Steve Provider
How would you spell the monopoly that is killing the live music industry? Live Nation Entertainment Inc.
It may not be an exaggeration to say that the decisions made by the Obama Justice Department have played a central role in American musical life. But more and more people think that at least the nail in that coffin was put in favor of his Live Nation and his Ticketmaster merger in 2010.
By the early 2000s, event promoter Live Nation and ticket provider Ticketmaster were the 900-pound twin gorillas of the live music industry. In 2007, the two companies accounted for more than 80% of his market share. At that point, Live Nation announced they wanted to start their own ticketing company. Calm opinions prevailed, and after discussions with a supposed competitor, Ticketmaster, it was decided to merge to form a new company. What is the spelling of Monopoly? Live Nation Entertainment, Inc. (referred to as LNE).
The merger was reviewed in 2010 by Christine Varney, President Obama’s Chief Antitrust Counsel at the Department of Justice. She said the merger “raised significant concerns, but not antitrust concerns,” and issued a consent order. There are two types of regulatory remedies (that is, how companies exercise their power). Structural remedies can be implemented and are effective. Conduct regulation, which is much more difficult to define and enforce, is not. In granting consent, the Department of Justice slapped several restrictions that combined conduct and structural restrictions. The LNE had to promise (I love the word “promise”) not to use the power of venues over events and venues to increase their ticket dominance. The structural element was that Ticketmaster had to sell part of its holdings to a smaller company, which it did.
Cory Doctorow describes these treatments in a video made for The Classroom for a More Perfect Union: LNT has grown by acquiring other ticket companies, promoters and festivals such as Lollapalooza and Bonnaroo. Doctorow calls the LNT a “ticket cartel.” It is now a giant that owns over 70% of his ticket and live event venue market. That rule, he argues, has created a “culture of fear.” None of the video interviewees in the live music industry dared say anything against his LNT.
Those who have purchased tickets for major events are probably lagging behind a dizzying line-up of processing, facilities, and advertising dollars. LNT not only encourages but also incentivizes resellers to prey on their fans. And why? LNT is The second Fees from resellers. To make matters worse, LNT introduced an innovation that has taken the retail industry by storm: dynamic pricing. This strategy of pushing prices ever higher led to his $4,000 ticket to see Bruce Springsteen. There is a difference between dynamic pricing in ticket sales and his competing Uber drivers. There is a ready-made and empowered industry of resellers ready to secure the best seats.
If the government does not oppose the LNT monopoly, it will not stop the cultural sector from following the same path as the media, meat processors, publishers, nursing homes and high tech. The Biden administration has verbally expressed its opposition to monopolies. In 2021, five members of the U.S. House of Representatives signed a letter urging Biden to launch an investigation into the merger, arguing it would remove much-needed competition from the live music ecosystem.
On October 19, a coalition of advocacy groups led by the American Economic Liberties Project called on the Justice Department to cancel the merger. and advocates for more aggressive antitrust enforcement. They say, “Live Nation is essentially using its concert promotion services to bully venues not to use the few competitors that Ticketmaster still has… that venues will not use those services.” If they choose, Live Nation will retaliate by effectively boycotting the venue.Because Live Nation controls much of the market for concert promotion, the ability to book performers contracted with Live Nation depends on the venue. could affect the viability of
LNT CEO Michael Rapino says it could make $30 million in 2022 if its “performance metrics” are met. It would be nice for the LNT not to cater to the bloated profits they get from cornering the market, but there is no competition…
Steve Provider I write on a variety of subjects, but mostly art. He is a musician and blogs about jazz here.
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