of Justice. Is Ticketmaster aware of anycomplaints that have been made to it or to government agencies about potentialnoncompliance with the consent decree in the last twelve months? If so, pleaseprovide details about each alleged incident.
In the last twelve months, how much have you invested in upgrading yoursystems to address demand surges, and specifically, what improvements didthose investments generate?
In the last three years, has the Ticketmaster Board of Directors receivedinformation about decree compliance? If so, please provide copies of anymaterials provided to any Board member on this topic.
Thank you for your attention to this important matter.
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