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Senators criticize Ticketmaster after Taylor Swift debacle

 

Senators interrogated Ticketmaster Tuesday, wondering if the company’s dominance of the ticketing industry led to its spectacular failure last year when selling tickets to Taylor Swift concerts.

Republicans and Democrats on the Senate Judiciary Committee also discussed possible action, including a ban on ticket transfers to curb speculation and a demand for more transparency on ticket fees. Some have suggested that it may also be necessary to separate Ticketmaster and Beverly Hills-based California concert promoter Live Nation, who merged in 2010.

“The thing is, Live Nation/Ticketmaster is an 800-pound gorilla,” said US Senator Richard Blumenthal, a Connecticut Democrat. “This whole concert ticket system is a mess, a monopolistic mess.”

Ticketmaster is the world’s largest ticket seller, handling 500 million tickets annually in over 30 countries. According to a federal lawsuit filed by consumers last year, about 70% of tickets to major concert venues in the US are sold through Ticketmaster.

In mid-November, the Ticketmaster site crashed during a presale for Swift’s upcoming stadium tour. The company said its site was overwhelmed with both fans and attacks by bots impersonating consumers to buy tickets and sell them on secondary sites. Thousands of people have lost tickets after waiting hours online.

Live Nation president and chief financial officer Joe Berchtold apologized to fans and Swift on Tuesday and said the company knows it has to do better. Berchtold said Ticketmaster has spent $1 billion over the past decade trying to improve its security and stop bots.

“We need to work better and we will work better,” he said.

But legislators were skeptical. Republican Senator Marsha Blackburn of Tennessee said that many other companies, including banks and energy companies, are also frequently targeted by bots but do not suffer from service outages.

“They figured it out, didn’t you guys? It’s incredible,” she said. “We have a lot of people who are very dissatisfied with the way it has been approached.”

The senators also took aim at Ticketmaster’s fees. US Senator Amy Klobuchar, a Democrat from Minnesota, recalls getting into a friend’s car in high school to go to Led Zeppelin, The Cars and Aerosmith concerts. These days, she says, ticket prices have become so high that concerts have become too expensive for many fans. Klobuchar said ticket fees now average 27% of ticket prices and can be as high as 75%.

Berchtold insisted that Ticketmaster does not set prices or service fees for tickets and does not decide how many tickets go on sale. According to him, the cost of services is set by the venues. According to him, Live Nation owns only about 5% of the sites in the US.

But competitors like Seat Geek CEO Jack Groetzinger said that even if Live Nation doesn’t own the venue, it prevents competition by signing multi-year contracts with arenas and concert halls to provide ticketing services. If these venues do not agree to use Ticketmaster, Live Nation may refuse to perform. This makes it difficult for competitors to enter the market.

“The only way to restore competition is to separate Ticketmaster and Live Nation,” Groetzinger said.

Clyde Lawrence, singer-songwriter with New York-based pop group Lawrence, said it also hurts artists when Live Nation owns or has contracts with venues because there is little opportunity for bands to negotiate a deal or choose another ticket seller.

Lawrence shared a hypothetical example: Ticketmaster charges $30 for a ticket, but then adds fees that raise the price to $42. Just $12 per ticket goes to the group after taking into account the fees they have to pay to Live Nation, including – in at least one case – $250 for a stack of 10 towels in the dressing room.

Lawrence wants caps on fees, more transparency about what the fees are used for, and a fairer distribution of profits. For example, Live Nation receives a share of the band’s merchandise sales at concerts, but does not share with food and drink sales.

Berchtold said the ticketing industry would like lawmakers to focus on the problem of ticket speculation, which he says has grown into a massive $5 billion industry, and ban fraudulent activities such as resellers offering tickets that are officially not yet on sale. He also agreed that the industry needs to be more transparent about fees.

Senator John F. Kennedy, a Republican from Louisiana, proposed legislation to prevent ticket transfers, which would prevent resale. He also suggested that major artists like Swift or Bruce Springsteen demand caps on royalties.

“Not every kid can afford $500 to go to a Taylor Swift concert,” Kennedy said.

Berchtold said Ticketmaster would support the ticket transfer ban even though the company does business in the ticket resale market. But others, including Republican Senator Tom Tillis of North Carolina, said the ticket transfer ban would prevent people from reselling them.

The Justice Department allowed Live Nation and Ticketmaster to merge in 2010, on the condition that Live Nation agreed not to retaliate against concert venues for using other ticketing companies for 10 years.

In 2019, the department investigated and found that Live Nation violated this agreement “repeatedly”. He extended the ban on retaliatory measures against concert venues until 2025.

Utah Republican Sen. Mike Lee said Tuesday the Justice Department is investigating Live Nation again after the Swift ticket fiasco. At this point, he said, Congress should ask whether the ministry was right to allow the merger in the first place.

“It is very important that we support fair, free, open and even fierce competition,” Li said. “It improves the quality and reduces the price. We want this to happen.”

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