| Type | Subsidiary of Live Nation Entertainment |
|---|---|
| Industry | Live Entertainment |
| Founded | 1976 in Arizona by Albert Leffler, Peter Gadwa, Gordon Gunn & Charles H Hamby Jr. |
| Founder(s) | [1] |
| Key people | Irving Azoff, CEO Eric Korman, President Terry Barnes, Chairman Brian Regan, EVP and CFO |
| Products | Ticketing technology, Ticket Sales, Ticket Resales, Marketing, Distribution of event tickets and information, support of venue renovation |
| Revenue | Sold 142 million+ tickets valued at $8 billion in 2007 |
| Employees | 6,678 |
| Parent | Live Nation Entertainment |
| Website | ticketmaster.com |
Ticketmaster Entertainment, Inc. is an independent American ticket sales and distribution company based in West Hollywood, California, USA, with operations in many countries around the world. In 2010 it merged with Live Nation to become Live Nation Entertainment. Most US ticket sales for US venues are fulfilled at Ticketmaster's two main fulfillment centers located in Charleston, West Virginia, and Pharr, Texas. Typically, Ticketmaster's clients (promoters) control their events, and Ticketmaster acts as an agent, selling the tickets that the clients make available to them.
Ticketmaster sells many of its tickets online, some via phone, and some through its many ticket outlets.
On 10 January 2008, Ticketmaster completed the acquisition of Paciolan Inc. after the deal was subject to months of litigation over the potential breach of antitrust laws. Paciolan is a developer of ticketing system applications and hosted ticketing systems.[2][3] In January 2009, Ticketmaster acquired a UK ticket exchange site, Getmein.com.[4] Getmein is a ticket exchange site that allows sellers to list the tickets at whatever price they choose. It claims to have over 500,000 tickets listed at any one time.
On 10 February 2009, Ticketmaster and Live Nation, the largest concert promoter, officially announced their merger deal.[5] After almost a year of review, the two companies merged on 25 January 2010, under the name Live Nation Entertainment (NYSE: LYV).[6]
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Ticketmaster does not receive any of the advertised ticket price when a ticket is sold. Instead, income is derived from service fees. Consumers often find these markups unreasonably excessive, especially because there are many instances where no alternative purchase method is offered that would allow avoidance of the fees. This business practice, along with a dearth of competitors, has led many to view Ticketmaster as monopolistic.[7] Alternative ticketing companies have emerged but due to Ticketmaster's exclusive agreements with a large percentage of venues the company does not need to lower service fees. In some instances customers may be able to buy tickets directly from the venue, which may make its own service charge.
Typical fees added to a ticket's face value include:
As an example of a typical markup, as seen on Ticketmaster.com, a ticket to see the Cincinnati Cyclones play at US Bank Arena on February 9, 2011 cost $13. In addition to this, Ticketmaster levies fees of $4.05 (processing charge), $2.50 (print your own ticket charge) and $4.35 (convenience charge), a total of $10.90, 84% of the ticket's original price. In most instances service charges amount to up to 50% of a ticket's face value.[8]
Ticketmaster has been criticized from those who claim its fees are excessive, with 40 British MPs signing an early day motion criticizing the company for overcharging and for the lack of transparency in its pricing structure.[9]
In 2003, a class action lawsuit was filed against Ticketmaster LLC. in Los Angeles District Court alleging that Ticketmaster misrepresented the exact nature of the shipping and processing fees included in certain ticket sales. That dispute then spilled over into a related lawsuit filed in 2010 against Ticketmaster’s liability insurance carrier Illinois Union Insurance Company, a subsidiary of ACE Limited (NYSE: ACE).[10]
Ticketmaster frequently obtains agreements to become the sole provider of tickets for large venues, in keeping with a business strategy it has used since the 1980s when it consolidated regional ticketing services into a single entity. In many cases, acquiring this exclusivity requires Ticketmaster to pay substantial "signing bonuses" to venues, sometimes millions of dollars. Although this practice can significantly reduce the profitability to Ticketmaster of these exclusive relationships, to date using these bonuses has enabled them to maintain venue exclusivity as a competitive strategy, though the future viability of this strategy is unclear as the Internet as the primary sales channel for tickets makes exclusivity a less attractive option for venues.
Ticketmaster is the subject of frequent complaints in the media due to high ticket service charges.[11] Notably, in the 1990s, Pearl Jam's complaints about Ticketmaster led the U.S. Department of Justice to open an antitrust investigation into the company's practices. The investigation was ultimately dropped because, according to former U.S. Attorney General Janet Reno, other competitors were entering the ticket industry, and there was a lack of evidence to proceed.[12][13]
Recently, there appear to have been questionable dealings between Ticketmaster and TicketsNow.com (which was acquired by Ticketmaster in January 2008). An anonymous source alleges that a TicketsNow executive assisted with the sale of more than $1 million worth of Radiohead tickets on the TicketsNow website[14] There appears to be a conflict of interest when a company operates in both the primary and secondary sales markets, and furthers claims about the negative implications of Ticketmaster's monopoly on ordinary consumers.
Competitors include Viagogo, New Era Tickets,Wantickets, Tickets.com, ShowClix, StubHub, Classictic, TicketBiscuit, Ticketbooth Enta USA and others. TicketWeb, a Ticketmaster subsidiary also offers lower fees. These companies are typically excluded from primary ticket sales for major-league sports events in the U.S. (with the exception of Major League Baseball, which, as noted below, is now the owner of Tickemaster's number two competitor Tickets.com).
