September 28, 2023

Ticketmaster will get grilled: 6 takeaways from listening to over Taylor Swift live performance fiasco

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Ticketmaster will get grilled: 6 takeaways from listening to over Taylor Swift live performance fiasco



CNN
 — 

Lawmakers grilled a high government of Ticketmaster’s mother or father firm, Stay Nation Leisure, on Tuesday after the service’s lack of ability to course of orders for Taylor Swift’s upcoming tour left hundreds of thousands of individuals unable to purchase tickets late final yr.

Throughout the three-hour listening to, senators pressed Stay Nation president and CFO Joe Berchtold and another witnesses on whether or not his firm was too dominant within the business, thereby harming rivals, musicians and followers.

“I wish to congratulate and thanks for a completely beautiful achievement,” Sen. Richard Blumenthal mentioned to Berthtold. “You may have introduced collectively Republicans and Democrats in a completely unified trigger.”

Right here’s a take a look at the massive takeaways from the listening to:

When tickets for Swift’s new five-month Eras Tour went on sale on Ticketmaster in mid November, heavy demand snarled the ticketing web site, infuriating followers who couldn’t snag tickets. Unable to resolve the issues, Ticketmaster subsequently canceled Swift’s live performance ticket gross sales to most people, citing “terribly excessive calls for on ticketing methods and inadequate remaining ticket stock to satisfy that demand.”

In his testimony Tuesday, Berchtold partly blamed the Swift ticketing incident on the bots.

Ticketmaster, he mentioned, was “hit with thrice the quantity of bot visitors than we had ever skilled” amid the “unprecedented demand for Taylor Swift tickets.” The bot exercise “required us to decelerate and even pause our gross sales. That is what led to a horrible shopper expertise that we deeply remorse.”

Joe Berchtold, president and CFO of Live Nation Entertainment, Inc, speaks during a US Senate Judiciary Committee hearing on promoting competition and protecting consumers in live entertainment, on Capitol Hill in Washington, DC, on January 24, 2023.

Berchtold additionally went on protection extra broadly about his firm. He emphasised that Ticketmaster doesn’t set ticket costs, doesn’t decide the variety of tickets put up on the market and that “normally, venues set service and ticketing charges,” not Ticketmaster.

He additionally rejected options that its dominance has allowed for hovering charges, citing information from the market intelligence agency Pollstar displaying that Stay Nation controls about 200 out of roughly 4,000 venues in the USA, or about 5%.

The venues managed by Stay Nation set charges which might be “according to the opposite venues within the market,” he mentioned.

Members of the leisure business and one rival spoke out towards Ticketmaster’s dominance within the business.

Jack Groetzinger, CEO of SeatGeek, alleged that many venue house owners “concern shedding Stay Nation live shows in the event that they don’t use Ticketmaster” and its companies, and argued the corporate have to be damaged up.

“Stay Nation controls the most well-liked entertainers on the planet, routes many of the giant excursions, operates the ticketing methods and even owns most of the venues,” he advised lawmakers. “This energy over the whole reside leisure business permits Stay Nation to keep up its monopolistic affect over the first ticketing market.”

He continued: “So long as Stay Nation stays each the dominant live performance promoter and ticketer of main venues within the US, the business will proceed to lack competitors and wrestle,” he mentioned.

Bandmate Jordan Cohen, right, listens as singer-songwriter Clyde Lawrence, left, testifies before a Senate Judiciary Committee hearing to examine promoting competition and protecting consumers in live entertainment.

Clyde Lawrence, a singer-songwriter on the witness panel, defined how the corporate acts as a promoter, a venue and the ticketing firm, which eats into performing artists’ revenues. Artists, he mentioned, don’t have any leverage over Stay Nation.

“Since each our pay and theirs is a share of the present’s income, we needs to be true companions aligned in our incentives — hold prices low whereas making certain the most effective fan expertise,” he mentioned. “However with Stay Nation not solely appearing because the promoter but in addition the proprietor and operator of the venue, it significantly complicates these incentives.”

