As this has been a massivetopic of conversation, given Zach Bryan chose to go through a non-Ticketmaster platform for his tour and the monopoly they have over the ticket sale industry highlighted during Taylor Swift’s tour sales, it’s refreshing seeing Childers do what he can to keep tickets at fair pricing.
Early commenters on the post were more than thankful for Childers taking control in efforts to keep pricing at face value. While face value for these high-demand shows will still cost a pretty penny (the cheapest face value tickets listed right now are almost $300 before fees), it hopefully at least keeps them within reach for real fans.
“I’m not even going, but thank you for doing this!! Resales are the exact reason we couldn’t go to the Charleston, SC, show…5 miles from my house.”
“Literally, God bless you.”
“Lead the way TimmyTy.”
“Done; next task should be the fees. $38 per ticket? Tyler is fixing the world!”
“Wish all artists would do this.”
“Love this. The price of tickets by resellers is insane. This is one way to stop it!”
It is beyond refreshing to see that highly respected artists in the space are pioneering the way for fair ticket sales.
There is still a long way to go on this topic, but Tyler Childers joining forces is a big step in the right direction.
Ticketmaster & Live Nation Control The Live Music Industry
But quite frankly, most of that coverage has been sparse on details, relying on anecdotal stories from fans who waited in queue for hours, paid an insane amount for tickets, or were booted before making a purchase when the entire system crashed.
There’s no denying those are all problems, however, I feel they don’t get to the core issue at hand; How exactly is Ticketmaster able to wield such a large amount of control over the live music industry?
This is my attempt to lay out how the company gained its power.
For starters, and as most people are now aware, Ticketmaster is owned by Live Nation, the largest music promotion company on the planet, but this was not always the case.
The two companies officially merged in 2010, creating the giant of Live Nation Entertainment. This merger raised a lot of concerns and some antitrust lawsuits, however, the Department of Justice reached a settlement with the companies, which put certain rules and regulations in place for the new company to remain in operation.
This article is not to convince you that ruling was incorrect. Honestly, I don’t know if Live Nation Entertainment is a monopoly, solely due to there not being “one industry” in the Live Music business, as you’ll soon see.
However, I strongly believe the company is able to act with, if not exceed, power historically attributed only to monopolies.
That is the root issue and this is where we dive in.
The Live Music Business
Most artists have a manager, a de facto CEO who oversees the business side of their operations. Each relationship between artist and manager is different, but in general, managers handle contract negotiations, coordinate schedules, work with booking agents (who are a major player in this as well, however they essentially work for the artist. For purposes of this discussion, we’ll leave them under the management umbrella) and promoters to book shows, and handle the paperwork side so the artist can focus on what they do best: making and playing music.
As the name implies, promoters are mainly responsible for marketing a show. They work with venues to secure bookings, advertise ticket sales, bring in sponsorships, and in general, make sure everything is in place that the artist needs.
This is the actual running of individual music venues. Think vendors, sound systems, security, bathrooms, and all those other details that go into making sure large crowds of people can be accommodated for a concert.
While promoters advertise ticket sales, ticketing companies actually handle the purchase of admission to venues hosting a show. They are responsible for collection and distribution of ticket revenue, logistics of providing those tickets to buyers, and ensuring only the proper number of tickets are sold for each show at each venue.
While pretty straightforward, it’s important to understand how each of these segments chain together in order to have a successful show, and recognize the incentives each one has throughout the negotiating process.
So where does Live Nation/Ticketmaster fit into this chain?
At every single link.
Live Nation/Ticketmaster have significant to substantial ownership in all four business segments that link artists and fans. The company has effectively created a chokepoint, where fans and artists alike are left with no practical “opt out” of the company’s current system. A system which continues to expand in all four segments every year.
But don’t just take my word, let’s look at the specifics of how Live Nation/Ticketmaster operates in each, and how this all came to be.
Long before the merger with Live Nation, Ticketmaster was nothing more than the top primary ticketing platform on the planet, but that changed when it expanded into the artist management business in 2008.
Ticketmaster purchased a majority stake in Front Line Management, whose clients included Aerosmith, Christina Aguilera, Jimmy Buffet, and Guns N’ Roses. At the time, Front Line CEO Irving Azoff was considered by many to be “the most influential manager of recording artists in the world”, being named the most powerful person in the music industry by Billboard’s Power 100.
