Written & Narrated by Cory Doctorow
Have you noticed exorbitant fees when trying to buy tickets to see your favorite artists? That’s because Ticketmaster holds a monopoly on the live music industry, and won’t face any real consequences for gouging their customers. But, the Biden administration can change that by putting antitrust enforcement back on the agenda.
Cory Doctorow breaks it down below in this edition of The Classroom by More Perfect Union
A few weeks back, Bruce Springsteen fans were outraged to find that ticket prices for his current tour were as high as $5,000.
[News clip]: Springsteen’s fans have never felt cheated, until now.
[News clip]: $5,000 bucks a piece.
[News clip]: $5,000 dollars.
[News clip]: Would you really pay $5,000 to see your favorite band?
[News clip]: No.
[News clip]: I can’t do that.
[News clip]: That’s a bit much.
We can thank a predatory new business practice introduced by Ticketmaster and they call it “Dynamic Pricing.” It’s an experimental technique and it’s pissed off everyone from fans, to venues, to performers themselves—including The Boss.
So, how can Ticketmaster get away with it? Because they are the bullies of the music industry playground.
Ticketmaster and Live Nation, which is the same company, but we’ll get to that later, can basically do whatever they want because they’ve seized control over every aspect of the live music industry by creating a monopoly.
This ticketing cartel has the power to destroy venues and artists who refuse to work with them, and even have their own resale platform where they encourage and incentivize ticket resellers to gouge fans.
All of these exploitative practices make Ticketmaster executives very, very rich. Live Nation CEO Michael Rapino made $70.6 Million in 2017. That’s one of the largest CEO pay packages ever. But here’s the twist: this entire monopoly was helped along and enabled by our elected leaders.
So, how did we get to a point where the people in charge of preventing monopolies are enabling monopolies?
And more importantly, how can we take back power from Ticketmaster and their monopolistic brethren? Let’s take a look.
I’m Cory Doctorow, and this is The Class Room, from More Perfect Union.
How Did We Get Here?
To explain how we got here, I’m going to have to give you a brief history lesson on antitrust law—the government’s toolbox for fighting monopolies. I wrote a whole book about it: Chokepoint Capitalism, with Rebecca Giblin.
Now, the glory years of antitrust were right after FDR’s New Deal. The government saw that monopolies weakened worker power, and so they set to breaking up giant corporations and preventing future monopolies from forming. Back then, monopolies were viewed as a threat to the very idea of democratic citizenship.
Then in the 1970’s, a conservative legal scholar named Robert Bork and his pals at the University of Chicago School of Economics started spreading a very different view of antitrust.
They said, forget all that high-minded crap about “democracy” and “citizenship.” Instead, anti-monopoly regulators should limit themselves to thinking about “consumer welfare.” Basically, they focused on short-term goals like lowering prices rather than promoting competition in and of itself, and most importantly, preventing the gross power abuses of monopoly.
Antitrust enforcement fell by the wayside as a priority. The Democratic Party platform didn’t even mention antitrust between 1992 and 2016. This is what allowed for the growth of monopolies in every industry—meatpacking, tech, banking, finance, eyeglasses, cheerleading, beer, and in 2010, the music industry.
For 15 years prior to the merger, Ticketmaster was the dominant provider of ticketing services in America, controlling 80 percent of the market. Live Nation was the largest concert promoter in America. They controlled America’s biggest concert venues and the artists themselves. They managed 200 major artists from Miley to Willie.
And Live Nation was Ticketmaster’s number one customer. Live Nation used Ticketmaster to sell tickets for venues and artists that Live Nation managed. But in 2007 Live Nation thought, “Hey, maybe we should build our own ticketing platform.”
Ticketmaster did not like that. And so, just two years later, Live Nation and Ticketmaster announced a merger.
Which sounds like a clear antitrust problem. Isn’t someone supposed to be on top of that? At the time the Obama DOJ’s top antitrust cop was Christine Varney who said, “I understand that consolidation has been going on in the industry for some time. Those are meaningful concerns, but many of them are not antitrust concerns.”
So there you go, the two most powerful companies in the live music industry joined forces and it’s not “an antitrust concern.” They were slapped with a few restrictions when they merged… a few.
