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Ticketmaster Grilled: 6 Excerpts From Taylor Swift’s Concert Fiasco

Ticketmaster Grilled: 6 Excerpts From Taylor Swift’s Concert Fiasco

Ticketmaster Grilled: 6 Excerpts From Taylor Swift’s Concert Fiasco



CNN

Legislators grilled A top executive at Ticketmaster’s parent company, Live Nation Entertainment, said Tuesday that millions of people were unable to purchase tickets late last year after the service was unable to process orders for Taylor Swift’s upcoming tour.

During the three-hour hearing, senators pressed Live Nation President and CFO Joe Berchtold and other witnesses on allegations that his company has become too dominant in the industry to the detriment of competitors, musicians and fans.

Senator Richard Blumenthal told Berthold, “I want to congratulate and thank you for your incredible achievement. “You brought Republicans and Democrats together in a common cause.”

Here’s an overview of the big takeaways from the hearing:

When tickets for Swift’s new five-month Eras tour went on sale on Ticketmaster in mid-November, the overwhelming demand angered fans who couldn’t afford tickets. Unable to resolve the issues, Ticketmaster subsequently refused to sell Swift’s concert tickets to the public, citing “extraordinarily high demands on the ticketing system and insufficient remaining ticket inventory to meet this demand.”

In testimony Tuesday, Berchtold partially blamed bots for the Swift ticketing incident.

He said Ticketmaster had “triple the bot traffic we’ve ever seen” amid “unprecedented demand for Taylor Swift tickets.” The bot service “required us to slow down and even pause our sales. This has led to a terrible customer experience, which we deeply regret.”

Berchtold also went on a broader defense of his company. He is Ticketmaster noted that it does not set ticket prices, does not determine the number of tickets sold, and that “in most cases, venues set service and ticketing fees,” not Ticketmaster.

He also dismissed suggestions that Live Nation’s dominance has allowed fees to rise, citing data from market intelligence firm Pollstar that show Live Nation controls about 200 of the roughly 4,000 venues in the United States, or about 5%.

Venues operated by Live Nation charge fees that are “in line with other venues in the market,” he said.

Members of the entertainment industry and one opponent have challenged Ticketmaster’s dominance of the industry.

SeatGeek CEO Jack Grotzinger said many venue owners “fear losing Live Nation concerts if they don’t use Ticketmaster and its services” and believes the company should be dissolved.

“Live Nation controls the world’s most popular entertainment, manages most of the major tours, operates the ticketing system and even owns many of the venues,” he told lawmakers. “This power over the entire live entertainment industry allows Live Nation to maintain its monopoly on the primary ticket market.”

He continued: “As long as Live Nation remains the major concert promoter and ticket seller in the US, there will be no shortage of competition and competition in the industry,” he said.

Band member Jordan Cohen, right, listens to singer-songwriter Clyde Lawrence, left, testifying before a Senate Judiciary Committee hearing to examine pro-competition and consumer protection issues in live entertainment.

On the witness panel, singer-songwriter Clyde Lawrence explained how the company operates as a ticketing company that eats up the revenue of promoters, venues and performers. He said the artists have no influence over Live Nation.

“Since both our salary and their salary are a part of the show’s success, we have to be true partners that match our incentives – keep costs down while providing the best fan experience,” he said. “But Live Nation, acting not only as a promoter but also as the owner and operator of the venue, makes that incentive much more difficult.”

Lawrence also told Ticketmaster, “We’re seeing a 40% or 50% commission added on top of the base ticket price.”

The fallout from the ticketing fiasco has once again focused attention on Ticketmaster and its power in the industry, more than a decade after it completed its merger with Live Nation, despite concerns that the deal would create a monopoly in the ticketing sector.

“In order to have a strong capitalist system, you have to have competition,” Minnesota Sen. Amy Klobuchar said in her opening remarks. “You can’t have too much concentration – which, unfortunately for this country, I say as an ode to Taylor Swift, we ‘know it all.’

Kathleen Bradish, vice president of legal advocacy at the American Antitrust Institute, called Ticketmaster “a very traditional monopoly” and told lawmakers that the lack of competition in the entertainment industry forces consumers to pay higher prices.

“Its market dominance creates an incentive and opportunity to limit competition upstream and downstream in the entertainment supply chain and to protect its market position,” he explained. “Customers pay the price for these monopolistic actions in higher ticket prices and fees, lower quality, less choice and less innovation.”

On the concert side, the company “excludes small or independent concert promoters and venues. In digital ticketing it excludes ticket sellers and brokers, who provide significant competition through the secondary ticketing market,” he said.

Lawmakers have repeatedly questioned the U.S. government’s previous handling of Ticketmaster’s merger with Live Nation. This included a legally binding consent agreement that allowed the company to merge with Ticketmaster as long as the combined company complied with a number of behavioral conditions.

2019 Review of the Department of Justice found According to Bradish of the American Antitrust Institute, Live Nation did not meet its obligations under the order, but instead of going to court, the department modified the agreement and extended it for another five years.

“The DOJ must take new enforcement actions to achieve effective structural relief,” Bradish said, calling for Live Nation to be broken up under Section 7 of the Clayton Act or Section 2 of the Sherman Act.

A Senate Judiciary Committee hearing on Tuesday addressed competition and consumer protection issues live on Capitol Hill.

Sen. Mike Lee said the way history has unfolded since the Live Nation merger casts “very serious doubt” on the usefulness of settlement agreements imposed by the federal government.

If the current Justice Department concludes that the consent decree was violated, “rescinding the merger should be on the table,” Blumenthal said.

In response to Berchtold’s explanation of the bot problem, some lawmakers have questioned the company’s security practices, noting that many small businesses can detect when bad actors break into their systems.

Republican Sen. Marsha Blackburn suggested Berchtold beef up his cyber defenses, get better consulting and hire new IT staff to better protect his systems. (The company has spent billions of dollars on security to protect its systems over the years, according to Berchtold.)

Senator John F. Kennedy, another Republican, criticized the company over the issue of Swift tickets. He said whoever was responsible for the incident at Live Nation “should be fired.”

In the back half of the hearing, some of the focus shifted to possible solutions, but there were no easy answers.

Some lawmakers have focused on the possibility of reselling tickets. This option can be useful for customers who need to change plans, but it also helps the scalping market.

When senators debated whether restricting ticket transferability would help, the Live Nation chief backed it. But according to SeatGeek’s CEO, that could strengthen Live Nation’s dominance because it has market share that forces customers to make deals only there when there are no other resale market options.

– CNN’s Brian Fung and Aditi Sangal contributed to this report

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