A new brand of competition has emerged in the form of companies selling ticket futures contracts. Web-based companies such as Yoonew and TicketReserve offer ticket futures which guarantee customers tickets to big games such as the Super Bowl and World Series if the team for which they have futures contracts makes it. Though the price of ticket futures are often substantially lower than the price of actual tickets to the big event, customers risk losing their investment if their team does not make it. Yoonew, in addition, provides an exchange where ticket futures can be traded between users.
Ticketmaster is the primary ticket seller for 27 of the 30 NHL teams and 28 of 30 NBA teams, but in 2005, Major League Baseball acquired Ticketmaster rival Tickets.com. Some analysts expect MLB to stop using Ticketmaster for the sale of its approximately 100,000,000 baseball tickets per year once current contracts with Ticketmaster have expired. Thus, when the Ticketmaster contracts end, finding sources for primary or "box office" tickets online may become a difficult task and vertical ticket search engines may become indispensable for finding primary ticket outlets.
Also of concern to the company is declining sales in the highly profitable concert business. Off by double-digit percentages in 2005 from 2004, the summer concert season is a major profit center for the company with its high per-ticket prices and accompanying high service fees.
Ticketmaster has had only limited success in the secondary ticketing market. In September 2003, Ticketmaster announced plans to sell tickets in internet auctions, which would bring the price of tickets closer to market prices, but its market share compared to that of eBay or Stubhub remains small, and Internet auctions are still a relatively minor part of its business. Indeed, since around the time of the 2003 announcement, Ticketmaster has lost the lead in the secondary ticketing market to new entrants like Stubhub, who have developed a popular and effective person-to-person market for tickets. Recently, Ticketmaster President Sean Moriarty appeared on a story about the ticketing business on NPR and pleaded for legislation that would make the selling of tickets from person to person illegal except through Ticketmaster's own product for this purpose.[15] Ticketmaster established the Ticketmaster Ticketexchange to try to compete with Stubhub, their main tagline being that tickets are 100% guaranteed to be authentic, since they are sold through the season ticket holder's account. (Some NFL teams require people to be on the waiting list in order to use the service. The New England Patriots, New York Giants and New York Jets require waiting list memberships.)
In Canada, Ticketmaster is trying to overturn anti-scalping legislation that is in place in some provinces. They are lobbying the Ontario and Manitoba governments to review rules banning the resale of tickets.[16] The Premier of Ontario, Dalton McGuinty, stated on March 23, 2009 that his government is planning to introduce legislation which would prevent Ticketmaster from reselling tickets through its TicketsNow website after they would not agree to do so when asked by the Province.[17]
Also in Canada, front page news in early January 2008 was a story about how a show for AC/DC in Vancouver was sold out in minutes, only for tickets to be available for higher prices on TicketsNow. The resale site also charged up to $1,199 for a $44 face-value ticket to a recent Killers concert in Toronto — roughly a 2,500% markup.[18]
In an article by the CBC, Ticketmaster has been quoted as saying
In late summer 2009, Ticketmaster developed a new way to resell tickets that attempted to shut out brokers and scalpers.[20] This new system relies on a "paperless" ticketing platform, which makes customers prove their purchase by showing a credit card and ID.[20] Paperless tickets account for fewer than 1% of all ticket sales.[21]
The company's use of personal information is more aggressive than most: a term that users wishing to purchase from their website must agree to is to receive Ticketmaster marketing:
This term is actually somewhat less aggressive than previously, following criticism[23][24] and accusations of spamming. However, users of the site automatically receive a regular "My Account" email, which comes with the notice "By signing up to Ticketmaster you agreed to receive this email. If you do not want to receive it, you can edit your preferences on the site". In other words, Ticketmaster deliberately does not allow users to opt-out at signup from unwanted email in order to increase the audience for its marketing, and the unsubscribe procedure requires the user to login to a web page: there is no simple unsubscribe link or email address.
In 1994, the rock band Pearl Jam appealed to the Antitrust Division of the United States Department of Justice, complaining that Ticketmaster adopted monopolistic practices and refused to lower service fees for the band's tickets. At the time, Pearl Jam wanted to keep ticket prices under $20.00 for their fans, with service charges no greater than $1.80. The company had exclusive contracts with many of the large venues in the United States and threatened to take legal action if those contracts were broken. The Justice Department ruled in favor of Ticketmaster [25] which culminated in the cancellation of the 1994 Pearl Jam tour. Four years later, Pearl Jam resumed their relationship with Ticketmaster.[26][27][28]
On April 28, 1997, Ticketmaster sued Microsoft over its Sidewalk service for allegedly deep linking into Ticketmaster's site. The suit was settled after a two-year legal battle in which Ticketmaster claimed that linking to specific pages on an Internet site without permission was an unfair practice.
In 2003, the popular jam band The String Cheese Incident and its associated booking group, SCI Ticketing, sued Ticketmaster arguing that Ticketmaster's exclusive use contracts at most US venues was a breach of the Sherman Anti-Trust Act. This lawsuit was settled in 2004 with no publicity of the settlement terms.[29]
In 2009, Ticketmaster faced several lawsuits across North America, claiming they conspired to divert tickets to popular events to its ticket brokering website TicketsNow, in which the same tickets were sold at premium prices.[30] This also raised the ire of rock legend Bruce Springsteen, who said he was 'furious' at Ticketmaster,[31] and "...the one thing that would make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near monopoly situation in music ticketing".[32]