The swiftest inquisition
Taylor Swift fans were left frustrated this week when they were unable to purchase pre-sale tickets for Swift's first tour in 5 years. At the centre of the chaos is online booking platform Ticketmaster, which crashed following “unprecedented demand”. The company eventually cancelled the rest of the planned public ticket sale that was slated to start today.
The crux of the complaint against the company has its origins in the 2010 merger between the world's largest ticket provider, Ticketmaster, and the world's largest concert promoter, Live Nation. This formed Live Nation Entertainment, which now has a near monopoly on live events with three distinct lines of business in concerts, ticketing, and sponsorship & ad revenue.
In terms of revenue, Live Nation remains the headline act, with concerts taking in $10.1bn, and ticketing only $1.6bn, in the first nine months of 2022. But running live events is a costly business and, after paying for the performer, the venue, agents, producers and everything else, margins in that business tend to be slim. The ticketing side, however, has much lower overhead costs — raking in an operating profit of some ~$450m so far this year, a margin north of 28%.
The Swift fiasco is now reigniting accusations that Live Nation Entertainment is too powerful, too profitable and is strangling competition in live entertainment. Senator Amy Klobuchar, who chairs the Senate Judiciary Subcommittee on Competition Policy, criticized the company for continuing to "abuse its market position".