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Analysis | Taylor Swift can stop beating Ticketmaster

Remark

You’d think Taylor Swift would be happy with the way her 52-date ‘Eras ​​Tour’ has kicked off.

In November, Ticketmaster sold some 2 million tickets to Swift’s shows in one day in a presale for registered fans, a worldwide record. Thanks to a huge increase in traffic – including from bots and brokers – fans reported delays and error messages, while the resulting lack of inventory led the company to cancel a sale to the general public. Still: this was the strongest demand for a concert series in history. Some hiccups could certainly be forgiven.

Not so. Swift said it was “unbearable for me to watch mistakes happen with no recourse.” At a Senate Judiciary Committee hearing on Tuesday, lawmakers battled for most disdain for Ticketmaster, which merged with promotional company Live Nation Entertainment Inc. in 2010.

You don’t have to love Ticketmaster to wonder exactly how that would help.

While Ticketmaster still dominates the industry, it’s not lacking in competition. According to Bloomberg Second Measure, by 2022 it will account for about 65% of US sales at the major ticketing platforms. Yet that’s less than 80% at the time of the merger, thanks to the growing rivalry of companies such as EventBrite Inc., SeatGeek Inc., StubHub Inc., Vivid Seats Inc. and others.

Moreover, such dominance is not in itself illegal. One of the reasons Ticketmaster has this market share is that it offers an attractive service. It has unparalleled reach, (mostly) reliable technology, integrated marketing tools, and a wealth of useful data and analytics. In fact, Swift chose to use Ticketmaster for this tour, even though her promoter is AEG Presents – a direct rival with his own ticketing company, AXS. “Even our competitors want to get on our platform,” says a prominent shareholder.

Please also note that Ticketmaster does not set prices. The base price of a ticket is negotiated by artists, agents and promoters, all of whom want to maximize profits without alienating fans. Ticketmaster’s dynamic pricing system allows that figure to fluctuate in response to demand, within a predetermined band (between $49 and $499, in Swift’s case). This approach frees up the market in a way that hurts scalpers, who would otherwise collect larger markups, and helps executors, who reap more of the value of their labor — some $550 million so far by 2022, the company says.

It’s fair to say that the ticket prices seem too high. But the reason isn’t a lack of competition; there is an abundance of demand for limited seats at top level live events. Breaking up Ticketmaster wouldn’t change that dynamic. By undermining the many efficiencies the company has created, it could make artists and their fans worse off.

This is not to say that the trade in concert tickets is pristine. Opaque fees, for example, are a scourge; Congress should require sellers to show an all-inclusive price in advance. It should also crack down on bots and other deceptive practices. For its part, the Justice Department must ensure that Live Nation adheres to the terms of a 2020 consent decree and does not unduly pressure venues to use Ticketmaster.

As for Swift? If she really feels sorry for the lost fans, she can add shows, book bigger venues or extend her tour. She could record performances for broadcast audiences or livestream them online. It’s more likely she shrugs it off.

The editors are members of the Editorial Board of Bloomberg Opinion.

More stories like this are available at bloomberg.com/opinion

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