Lawrence additionally mentioned with Ticketmaster, “we’ll see a 40%-ish or nearer to 50% payment added on high” of the bottom ticket worth.

The fallout from the ticketing fiasco as soon as once more solid a harsh highlight on Ticketmaster and its energy within the business, greater than a decade after it accomplished its merger with Stay Nation regardless of considerations the deal would create a close to monopoly within the ticketing sector.

“To have a powerful capitalist system, it’s important to have competitors,” Sen. Amy Klobuchar, a Democrat from Minnesota, mentioned throughout her opening remarks. “You possibly can’t have an excessive amount of consolidation — one thing that, sadly for this nation, as an ode to Taylor Swift, I’ll say, we all know ‘all too nicely.’”

Kathleen Bradish, vice chairman for authorized advocacy on the American Antitrust Institute, referred to as Ticketmaster “a really conventional monopoly” and advised lawmakers the dearth of competitors within the reside leisure business leads to customers having to pay greater costs.

“Its dominance in markets up and down the reside leisure provide chain creates the inducement and the flexibility to restrict competitors and shield its market place,” she defined. “Prospects pay the value for these monopolistic acts with greater ticket costs and charges, decrease high quality, much less selection and fewer innovation.”

On the live performance facet, the corporate excludes “smaller or impartial live performance promoters and venues. In digital ticketing, it contains excluding ticket resellers and brokers who present essential competitors by way of the secondary ticketing market,” she mentioned.

Lawmakers repeatedly questioned the US authorities’s previous dealing with of the Stay Nation merger with Ticketmaster. It concerned a legally binding consent settlement that allowed the corporate to merge with Ticketmaster as long as the mixed firm abided by a variety of behavioral circumstances.

A 2019 Justice Division overview discovered that Stay Nation was not assembly its commitments below the order, however as an alternative of suing, the Division modified the settlement and prolonged it for an additional 5 years, in line with Bradish on the American Antitrust Institute.

“DOJ ought to pursue new enforcement motion to acquire efficient structural reduction,” mentioned Bradish, calling for a breakup of Stay Nation below both Part 7 of the Clayton Act or Part 2 of the Sherman Act.

A Senate Judiciary Committee hearing on Tuesday examined promoting competition and protecting consumers in live entertainment on Capitol Hill

Sen. Mike Lee mentioned the way in which that historical past has unfolded because the Stay Nation merger raises “very severe doubts” concerning the usefulness of consent agreements imposed by the federal authorities.

If the present Justice Division concludes that the consent decree has been violated, “unwinding the merger must be on the desk,” Blumenthal mentioned.

In response to Berchtold’s rationalization concerning the bot downside, some lawmakers questioned the corporate’s safety practices, noting many small companies can decide when unhealthy actors are infiltrating their methods.

Republican Senator Marsha Blackburn advised Berchtold strengthen its cyberprotections, get higher recommendation and rent new IT staff to higher shield its methods. (Berchtold mentioned the corporate has poured billions of {dollars} into safety to guard its methods over time.)

One other Republican, Sen. John Kennedy, went additional in criticizing the corporate over the Swift ticketing subject. He mentioned whoever at Stay Nation was accountable for the incident “must be fired.”

Within the again half of the listening to, a number of the focus shifted to doable options – however there have been no simple solutions.

Some lawmakers targeted on the flexibility to resell tickets. Whereas this feature will be helpful for patrons who want to alter plans, it might probably additionally assist prop up the scalping market.

When senators mentioned whether or not limiting the flexibility to switch tickets would assist, Stay Nation’s exec was in favor of it. However the SeatGeek CEO mentioned this would possibly solely entrench Stay Nation’s dominance, because it holds the type of market share that might power customers to solely transact there within the absence of different resale market choices.

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

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