But this wasn’t the company’s only major artist management investment, as in 2011 a “Strategic Partnership” with Universal Music Group was announced. This brought another slew of high profile artists under the company’s management, such as The Eagles, Kenny Chesney, Fleetwood Mac, Slipknot, ZZ Top, Neil Diamond and Journey.
While the term “Strategic Partnership” was used to describe the deal, there’s no questioning who would be calling the shots.
Roc Nation Management (Rhianna, Alicia Keys, DJ Khalid), Spalding Entertainment (Jason Aldean, Rascal Flatts, Kix Brooks, Terri Clark), Mick Artists Management (Leon Bridges, Walk The Moon), Three Six Zero Group (Calvin Harris, Frank Ocean), Vector Management (Emmylou Harris), Philymack Management (The Jonas Brothers, Demi Lovato), G. Major Management (Thomas Rhett, Jewel, Danielle Bradbery), and Gellman Management (Sugarland, Brandy Clark, Michelle Branch).
While a current list of all Live Nation subsidiaries is hard to find, you can search through this one from December 2015. Safe to say the list is much, much larger now, given their latest annual SEC filing (2021 10-K) reports them spending over $384 million on cash acquisitions in 2021 alone.
Obviously, the company’s portfolio is far from every touring artist, but it’s clear it owns a significant and growing piece of the artist management industry and oversees many of the biggest acts in music.
So when they go out on major tours, and bring a slew of other artists with them, there’s a clear incentive to stay within their ecosystem and use the next segment in the Live Nation chain, which is what the company originally became known for…
Live Nation was originally only an event promoter, founded as SFX Entertainment in 1996. It took just 4 years for the company to command a huge share of the concert promoting business. It was then sold for $3 Billion to Clear Channel Communications in 2000, and was finally spun off as Live Nation in 2005. This is when Michael Rapino was appointed as CEO and the tear to the top truly began.
Rapino’s first order of business was to clear house and sell off all non-music industry assets. He then used that cash to buy up as many smaller competitors as possible, as well as lay the ground work for expansion in other segments, like artist management. It was very risky at the time, but obviously turned out extremely successful.
By 2008, even before the merger with Ticketmaster, Live Nation was promoting “at least 70%” of major artist concerts, according to Pollstar data cited in a 2010 Lawsuit filed with the DOJ.
As with Artist Management, things kicked into high gear after the merger.
Live Nation has purchased dozens of promotion companies, festivals, and tours, both domestic and international, that range from small local folk shows to major events, such as Bonnaroo, Lollapalooza, Austin City Limits, and The Governor’s Ball. According to the company’s 2021 10-K, it produced 111 festivals globally in 2019, the last full year of non-Covid skewed data.
In a 2021 display of dominance, the company acquired OCESA, the 3rd largest music promoter in the world.
Just a quick search of “Acquires” on Live Nation’s website returns around 60 relevant public statements on major investments the company has made over the past few years, the majority of which are concert promotion businesses.
The fierce acquisition strategy has pushed the number of shows promoted by Live Nation to almost incomprehensible levels.
In 2019, the last full year of pandemic free data, Live Nation promoted over 40,000 events, according to its 2019 10-K. They also stated that the number of confirmed shows for 2020 was up 30% before things got cancelled, meaning they were on pace to promote around 52,000.
Unlike in Artist Management, Live Nation actually has dominant market share in the event promotion industry, practically dwarfing its largest competitor, AEG Worldwide.
AEG is not a public company so available data is sparse, but we can do some comparisons with information provided on its website. However, before we do, it must be noted that AEG is heavily focused on sporting events, so the true disparity in the music industry is even greater than what’s shown below.
On its website, AEG says it promotes over 10,000 shows annually and has over 25 music festivals, compared with Live Nation’s 40,000+ and 111, respectively. Over 4 times more than the number two company in the world, who still hosts over 160 million guests at its events every year.
So yeah, Live Nation is substantially larger than AEG, and laughably larger than all other event promotion companies. Even if a new company begins to make some noise, Live Nation has shown a pattern of making an offer that can’t be refused, swallowing the newcomer up to feed the ever growing belly of the beast.
