SWIFT: Senators grilled Ticketmaster on Tuesday, questioning whether the company’s dominance in the ticketing industry contributed to the company’s spectacular failure last year during the sale of Taylor Swift concert tickets.
Republicans and Democrats on the Senate Judiciary Committee also discussed potential legislation, such as making tickets non-transferable to reduce scalping and requiring greater transparency in ticket fees. Some speculated that it is also necessary to split Ticketmaster and Live Nation, a concert promoter based in Beverly Hills, California, which merged in 2010.
“The fact of the matter is, Live Nation/Ticketmaster is the 800-pound gorilla here,” Connecticut Democrat Richard Blumenthal said. “The entire concert ticket system is a monopolistic mess.”
Ticketmaster is the world’s largest ticket seller, processing 500 million tickets in over 30 countries yearly. According to data from a federal consumer lawsuit last year, Ticketmaster sells roughly 70% of tickets for major concert venues in the United States.
Swift Was The Breaking Point For Ticketmaster
Ticketmaster’s website crashed mid-November during a presale event for Swift’s upcoming stadium tour. According to the company, its site was overwhelmed by both fans and bot attacks posing as customers to scoop up tickets and sell them on secondary sites. Thousands of people lost their tickets after spending hours in an online line.
On Tuesday, Live Nation President and Chief Financial Officer Joe Berchtold apologized to fans and Swift, saying the company needs to do better. Berchtold claims that Ticketmaster has spent swift $1 billion in the last decade to improve security and combat bots.
“We need to and will do better,” he stated.
However, lawmakers were skeptical. Republican Sen. Marsha Blackburn of swift, Tennessee said that many other organizations, including banks and power companies, are frequently targeted by bots but do not experience service disruptions.
“How come they figured it out, but you haven’t? “This is incredible,” she exclaimed. “Many people are very unhappy with how this has been handled.”
Senators Criticized Ticketmaster Fees
Senators also criticized Ticketmaster’s fees. Amy Klobuchar, a Democrat from Minnesota, recalled piling into a friend’s car in high school to attend concerts by Led Zeppelin, The Cars, and Aerosmith. She claims that ticket prices have risen, so many fans can no longer afford to attend concerts. Klobuchar stated that ticket fees now average 27% of the ticket price and can reach 75%.
Berchtold insisted that Ticketmaster does not set ticket prices or service fees nor determines how many tickets will be sold. Venues determine service fees, he says. According to him, Live Nation owns only about 5% of the venues in the United States.
However, competitors such as Seat Geek CEO Jack Groetzinger claim that even if Live Nation does not own a venue, it prevents competition by signing multi-year contracts to provide ticketing services to arenas and concert halls. Live Nation may withhold acts if those venues do not agree to use Ticketmaster. As a result, competitors will need help to disrupt the market.
“Breaking up Ticketmaster and Live Nation is the only way to restore competition,” Groetzinger said.
Clyde Lawrence, a singer-songwriter with the New York-based pop group Lawrence, believes that when Live Nation owns or has contracts with venues, it limits bands’ ability to negotiate a deal or choose a different ticket seller.
Fees On Top Of Fees For Ticketmaster Customers
Lawrence gave an example: Ticketmaster charges $30 for a ticket but then adds fees that raise the price to $42. After deducting the fees they must pay to Live Nation, the band receives only $12 per ticket, including $250 for a stack of 10 towels in the dressing room in at least one case.
Lawrence wants fee caps, more transparency in how venue fees are used, and more equitable distribution of profits. Live Nation, for example, takes a cut of the band’s merchandise sales at a concert but does not share a cut of food and beverage sales.
Berchtold said the ticketing industry wants lawmakers to focus on the problem of ticket scalping, which he claims has grown into a $5 billion industry, and prohibit fraudulent practices like resellers selling tickets that have yet to officially go on sale. He also agreed that the industry’s fees should be more transparent.
Sen. John Kennedy, a Republican from Louisiana, proposed legislation that would make tickets non-transferable, preventing resale. He also proposed that major artists like Taylor Swift and Bruce Springsteen demand fee caps.
“Not every kid can afford to see Taylor Swift for $500,” Kennedy explained.
No One Can Afford Those Prices
According to Berchtold, despite its involvement in the ticket resale market, Ticketmaster would support making tickets non-transferable. Others, including North Carolina Republican Sen. Thom Tillis, said making tickets non-transferable would infringe on people’s right to resell them.
The Justice Department approved the merger of Live Nation and Ticketmaster in 2010 on the condition that Live Nation agree not to retaliate against concert venues for using other ticket companies for ten years.
In 2019, the department investigated and discovered that Live Nation had “repeatedly” violated the agreement. It extended the ban on retaliation against concert venues until 2025.
Sen. Mike Lee, a Republican from Utah, announced Tuesday that the Justice Department is re-investigating Live Nation following the Swift ticket debacle. At this point, he believes Congress should question whether the department was correct to allow the merger to proceed in the first place.
“We must keep fair, free, open, and even fierce competition,” Lee swift said. “It improves quality while decreasing cost. We want those things to occur.”
SOURCE – (AP)
