Ticketmaster and Live Nation: A corporate monster-in-waiting

by Beacon Staff • April 1, 2009

It's an age old predicament: how to balance the art of music with the business of music.

Is it wrong to let the prospect of financial gain adulterate the purity of rock 'n' roll?

In recent years, a select few companies have begun to seize control of certain facets of this multibillion dollar industry. According to a 2005 Nielsen SoundScan study, four major groups controlled 81.87 percent of the U.S. music market.

But with the rise of file sharing and illegal downloading, record sales have dropped and the industry has returned to its failsafe cash cow: live music.

In early February, Ticketmaster and Live Nation made the official announcement that the two companies would merge.

If this merger can make it through the government's various regulatory systems, price gouging of epic proportions could occur, leaving the world of live music a post-apocalyptic, totalitarian wasteland ruled by one omnipotent corporation.

I exaggerate.

But the result would be less then positive for concert goers everywhere. Ticketmaster is the largest ticket supplier in the world, controlling the sale of tickets for over 80 percent of the venues in the United States alone.

Live Nation is the largest promoter of live shows in the world, owning or holding equity interest in more than 155 venues worldwide, including Boston's very own Paradise Rock Club and House of Blues.

On Feb. 24, the Senate Judiciary Subcommittee on Anti-Trust unsurprisingly bashed the proposed merger, seeing as such a super-corporation would have a near monopolistic hold on the market.

The whole ordeal even succeeded in pissing off Bruce Springsteen.

A letter to the subcommittee from Springsteen read by Jerry Mickelson of JAM Productions expressed the Boss's disgust at the way Ticketmaster treats its customers, saying that a single Ticketmaster/Live Nation hybrid is the only thing that could make the current ticket situation worse. Unfortunately, the Senate can't do anything to stop the merger.

That's up to the Federal Trade Commission and the Department of Justice. Or maybe Bruce can do something. He embodies all that is essentially American, right? I imagine that gives him some pull.

So why does the aforementioned Benevolent Ruler of New Jersey have such a beef with Ticketmaster? Well, in short, Ticketmaster ripped off his fans.

When tickets for his iWorking on a Dream/i tour went on sale through Ticketmaster in early February, fans were consistently redirected to Ticketmaster's secondary site, TicketsNow, which specializes in ticket resale at above face-value prices. According to a letter posted on Springsteen's Web site from him and his tour crew, customers attempting to log-in were sent to TicketsNow even when seats were still available at face value on the Ticketmaster site.

What Ticketmaster was doing is commonly known as "dicking people over," but they probably saw it as "a smart business decision." Ticketmaster then tried to pull the same trickery on devotees of Canada's native son, Leonard Cohen.

Silly Ticketmaster, don't you know it's entirely inadvisable to incur the wrath of both Bruce Springsteen and Leonard Cohen?

May they have mercy on you.

Confusingly enough, Live Nation started selling tickets on its own on Jan. 1, 2009. If Live Nation sticks with it, they could become the only viable competition Ticketmaster has ever encountered.

So why the merger? Total market domination, that's why. I guess it makes sense in a horrifically unethical and soul crushing sort of way.

According to the testimony of David Alto before the Senate subcommittee, Ticketmaster stands to lose 15 percent of its revenue to Live Nation. The next logical step for a cash-hungry corporate entity is, of course, to buy up Live Nation.

The resulting company is tentatively named Live Nation Entertainment. Such a corporation would completely eliminate any chance for competition in either market, creating less choice and allowing Live Nation Entertainment to set excessively high prices.

Remember those Jonas Brothers tickets you spent your last two paychecks on?

Well, next time, three paychecks might be needed. Let's just hope the Department of Justice and the Federal Trade Commission do their jobs and stop this travesty of the free market from occurring.

Capitalism has always had its place in rock 'n' roll. When it comes down to it, music is a commodity. People can't be blamed for trying to make money on the one thing that will always be sellable.

But when does entrepreneurial ambition go too far? Large entities like Ticketmaster and Live Nation provide a convenient, central system for the promotion and sale of live music. Ticketmaster, however, has overstepped its boundaries and needs to be held accountable.

Most college students can't afford tickets as it is. Ticketmaster knows that consumers have such an emotional attachment to music that some are willing to pay anything to see their favorite artists. This demand won't diminish, regardless of supply, and Ticketmaster exploits just that.

The advent of independent bands, labels and venues offers a shimmering beacon of hope. Ticketmaster and Live Nation may hold contracts with dozens of immensely lucrative clients ranging from Jimmy Buffet to Madonna, but there are hundreds of bands and venues out there who are still free from the bonds of these two giants.

Live Nation owns or operates more than 150 venues in Europe and North America and Ticketmaster holds exclusive vendor deals with more than 9,000 venues worldwide.

We'd like to think that the independent clubs and local scenes we all love aren't susceptible to such buyouts.

But if Live Nation Entertainment does what it potentially could do, those clubs will have no choice but to give in.

Plus, in today's economy, selling out doesn't look like all that bad of an idea.