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Ticketmaster

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Ticketmaster
Company typeSubsidiary of Live Nation Entertainment
IndustryLive Entertainment
Founded1976 in Arizona by Albert Leffler, Peter Gadwa, Gordon Gunn & Charles H Hamby Jr.
Founder[1]
Key people
Nathan Hubbard, president; Jared Smith, president of North America; Mark Yovich, president of Ticketmaster International; Kip Levin, executive vice president of product; Joe Manna, CTO.
ProductsTicketing technology, Ticket Sales, Ticket Resales, Marketing, Distribution of event tickets and information, support of venue renovation
RevenueSold 142 million+ tickets valued at $8 billion in 2007
Number of employees
6,678
ParentLive Nation Entertainment
Websiteticketmaster.com

Ticketmaster Entertainment, Inc. is an 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. As a primary ticket outlet, 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.

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] Ticketmaster sold Paciolan to Comcast-Spectacor in 2010. 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]

Service fees

Ticketmaster does not receive any of the advertised ticket price when a ticket is sold.[citation needed] Instead, income is derived from service fees.[citation needed] 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.[citation needed]

Typical fees added to a ticket's face value include:

  • Service Charge – This is Ticketmaster's charge for the general service they provide and maintain. The amount paid may depend upon the method of payment (by phone, online, or in person).
  • Building Facility Charge – This is determined by the venue, and not Ticketmaster.
  • Processing Charge – This is Ticketmaster's charge for processing your order and making the tickets available to you. This is usually not a per ticket charge, but rather a per order charge.
  • Shipping Charge, E-Ticket Convenience Charge, Will Call Charge – Ticketmaster charges a fee for ticket delivery, whether the tickets are mailed to the customer, printed out at home, or collected from the venue. The charge for printing out the ticket at home is often higher than the fee to have the ticket physically mailed to you. In other sectors, such as airline ticketing, companies usually do not charge (and in some cases even offer a discount), for electronic ticketing. Economist Emily Oster of the Chicago Booth School of Business suggests that this reflects the lack of competition in the industry, with customers willing to pay more for the convenience of obtaining the tickets immediately due to a lack of alternate options.[7]

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 forty 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 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]

Ticket sales market

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 New Era Tickets,AskaTicket, Tix, TicketForce, Ticketfly, DigiTickets, Viagogo, Veritix, Wantickets, Tickets.com, ScoreBig, ShowClix, StubHub, Classictic, TicketHurry, TicketBiscuit, Ticketbooth Enta USA, HoldMyTicket 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[who?] expect MLB to stop using Ticketmaster for the sale of its approximately 75,000,000 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, "You and I both know there is a thriving ticket-broker industry ... so the law is really a fiction ... We very strongly feel the law needs to be modernized to reflect the reality of internet commerce. By keeping a price cap in place, you're really just driving the [resale] business into the shadows."[19]

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][dead link]

Privacy

The company's use of personal information is more aggressive than most; users wishing to purchase from their website must agree to receive Ticketmaster marketing:

"By completing this registration form you indicate that you consent to Ticketmaster sharing your email address and other information with those who provide the event, and that you consent to those who provide the event using your information to contact you by email or other means to send you marketing or other messages or using or disclosing your information in other ways. By completing this registration form, you also indicate that you consent to Ticketmaster contacting you by email or other means to send you marketing or other messages and using and disclosing the information you submit, as described in the Ticketmaster Privacy."[22]

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.

Issues and hearings regarding anti-competitive practices

In 1994-1995 the LA Times published a series of articles by reporter Chuck Philips that helped trigger a federal anti-trust investigation.[25] In 1994 Ticketmaster's tickets often had surcharges as large as 25% of the base ticket price. Moreover, an unwanted and unnecessary “tying” of services (such as parking and “conveniences”) to the cost of the concert placed an unfair burden on customers and constituted an anti-competitive practice according to a legal analysis [26] of investigative pieces by Philips.[27][28][29][30][31][26][32]

The grunge band Pearl Jam petitioned 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 [25] Pearl Jam wanted to keep ticket prices under $20.00, with service charges no greater than $1.80. Fred Rosen of Ticketmaster refused and because Ticketmaster had exclusive contracts with many of the large venues in the United States they threatened to take legal action if those contracts were broken. Pearl Jam was forced to create from scratch its own outdoor stadiums in rural areas to perform. Pearl Jam’s efforts to organize a tour without the ticket giant collapsed which Pearl Jam said was further evidence of Ticketmaster’s monopoly. An analysis of Philips' investigative series [28][29][30][31][32][33] in well known legal monograph [26] concluded that it was hard to imagine a legitimate reason for their exclusive contracts with venues and contracts which covered such a lengthy period of time. The authors said, “The pervasiveness of Ticketmaster's exclusive agreements, coupled with their excessive duration and the manner in which they are procured, supported a finding that Ticketmaster had engaged in anticompetitive conduct under section 2 of the Sherman Act.” Members of Pearl Jam testified on Capitol Hill on June 30 of 1994. Pearl Jam alleged that Ticketmaster used anti-competitive and monopolistic practices to gouge fans. Congressman Dingell (D-Mich.) after Pearl Jam’s testimony before congress wrote a bill requiring full disclosure to prevent Ticketmaster from burying escalating service fees. Pearl Jam’s manager said he was gratified that Congress saw the problem as a national issue.[34]

Later in the year the Justice Department opened an investigation into anti-competitive practices in the ticket industry. It continued for close to a year until July 6 of 1995 when the Justice Department abruptly closed its antitrust probe in a two-sentence press release.[35] Chuck Philips was told by sources close to the case that the investigation was closed due a combination of shortage of resources and the case being difficult and having uncertain prospects.[35] A spokesman for Pearl Jam told the LA Times Chuck Philips, “Unfortunately, those who will be most hurt by the Justice Department’s cave-in are the consumers of live entertainment…The consumers are the ones who ultimately pay for the lack of choice in the marketplace.”

Prominent lawsuits

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 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.[36]

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.[37] This also raised the ire of musician Bruce Springsteen, who said he was 'furious' at Ticketmaster,[38] 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".[39]

Key staff

  • Nathan Hubbard: CEO[40]
  • Terry Barnes: Chairman
  • Eric Korman: President
  • Rick Oliver: PMO

