Pop superstar Taylor Swift swept the American Music Awards on Sunday night, winning six categories, including Artist of the Year. But many of her fans are still unhappy after major glitches crashed the online ticket sales for her upcoming tour. Ticketmaster, the company in charge of the sales, is now the target of many lawmakers and attorneys general, possibly the U.S. Department of Justice, and legions of devastated swifties.
The pre-sale for Swift’s Eras Tour was plagued by an astronomical number of people, including scalpers, trying to buy tickets, even though they didn’t have codes. That led to the site crashing, says Dean Budnick, editor and chief of Relix, and co-author of “Ticket Masters: The Rise of the Concert Industry and How the Public Got Scalped.”
“You had 47 stadium shows essentially being sold simultaneously. … Bots are an ongoing issue for Ticketmaster. … Ticketmaster does actively do what it can to revise its system, to police it, and the like, in an attempt to push back the bots. But it's a cat-and-mouse game,” Budnick explains.
Ticketmaster is owned by Live Nation, and Budnick says it changed how event sales operate in the early 1980s.
“Previously, tickets were something of an expense for an arena, for a facility, and you would use in an attempt to sort of market your shows. Get them out there to fans, to would-be concert goers, through remote access and the like. And Ticketmaster, at that moment, decided they were going to change things a little bit. Service fees were low. But Ticketmaster, under the leadership of Fred Rosen, the CEO, went out to all these arenas and said, ‘Hey, what would you think if we doubled the service fees?’ … If we do that, we will share the revenue with you.’”
Budnick says when the Justice Department approved the Live Nation/Ticketmaster merger, it stipulated that the company wasn’t allowed to intimidate venues when looking for new clients. It did not see it as a monopoly. That’s because of the percentage of the market it technically holds.
“[Ticketmaster] would say, ‘Listen, we're not a monopoly, we only do 25% of the ticketing nationwide.’ And that's probably essentially true. But that 25% includes junior, high school basketball games,” Budnick says. “If you look at the big events, the top 100 arenas in this country, Ticketmaster has exclusive contracts with 80 of them. And the fact that Ticketmaster has this relationship with Live Nation means that it has deep pockets so that it can go out and secure new clients or maintain the clients that it has, because it can offer them large signing bonuses, and it can offer them large advances against service fees.”
He adds that it’s tough to guess whether or not the DOJ will move to break up Live Nation and Ticketmaster.