Will anything change? – Billboard

The Ledger is a weekly newsletter about the economics of the music business sent to Billboard Pro subscribers. An abridged form of the newspaper is published online.

Is Ticketmaster a monopoly that treats customers unfairly? Problems with Taylor Swift’s record-breaking The Eras Tour onsale this week have led to a cluster of complaints surrounding the ticketing giant, which has now led to a reported Justice Department investigation.

On Thursday Sen. Amy Klobuchar Sent an Open Letter to the CEO of Live Nation Michael Rapinoe Its description is “about the state of competition in the ticketing industry and its detrimental effect on consumers.” The problem, Klobuchar wrote, is the lack of competition “that usually pushes[es] Companies to innovate and improve their services. This can result in dramatic service failures, with consumers paying the price.

Breaking up Live Nation and Ticketmaster doesn’t necessarily prevent this problem. It is likely that any ticketing platform would be struggling with such a high level of demand. StubHub crashed in 2018 when University of Georgia fans flooded the site to buy tickets to watch their team play in the NCAA football national championship game — and that was just one game.

Ticketmaster blamed the outage on the growth of unregistered fans and billions of bots. According to the company, more than 3.5 million people pre-registered for Swift’s verified fan credentials, the largest registration in its history. Typically, only a fraction of registered fans show up to purchase tickets. This time, “a staggering number of bot attacks as well as fans who did not have invite codes” resulted in 3.5 billion total system requests – four times the previous record number.

One could argue that Ticketmaster could have been better prepared for such a high level of demand. Perhaps the company should Swift-proof the platform in anticipation of a flood of speculators and unregistered fans – Swift said on Friday (18 November) that her team “asked them many, many times if they could handle this kind of demand and We were assured they can.” Overall, problems are relatively rare on the platform given Ticketmaster’s business volume, but we talk about them because they happen with high-profile concerts that attract large numbers of customers. They attract the most attention and complaints online, which in turn attract politicians. Ticketmaster is one of the few non-partisan issues in America in 2022.

However, some observers have acknowledged issues surrounding Ticketmaster’s market power. repealed. David CicillineChairman of the Antitrust, Commercial and Administrative Law Subcommittee of the House Judiciary Committee, wrote Regarding Swift On-Sale that “the excessive wait times and charges are completely unacceptable … and are symptomatic of a larger problem.” It’s fair for Cicilline to suggest that Ticketmaster doesn’t invest enough in its platform to avoid the technical issues and waits Swift fans recently experienced. It’s debatable, but it’s a defensible argument.

Fees, however, are an entirely different issue. Ticketmaster is the leader in ticket fees, but does not have a monopoly on the ability to charge them. More competition in ticketing won’t stop venues and promoters from adding to the face value of tickets. Ticket purchases are an opportunity for all parties to capitalize on fans’ demand for live music. As Bruce Springsteen’s controversial leap into dynamic pricing demonstrated, leaving money on the table is an unusual strategy in the modern music business.

Ticket prices sometimes get dragged into the argument as well. It seems politicians and consumers want a form of price competition that doesn’t exist. In-demand concert ticket prices won’t be much cheaper if sold on StubHub instead of Ticketmaster. The laws of supply and demand say that rare items like Swift concert tickets are going to be in high demand, regardless of who is selling them.

So, what concrete results could come from the disastrous The Eras Tour On-Sale? Sen. Klobuchar’s letter points to customers’ desire for fair access to concert tickets. She asked Rapinoe, “Typically, what percentage of high-profile tour tickets are made available to the general public compared to those allocated for pre-sales, radio stations, VIPs, and other restricted occasions?”

Klobuchar wants to know what percentage of the average person has tickets without being a customer of a particular credit card, buying a high-priced VIP package, winning a radio station contest, or being a member of an artist’s fanbase. club. In this case, Capital One is the sponsor of the Eras Tour and has offered pre-sales to its customers.

But how do MPs control access? Do they establish rules that determine what types of marketing partnerships artists can and cannot establish? Will they ask American Express to stop giving its credit card holders long-standing perks in the form of pre-sale access and dedicated tickets? If Congress really wants to create a more level playing field for fans, they could do what lawmakers in Victoria, Australia did in 2021: pass a law capping the resale value of a ticket at 110% of its face value. Limits to %. This should reduce the number of resellers and bots that are clogging Ticketmaster’s system for high-traffic on-sales like the Eras Tour. At the very least, a price cap would bring a much-desired sense of fairness to the secondary market. Whether the US Congress has the wherewithal to impose price controls on private companies remains to be seen.

A more likely consequence of the Arras Tour debacle is increased transparency. New York state legislators passed a law in June that improves transparency by requiring all pricing — after several clicks in the check-out process — and prohibiting disclosure of the total cost of tickets — face value and fees — Puts The bill could have gone further: the requirement to disclose the percentage of tickets made available to pre-sales and VIPs was in the initial form of the bill but not in the final version.

But, again, are lawmakers willing to mandate such disclosures from private businesses? It would more likely be a voluntary disclosure done at the behest of the artist – Swift is exactly the kind of powerful artist who can persuade ticket sellers to reveal this information. Transparency won’t immediately translate into more access for the average fan, but it could spark a larger conversation about how fans get access to concert tickets. It won’t ease the pain of many Swift fans, but it will be a step forward.

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