Live Nation executive testifies about Taylor Swift concert ticket fiasco. Ticketmaster’s failure to fulfill orders for Taylor Swift’s upcoming tour left millions of fans without tickets, and lawmakers questioned the company’s senior executive.
Two months after the Taylor Swift ticketing crisis renewed public scrutiny of the business, Ticketmaster parent company Live Nation Entertainment president and CFO Joe Berchtold testified before a Senate committee on Tuesday.
Berchtold added, “We apologize to the fans,” following the onsale, and “I restate now.” We sincerely regret any inconvenience this may have caused Ms. Swift. We know we can and will improve.
He said that the “extraordinary demand for Taylor Swift tickets” caused Ticketmaster to be “struck with three times the amount of bot activity we had ever encountered.” Because of the bots’ actions, we had to stop taking orders temporarily. In retrospect, this was the root cause of our disastrous customer service.
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Swift’s new five-month Eras Tour tickets went on sale in the middle of November on Ticketmaster. The tour, which features 52 gigs in various stadiums around the United States, begins on March 17. Fans unable to get tickets were understandably frustrated by the website’s inability to keep up with demand. Users reported that Ticketmaster was slow to load and that they couldn’t buy tickets even with a verified-fan pre-sale code.
Swift herself commented on the situation as outrage rose among her following of dedicated fans. “It should come as no surprise that I am fiercely protective of my fans,” Swift wrote on Instagram in November. “It’s awful for me just to watch things happen with no remedy, and it’s tough for me to trust an outside entity with these relationships and loyalties,” the speaker said.
The absence of competition in the ticketing market has prompted the US Senate Judiciary Committee to hold a hearing titled “That’s The Ticket: Promoting Competition and Protecting Consumers in Live Entertainment.”
Minnesota Democrat Sen. Amy Klobuchar underlined the value of healthy competition as a cornerstone of the capitalist system in her opening statement. She cited Taylor Swift’s songs criticizing market consolidation, claiming that the United States is “all too familiar” with the practice.
She opined that healthy competition was essential for a thriving capitalist economy. Indeed, you can never have too much consolidation; as a tribute to Taylor Swift, I’ll argue that the United States knows this “all too well.”
According to Berchtold, establishments have a lot of autonomy in their business. Ticketmaster does not determine the number of available tickets, and “in most situations, venues establish service and ticketing fees,” he claimed.
Jack Groetzinger, CEO of ticketing site SeatGeek; Jerry Mickelson, CEO of Jam Productions, one of the top producers of live entertainment; and singer/songwriter Clyde Lawrence were all named as witnesses by the committee.
According to Groetzinger’s testimony, “the industry will continue to lack competition and struggle” as long as Live Nation is the preeminent concert producer and ticket seller for big venues in the United States.
Combined entity
The Swift ticketing debacle has resurrected decades-old criticism of Ticketmaster’s dominance as a topic of conversation in many American families.
The two most prominent corporations in the concert industry, Live Nation and Ticketmaster, announced their merger in 2009. Even the US Department of Justice voiced fear that the purchase would lead to at the time.
A 2010 court brief in the case expressed objections to the Live Nation-Ticketmaster combination, but the Justice Department ultimately decided to allow the deal to go forward. The Justice Department claimed in their filing that Ticketmaster’s market share among big concert venues was above 80%.
According to recent comments by Berchtold on NPR, Ticketmaster rejects that market share estimate and maintains it has, at most, slightly over 30% of the concert market.
On Tuesday, the top Democrats and Republicans on the Senate Judiciary Committee shared their thoughts on Ticketmaster’s market dominance.
Sen. Dick Durbin, chairman of the committee, argued that the merger created a situation in which “a single corporation” controlled the majority of the market for tickets to live events and that these problems were merely the symptom of a deeper issue.
According to Durbin, a legally enforceable consent agreement permitting Live Nation to complete the deal with limitations has yet to maintain competition successfully.
Republican leader on the panel, Sen. Lindsey Graham, acknowledged that “consolidation of power in the hands of the few can generate issues for the many.”
“Out of this hearing,” he said, “I hope we can develop a better experience of the customer being able to buy tickets to things you want to see without such a debacle” as the Taylor Swift ticketing process.
The customer always ends up footing the bill.
Fans were outraged when they couldn’t buy tickets for Taylor Swift’s concert promptly, and their outcry got the attention of legislators.
Legislators have used this fiasco to attack Ticketmaster’s monopoly on the live music industry, arguing that the company has little incentive to improve its services for the millions of customers who have nowhere else to go.
In a letter to Ticketmaster’s CEO in November, Klobuchar, who leads the antitrust subcommittee, said that the company’s dominance in the primary ticket market shields it from the competitive constraints that usually push companies to innovate and enhance their services. “That can lead to the kinds of severe service outages we saw this week,” the author warns.
Even Klobuchar’s fellow senator, Richard Blumenthal, shared her worries. The tour, he tweeted at the time, “is a clear example of how the Live Nation/Ticketmaster combination affects consumers by creating a near-monopoly.”
In a letter written in December, members of the House Energy and Commerce Committee requested a briefing from Live Nation CEO Michael Rapino on what had gone wrong and the company’s plans to address these issues.
The committee wrote in its letter, “The recent pre-sales ticketing process for Taylor Swift’s upcoming Eras tour raises concerns over the potential unfair and deceptive practices that face consumers and eventgoers, given that millions of fans endured delays, lockouts, and competition with aggressive scammers, scalpers, and bots.”
The committee stated that it intended to meet with Rapino to review the company’s ticketing procedures for large concerts and tours because it had previously voiced concerns about the industry’s business practices. Furthermore, it seeks information on Ticketmaster’s future development plans.
Senior lecturer in economics and business analytics at the University of New Haven’s Pompea College of Business, Brian A. Marks, expressed his wish that Swift could have attended the hearing.
The focus of this hearing is on Swift and the ticket sales fiasco. Marks added, “We can’t forget that Taylor Swift and her people worked out a deal with Ticketmaster to sell tickets to her show.”
Will lawmakers be interested in reviewing this agreement? It’s not clear to me that Ticketmaster’s dominance in the market caused the issues with Taylor Swift tickets, he said. Artists, especially those with a more extensive fan base like Swift, “are free to go elsewhere,” he said. “Tomorrow’s hearing might overlook this important detail.”
