To legislators, on the TM/Live Nation merger
February 11, 2009
As of yesterday morning, Ticketmaster and Live Nation announced that they’d merge into a single entity, with the caveat that the merger is still subject to regulatory approval.
If you’re a legislator or a civil servant who’ll be involved in deciding whether the new entity will violate anti-trust laws, you probably know about about the concerns with Ticketmaster and its in-house secondary market, TicketsNow (if not, you can ask Bruce Springsteen). And you should be alerted by phrases like ‘the creation of an entertainment powerhouse of game-changing proportions‘ or ‘the most powerful and influential entity the music business has ever known‘ appearing in news stories about the merger.
But what I really suggest you do is the following: Take a look at the concert listings for your city, and choose an artist that you would like to see. Then go to the Ticketmaster website and ‘buy’ tickets for the concert. Here’s my test run: I picked The Killers, playing at the WaMu Center in Seattle on April 22nd. The face value of each ticket was $33, and after I selected ‘2’ as the number of tickets, I got the first of the additional charges: $9.70 x 2 and $2 x 2 in ‘convenience’ and ‘building’ fees (can’t they do the arithmetic and give me the total charge?). Then I chose their ‘recommended’ delivery method, a PDF of the tickets – apparently it costs them $2.50 to send me an e-mail that I have to print out myself (maybe they could get some hints from the airlines). Next, I logged into an existing account, but if you haven’t bought tickets from Ticketmaster before (lucky you!), you have to create an account. After investing all of that time in the purchase, I got an extra little surprise: $5.35 in ‘processing’ charges. Final tally: $97.25 for $66 worth of tickets, or a markup of 47% on each ticket. Needless to say, I didn’t push the ‘submit order’ button.
If you went through that process, especially for a band you do want to see, you probably feel like you’ve been held up by your ankles and shaken repeatedly to dislodge all the money from your pockets. So ask yourself this: is this the behavior of a company that is vying with its competitors? Or is it the behavior of a company whose business model is predicated on maximizing what the buyer is willing to endure? Ticketmaster already has a monopoly, if not over all live music, then certainly over a large chunk of artists and venues. Live Nation is the same. Given their current behavior, do we really want to allow them to join forces extend their de facto monopolies even further?
There is no way this merger is good for the consumer. Please do the right thing and refuse to approve it.
UPDATE: Less than a day later, and the Justice Department has already announced that it will scrutinize the merger; the investigation may take up to six months.
MP3: The Killers – Smile Like You Mean It [buy]
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zed equals zee 
Ticketmaster is the biggest scam going right now. They gouge with service fees and then they scalp their own tickets.
They’re horrendous. Live Nation is equally horrendous. Together they’re devastatingly horrendous.
Viva la Brown Paper Tickets!
Terrifying. Something must be done!
Brown Paper Tickets rule (I love the way they give you both the face value and the total cost, even before you choose the number of seats).
I showed this post to my brother, and he pointed out that, despite valiantly trying to gouge the consumer, both companies are doing really badly – go to Google and type in TKTM or LYV. Ticketmaster, in particular, has lost 80% of its value in the last year. So it’s not like it’s even a successful strategy.
This exact same thing happened in 1991-92 when ticketmaster – at the time a young upstart company – bought out ticketron. Ticket fees went almost immediately from $2-3 a ticket to $7-9 a ticket in NYC and LA.
This is what Pearl Jam fought when they tried to tour on their third record and were highly mocked in the press.
I also recall the president of ticketmaster, in responding to a criticism of their service charges and being a monopoly by The Grateful Dead’s Bob Weir (the highest grossing active touring at the time), with something to the effect of “we’re glad that bob weir is expressing his opinions on how we should conduct business. we plan to submit some setlist suggestions to the grateful dead.”
or something to that effect.
the hubris was amazing, yet clearly they got what they wanted.
Though I hope it will be different this time, I doubt it.
I’m a little more optimistic, actually, not least because it seems like the perfect case for the Obama administration’s new Assistant Attorney General for antitrust, Christine Varney (who has yet to be confirmed), to start off her term by sending a strong message of federal oversight. Since two decades of the kind of behaviour you describe has left Ticketmaster universally reviled, it’s hard to imagine anyone mounting a strong defense of the merger.