The ticketing world was shaken recently when a hidden camera report made headlines across the globe about Ticketmaster colluding with ticket brokers, the company’s self-purported public enemy No. 1, to provide resellers with the ability to sell their tickets on Ticketmaster’s website for a commission.
For fans frustrated by how difficult it can be to purchase tickets for a high-demand event when they go on sale, this news is the latest evidence to them that when it comes to getting a fair shot at tickets, the cards are stacked against them. There is no doubt this is often true. But the reason is not because professional resellers are scooping up all the tickets.
The central reason is the holding back of tickets from going on sale publicly from the very start, along with other, anti-competitive measures being implemented by Ticketmaster, its parent company Live Nation and its partners, including venues, promoters, music artists and sports teams in the “primary market” where tickets initially originate.
This week ,the Federal Trade Commission took the first step in meaningful, even if long overdue, action when it announced a March workshop to examine ticket sales. The workshop “will discuss the current state of the online event ticket marketplace, shed light on industry-wide advertising and pricing issues, and explore ways to address deception beyond traditional law enforcement.”
This is welcome news because otherwise, in response to the scandalous headlines these past couple of weeks, lawmakers, regulators, the media and the general public can expect only lip service as Ticketmaster makes apologies. The company will own the mistakes reported in the media. It will try and deflect the brunt of the blame on ticket brokers.
The efforts to eliminate “scalpers,” a pejorative term artfully used to denigrate an entire industry even professionals who do resale the right way, will be hailed by Ticketmaster critics as bringing the mega-monopoly to its knees. It could actually play into the company’s hand, however, because the current focus is on issues that are important but not central to the true reason why fans find it difficult to access tickets.
The real cause is Ticketmaster’s efforts to control what you do with your tickets from initial sale through the moment it is scanned at the event. Ticketmaster/Live Nation has strong control over how concert tickets are sold. The company has grown so large and powerful that it can profit at almost every turn. Through Live Nation, it owns or manages the vast majority of music venues.
As Ticketmaster it serves as the online box office in most cases, and it has its hands deep within the secondary resale market as well. It will likely use the smokescreen of “scalpers” to bolster its systematic efforts to thwart competition in the resale marketplace and to funnel resale into its own tightly-controlled grip. I guarantee that market will come with costly strings attached.
If Ticketmaster/Live Nation leverages this recent crisis into new, greater power for the company to control ticket supply, consumers will be left with less choice for where to shop for tickets. As a result, fans will see increased fees and higher prices. This already is evident from a slow-ticketing program initiated by Ticketmaster called Verified Fan.
The company’s talking points assert that Verified Fan is great because it keeps “scalpers” and bots out, but look closer. It is intended to hold-back massive ticket supply from ever going on sale publicly in order to induce fans into paying much more than they should. It is a system to create the illusion of scarcity since there is no transparency around how many tickets are truly available.
If you don’t believe me, then believe Ticketmaster. On its corporate blog, defending itself or “setting the record straight,” Ticketmaster President Jared Smith states, “We’d much rather be having a conversation about the amazing products we’ve built … including Ticketmaster Presence digital ticketing and Ticketmaster Verified Fan, which has now been deployed on over 100 tours and has in many cases cut resale as much as 90 percent.”
You see, the company wants to reduce resale, except for resale on its commission-collecting platform. The kicker is that if these tickets were initially purchased on Ticketmaster.com, fees were already paid. Why should buyers or sellers pay double fees and commissions on the same ticket? Such anticompetitive behavior only drives prices higher and harms consumers.
As the FTC and lawmakers react to this recent news, I offer some advice:
First, don’t let Ticketmaster/Live Nation turn this situation on professional resellers and ticket resale generally. It always blames ticket brokers for the public’s inability to get tickets when the real reason is holdbacks and the company’s own anti-consumer conduct.
Second, beware of the efforts underway to control both the initial and resale supply of tickets. You do not want the same lack of competition that exists with the initial sale of tickets in the primary market to occur in the secondary resale market.
Finally, vesting Ticketmaster/Live Nation with the power to determine who can and cannot buy tickets will result in an arbitrary selection that will only benefit Ticketmaster/Live Nation and its shareholders, not consumers.
Gary Adler is the executive director and counsel of the National Association of Ticket Brokers.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.