Ticketmaster’s Consent Decree
Antitrust mostly relies on two kinds of remedy—structural and conduct. Structural remedies are about actually breaking up parts of a giant consolidated empire. Conduct remedies are about changing behavior—regulating anti-competitive business practices and regulating how giant companies wield their power. Conduct remedies are pretty ineffective because they’re really hard to actually enforce. The consent decree that the TicketMaster/Live Nation corporate empire got was a mix of structural and conduct remedies, but essentially it all boiled down to a pinkie swear.
Live Nation had to promise they wouldn’t use their power over events and venues to grow their ticketing dominance. The combined company violated their consent decree with impunity because, like a playground bully, they had created a culture of fear where no one else in the live music industry would speak out against them.
When we interviewed people for our book, we always gave them the option not to be named but almost nobody took us up on it—except those people we spoke to about Live Nation. In most cases, those sources were anxious about even speaking off the record. There’s no ‘conduct remedy’ that can address that kind of power. Structural remedies are more effective because they force monopolies to break off portions of their power.
Ticketmaster was forced to sell portions of their empire to much smaller companies, but it was barely a dent. Now 12 years later we’re seeing a company whose power is so vast they can sell $5,000 tickets to see a guy who sings “Poor men wanna be rich, rich men wanna be king, and the king ain’t satisfied til he rules everything.”
We do mean everything. They’ve also dominated the ticket resale business. They have their own resale software called TradeDesk and in 2018 an investigation revealed that Ticketmaster had encouraged and incentivized resellers to set enormously high ticket resale prices. Ticketmaster loves resales for one simple reason: they get to charge service fees twice, and those resales net them a second, more lucrative fee on the same product, the one they’ve already sold once.
Monopolies Are Everywhere
Live music isn’t the only creative industry that has fallen prey to giant monopolies. Just three massive conglomerates own the major labels and publishers that control the world’s music. Those labels designed the streaming industry, which is dominated by Spotify, which itself was partially owned by those three same labels.
Now that Disney owns 21st Century Fox, just one company controls 35 percent of the U.S. box office. The publishing industry is controlled by five big companies. That number was six when we started writing our book, and if they get their way, it’ll soon be four.
That’s just wildly quick consolidation. Yes, it’s always been hard to be an artist but the difference today is that corporations are extracting the maximum capital from artist’s labor and they’re not sharing it anymore.
We creative workers, we know that our music, movies and other culture markets are in trouble. In the past we were told to rely on copyright to hold on to our rights and our values. But copyright would do nothing to solve a problem like Ticketmaster or any of these other monopolies.
Giving us more copyright in these monopolized markets is like giving more lunch money to your kid, who’s getting his lunch money taken off of him by bullies everyday. No matter how much money you give him, the bullies are going to take that money everyday too.
And the problem isn’t just that artists are getting ripped off. And it’s not just that fans, and small business owners are getting ripped off. It’s that monopoly threatens the overall health of our democracy itself.
Break Them Up
Now I’ve got good news. The Biden administration—yeah, the Biden administration—took a strong stance against monopoly power. Remember when we were talking about the prevalence of the Bork and that theory of antitrust that said we shouldn’t do anything unless prices are going up?
This administration came out against that sort of thinking, and they handed down an executive order that charged the DOJ to police monopolies and protect “consumer autonomy and privacy.”
That’s an admission that monopolies are about more than just prices. If they’re serious about this, the Ticketmaster monopoly has to be on the DOJ’s agenda. We need to break up the bullies.
Ticketmaster bullies venues into not working with their competitors, they bully smaller artists by denying them management, they bully big artists by controlling their ticket prices and letting their fans down, and they bully customers into paying exorbitant prices for tickets, not only by enabling resellers, but by collecting massive fees on every ticket those resellers sell.
All of this amounts to an environment where competition has been totally removed from the live music ecosystem, making it worse for everyone except Ticketmaster and Live Nation executives who are making millions of dollars a year.
We have to act now. Biden’s DOJ should take up and review this case due to Ticketmaster’s continued violations of their consent decree. We need to unwind this monopoly and break them up.