With a market share of that size, Live Nation, at minimum, can control industry narratives and standards, as well as pressure artists and venues to work exclusively with them, enticing potential clients with a wide spread of services and comparative opportunities. Even if the contract terms aren’t exactly stellar, an example of which is detailed below, it’s not hard to imagine many artists taking the deal due to a seeming lack of any other reasonable path forward.
On non-stellar contracts, a leaked memo from 2020 shows specific examples of how the company is willing to change terms for artists with existing deals. The changes include a 20% cut in guaranteed artist pay and, most shockingly, a responsibility of the artist to repay Live Nation two times their guarantee if a show gets cancelled, which Billboard stated is “unheard of in the music industry”.
Live Nation is only able to get away with this bully behavior due to lack of viable alternatives.
So not only is there practically no opt-out from Live Nation’s ecosystem, those who are in it still somehow get the short end of the stick.
But why use other people’s venues when they can be yours?
According to the company’s 2021 10-K, it owns, operates, has exclusive booking rights for, or has an equity interest in, 320 venues worldwide. Excluding the “exclusive booking rights” venues, Live Nation has complete, or close to complete, control of 264, 170 in the US alone.
That’s a lot of venues, but things get worse when you look at those venues’ placement in major markets across the US.
Using the top 25 overall Designated Market Areas per Nielsen’s 2022-2023 rankings, Live Nation owns or operates at least one venue in every single market.
At surface level, this makes sense. Why not own the venues where the lion’s share of people live and where the largest number of concerts are put on each year?
But that’s also exactly the point. Live Nation controls, or at least has a large amount of sway, in practically every major market (read, over most fans) in the United States.
To go one step further, Live Nation has been accused of retaliating against venues and markets who wish to not use Ticketmaster as their primary ticketing platform and there is some data, albeit aged, to back this up.
According to the previously mentioned lawsuit filed with the DOJ, as of 2008, before the Ticketmaster merger, 92% of the shows Live Nation promoted took place at a venue owned, operated, or with an exclusive Live Nation contract, per cited Pollstar data.
Admittedly, this is where current data dries up, but denying there is an incentive for the company to promote shows hosted at its own venues, using its own ticketing platform, is silly. In fact, CEO Michael Rapino made this exact point during a 2019 appearance at Goldman Sachs’ Communicopia.
“We can do what’s right for our business, so we have to put the show where we make the most economics, and maybe that venue [that wants to use a different ticketing platform] won’t be the best economic place anymore because we don’t hold the revenue.”
While it’s not a smoking gun, the quote certainly gives credence to claims that Live Nation will back away from venues that don’t want to use Ticketmaster (aka venues with less revenue opportunity).
A lawsuit was filed with a US District Court in California in early 2022 to try this exact issue and litigation is still pending.
To add a cherry on top, let’s look into some manipulative practices the company has implemented in its venue operations.
Just like with Artist Promotion, Live Nation is known to change contract terms from the Venue Operations side as well, which was again shown in the leaked 2020 memo.
Live Nation raised the cut they would take out of artist merch sales to a whopping 30%, practically guaranteeing that artists wouldn’t be seeing any profit from those sales unless they raised prices significantly, which would in turn also increase the nominal revenue taken in by the Live Nation venue.
In the same vein as effectively forcing merch price increases, Live Nation has consistently raised the cost of items inside their venue’s gates over the years.
According to their 2008 10-K, average revenue per fan at a show was $78.34. Using data from the company’s most recent quarterly report (Q3 10-Q), Live Nation now takes in approximately $138.93 per fan per show.
Even after accounting for inflation, that’s still a 28% increase in per fan expenditure at each show. I don’t think people all of a sudden started drinking more beer, which would show a consistent increase in prices well beyond what’s reasonable to keep up with CPI.
While I’ve been trying to avoid anecdotes or hypotheticals to this point, let’s just play one out quickly, to make sure we’re on the same page.
Theoretically, an artist at a show could be managed by a Live Nation company (paying a management fee), have their concert promoted by Live Nation (for a promotional fee), then have the Live Nation owned venue take 30% of their merch sales, and we didn’t even bring up ticketing issues yet, which started this conversation in the first place.
So let’s get to it.
It’s no secret Ticketmaster is the giant of all giants in the ticketing industry, selling over 485 million tickets in 2019, per its 2021 10-K, and has been the number one provider of primary tickets long before Live Nation came around.
