Ticketmaster is evil and should be destroyed

I realize this is off-topic (and perhaps the first steps in retooling my focus here), but this needs to be said. Ticketmaster is evil and should be destroyed.

In the August 10 & 17, 2009 issue of the New Yorker, John Seabrook analyzes the root of the Ticketmaster/Live Nation monopoly. The full article is not available online (unless you’re a registered New Yorker subcriber). While his overview of the concert business and how Ticketmaster rose to power is insightful, he overlooks one incredibly vital fact that makes Ticketmaster an evil scourge on the music industry. It’s the sort of oversight that completely changes the discussion, and by its simple omission, almost allows Ticketmaster to seem like a reasonable service entitled to charge a fee for its services.

Much of the article talks about the sale of Bruce Springsteen tickets for two shows at the Izod center in the Meadowlands. A Ticketmaster glitch re-directed ticket buyers to TicketsNow, a Ticketmaster owned ticket re-seller where they were offered tickets at inflated, secondary market prices while regularly priced tickets were still available. The outcry prompted a Congressional investigation and nearly derailed the merger of Ticketmaster and LiveNation, it’s only reasonable competition.

There are some fascinating numbers that the article throws out. There is an active secondary market for concert tickets, and in a textbook example of free-market capitalism, the open price wars for a limited commodity generate a lot of money. A lot. