In the wake of widespread problems around Taylor Swift and Bruce Springsteen tour on-sales, U.S. Senator Amy Klobuchar, chair of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, has written a letter to Ticketmaster raising concern about the lack of competition in the ticketing industry and the service it provides to consumers.
Widespread complaints about astronomical prices, long wait times and crashing computer servers plagued the first day of ticket sales for Swift’s 2023 tour on Tuesday, further rocking an industry that has been saddled with accusations of problematic business practices for many years. Ticketmaster, which is by far the dominant ticketing business in the country, has been particularly criticized.
“I write to express serious concerns about the state of competition in the ticketing industry and its harmful impact on consumers. Reports about system failures, increasing fees, and complaints of conduct that violate the consent decree Ticketmaster is under suggest that Ticketmaster continues to abuse its market positions,” Klobuchar (D-Mn.) wrote to Michael Rapino, president and CEO of Ticketmaster’s parent company, Live Nation.
“Ticketmaster’s power in the primary ticket market insulates it from the competitive pressures that typically push companies to innovate and improve their services. That can result in the types of dramatic service failures we saw this week, where consumers are the ones that pay the price,” Klobuchar’s letter continued. (The full text of the letter appears below.)
Such open letters to Ticketmaster’s executives are nothing new: Rep. Bill Pascrell (D-N.J.) and other Congresspeople have criticized the company multiple times in recent years, most recently over its “dynamic pricing” model, which led to astronomical prices on the initial dates for a 2023 tour by Bruce Springsteen, one of Pascrell’s state’s most treasured artists.
But Klobuchar’s chair position and history with the live entertainment industry 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 relief to independent music venues and theaters, and in April 2020, she and Senators Richard Blumenthal (D-CT) and Cory Booker (D-NJ) urged the Department of Justice Antitrust Division to take action to ensure small and independent venues can compete on a level playing field in the live entertainment marketplace.
In August 2019, Klobuchar and Blumenthal called on the DOJ Antitrust Division to investigate the state of competition in the ticketing marketplace, given news reports that Ticketmaster-Live Nation was not adhering to the conditions of the antitrust consent decree governing its merger.
While reps for Ticketmaster did not immediately respond to requests for comment given the early hour of the letter’s release, a company rep’s response to Pascrell in September stated in part, “We appreciate and share Congressman Pascrell’s passion for improving the ticketing industry and look forward to continuing our dialogue with him. As the resale ticketing market has grown to more than a $10 billion dollar industry over the past few years, artists and teams have lost that revenue to resellers who have no investment in the event going well or any of the people working behind the scenes to bring the event to life. As such, Event Organizers have looked to market-based pricing to recapture that lost revenue.”
While many of the problems experienced by hopeful concertgoers around the Swift and Springsteen on-sales are to be expected when demand exponentially outweighs availability and a computer system experiences unprecedented activity, there is little question that the ticketing industry is among the most 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 the ticketing industry and its harmful impact on consumers. Reports about system failures, increasing fees, and complaints of conduct that violate the consent decree Ticketmaster is under suggest that Ticketmaster continues to abuse its market positions.
Ticketmaster and LiveNation dominate the live entertainment supply chain with powerful positions in primary ticketing, secondary ticketing, concert promotion, artist management, tour sponsorships, and event venue operation. Ticketmaster’s power in the primary ticket market insulates it from the competitive pressures that typically push companies to innovate and improve their services. That can result in dramatic service failures, where consumers are the ones that pay the price.
I have been skeptical of the combination of these companies since you merged in 2011, when the Senate held a hearing into the merger. At that hearing, you appeared as a witness and pledged to “develop an easy-access, one-stop platform that can deliver … tickets.” And you said that you were “confident this plan will work.” It appears that your confidence was misplaced.
When Ticketmaster merged with Live Nation in 2010, it was subject to an antitrust consent decree that prohibited it from abusing its market position. Nonetheless, there have been numerous complaints about your company’s compliance with that decree. I am concerned about a pattern of non-compliance with your legal obligations.
I look forward to your response to these questions, which I would appreciate receiving 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 the general public compared to those allocated to pre-sales, radio stations, VIPs, and other restricted sales opportunities? Please provide specific recent examples.
Ticketmaster has been repeatedly accused of violating the requirements of its consent decree with the Department of Justice. Is Ticketmaster aware of any complaints that have been made to it or to government agencies about potential noncompliance with the consent decree in the last twelve months? If so, please provide details about each alleged incident.
In the last twelve months, how much have you invested in upgrading your systems to address demand surges, and specifically, what improvements did those investments generate?
In the last three years, has the Ticketmaster Board of Directors received information about decree compliance? If so, please provide copies of any materials provided to any Board member on this topic.
Thank you for your attention to this important matter.