According to Pollstar data cited in the 2010 lawsuit filed with the DOJ, Ticketmaster was the primary ticketing service used by 82.9% of US venues in 2008, pre-merger. The next highest at the time was Tickets.com, which had a 3.8% market share.
This percentage has appeared to wane in recent years, as a 2022 Lawsuit filed in the California District Courts cites a New York Attorney General study that shows Ticketmaster sells 65% of all major concert venue seats. But, this does not fully capture their control of ticketing, because it leaves out a part of its business that Ticketmaster likes to keep out of the spotlight: The secondary market.
According to Moodys Investor Service data cited in a 2018 Government Accountability Office report, Ticketmaster held the second largest market share of resale tickets, after StubHub. The 2022 California Lawsuit referenced above also speaks to its growing control over the secondary market, alleging based on public information and belief that the current share can be as high as 60% of the market, although no specific data is referenced to backup this claim.
Growing this secondary market is a core part of the company’s strategy, as laid out in its 2021 10-K.
“We will grow the volume of secondary tickets sold through a trusted environment for fan ticket exchanges, allowing our fans to have a dependable, secure destination for secondary ticket acquisition for all events.”
This means Ticketmaster wants to collect fees multiple times on the exact same ticket, more often.
The same 2018 GAO report cited six studies that show secondary market tickets typically bring in much higher prices than the original face value (41%, 49%, ~50%, 45%, 143%, ~50%, over face value in each study cited.)
Therefore, there is a clear incentive for Ticketmaster to increase the volume of resale tickets on its platforms, as the nominal fee dollars collected on each sale will be substantially higher than on the primary tickets sold.
Fees are one of the main issues voiced by the public over the years. There have been many claims that Ticketmaster charges fees well beyond those of competitors (called “supracompetitive fees”), but I am unable to find any solid data to back up that claim.
However, due to the vertical set up of the company, Ticketmaster/Live Nation takes in a substantially larger percent of these fees than its competitors.
Ticketmaster is on the record many times describing how ticket pricing works, including the 2020 leaked memo which explicitly says that “Ticket prices are set by the promoter, at the promoter’s sole discretion”.
Joe Berchtold, CFO of Live Nation, joined NPR Podcast 1A in August of 2022 and explained this in more detail.
The conversation around who sets prices and fees takes place in the first 15 minutes or so, but this is a summary of his explanation for how it works. Note: He differed from the above memo by saying both artists and promoters set prices.
The artist and promoter set the face value ticket prices for their concerts.
Dynamic pricing allows for that face value to increase if there is enough demand to support it.
The fee percentage on those tickets is set by the venues, because a majority of fee revenue goes back to the venue hosting the event.
If the buyer of the original ticket wants to sell, they can list and sell at the new market price determined by demand on Ticketmaster’s platform, keeping the difference in purchase price and selling price, less resale fees.
Based on what we’ve already gone over in previous sections, some issues jump out immediately.
Live Nation has a powerful and growing presence in the artist management space, especially with top draw artists. It is also the foremost promoter of concerts in the world, meaning Live Nation has a strong say over what those ticket prices will be and a clear incentive for the face value price to be as high as possible so the secondary market can further increase, allowing for a hefty “double-dip” on the fees collected.
They also own and operate a meaningful number of venues, meaning the allocation of fees for those venues flows right back to, you guessed it, Live Nation.
Every portion of their business can collect money with each ticket sale, and growing the number of tickets where all profits flow straight into the company’s pockets seems to be the goal.
This is exactly how they have so much control over the ticketing industry. Everyone likes to focus on the 70% or so of the primary ticketing market that the company commands, and while that’s obviously concerning, more problematic is their ownership of every link in the live music chain that connects artists to fans.
Whether Live Nation/Ticketmaster is a monopoly is for the courts to decide.
But what is undeniable is the company’s top to bottom control of the live music industry through significant ownership in all 4 segments that separate artists and fans. The company has intertwined its systems together in such an intricate, and honestly brilliant, way that both the buyers and sellers of live music have practically no opt out, forced to use Live Nation/Ticketmaster services to see shows of every size in near every market.
This is the issue with Ticketmaster. High fees, dynamic pricing, and website crashes are just symptoms of this integrated chokepoint.
As the great Zach Bryan said, all my homies hate Ticketmaster, and I hope this helps you understand why.