See also

References

  1. ^ "Ticketmaster Privacy Policy. Official Ticketmaster Site". Retrieved 2009-10-19.
  2. ^ Yahoo! Business[dead link] Form 10-Q for Ticketmaster
  3. ^ Ticketnews Ticketmaster Acquisition of Paciolan to Face Federal Review. 03 July 2007.
  4. ^ Telegraph UK Ticketmaster moves into UK concert resales]
  5. ^ Live Nation and Ticketmaster Agree to Merge New York Times. 10 February 2009.
  6. ^ Pelofsky, Jeremy; Adegoke, Yinka (25 January 2010). "Live Nation, Ticketmaster merge; agree to U.S. terms". Reuters.
  7. ^ a b The Economics Of Ticketmaster : Planet Money : NPR
  8. ^ The Washington Post http://www.washingtonpost.com/ac2/wp-dyn/A13496-2004Jun28?language=printer. {{cite news}}: Missing or empty |title= (help)
  9. ^ The Stage / News / MPs unite to challenge Ticketmaster's additional fees and charges
  10. ^ Ticketmaster LLC Locks Horns with ACE Group Company Over Errors and Omissions Coverage Ace Insurance Litigation Watch. 13 Jan. 2011.
  11. ^ CNN Money[dead link]
  12. ^ Oddities Continue With Ticketmaster And Pearl Jam
  13. ^ Lack of Evidence Cited in Ticketmaster Case
  14. ^ Ticketmaster scalps Radiohead tickets
  15. ^ NPR National Public Radio
  16. ^ CBC News CBC News. 09 July 2008.
  17. ^ Toronto Star Toronto Star. 23 March 2009.
  18. ^ CBC News CBC News. 02 January 2009.
  19. ^ CBC News
  20. ^ a b Ticketmaster tries to cut out scalpers again – Business – Retail – NBCNews.com
  21. ^ [1]
  22. ^ news.com.com
  23. ^ Gripe2ed[dead link]
  24. ^ Clickz
  25. ^ a b Philips, Chuck (June 8, 1994). "Pearl Jam vs. Ticketmaster: Choosing Sides : Legal file: The pop music world is divided over the Seattle band's allegations, which led to a Justice Department investigation into possible anti-competitive practices in the ticket distribution industry". LA Times. Retrieved 22 July 2012.
  26. ^ ="Ticketmaster 1">Philips, Chuck (May 17, 1991). "Ticket Flap: What Price Convenience?: Entertainment: A host of service fees, surcharges and taxes is riling concert-goers--and lawmakers". LA Times. Retrieved 22 July 2012.
  27. ^ a b Philips, chuck (February 7, 1995). "Congress May Get Tickets Measure : Pop music: Spurred by Pearl Jam's crusade, the bill would require ticket vendors to disclose fees". LA Times. Retrieved 22 July 2012.
  28. ^ a b Philips, Chuck (June 30, 1994). "Pearl Jam, Ticketmaster and Now Congress: America's biggest band sent shock waves through the music business when it filed a complaint with the Justice Department about Ticketmaster. Now, Congress is holding a hearing. How'd it all get so far?". LA Times. Retrieved 22 July 2012.
  29. ^ a b Philips, Chuck (June 8, 1994). "Pearl Jam vs. Ticketmaster: Choosing Sides : Legal file: The pop music world is divided over the Seattle band's allegations, which led to a Justice Department investigation into possible anti-competitive practices in the ticket distribution industry". LA Times. Retrieved 22 July 2012.
  30. ^ a b Philips, Chuck (June 17, 1995). "COLUMN ONE : The Ticket King's Path to Power : As Pearl Jam just learned, Ticketmaster's Fred Rosen gets what he wants. His tactics have earned him some foes, but even critics admit he has transformed the industry. Now he's eyeing new realms". LA Times. Retrieved 22 July 2012.
  31. ^ a b Philips, Chuck. "A Tangle Over Tickets : Ticketmaster, Target of Lawsuits, Says It Offers Broad Service". Retrieved 22 July in a monopolistic gouging of fans for services from which they could not benefit. {{cite news}}: Check date values in: |accessdate= (help) Cite error: The named reference "Ticketmaster 6" was defined multiple times with different content (see the help page).
  32. ^ Philips, Chuck (May 17, 1991). "Ticket Flap: What Price Convenience? : Entertainment: A host of service fees, surcharges and taxes is riling concert-goers--and lawmakers". LA Times. Retrieved 22 July 2012.
  33. ^ Philips, Chuck (August 12, 1994). "Company Town: Bill Would Require Ticket Fee Disclosures : Legislation: Rep. Dingell takes aim at concerns over prices customers pay to get into concerts and sporting events". Retrieved September 27, 2012.
  34. ^ a b Philips, Chuck (July 6, 1995). "Pearl Jam "U.S. Drops Ticketmaster Antitrust Probe : Entertainment: Abrupt closure of investigation lifts cloud of uncertainty over firm, catches others in industry off guard". Retrieved September 27, 2012.
  35. ^ Rolling Stone | News
  36. ^ SUTTS, STROSBERG LLP BARRISTERS & SOLICITORS | Class Action Lawsuit Commenced in Alberta Against Ticketmaster Entertainment, Inc., Ticketmaster Canada Ltd., TNOW Entertainment...
  37. ^ Knapton, Sarah (2009-02-05). "Bruce Springsteen 'furious' at Ticketmaster". The Daily Telegraph. London. Retrieved 2010-03-28.
  38. ^ "Bruce Springsteen "Furious" At Ticketmaster, Rails Against Live Nation Merger". Rolling Stone. February 4, 2009. Retrieved 2009-10-19.
  39. ^ Walmart is new Ticketmaster vendor | Des Moines Register Staff Blogs
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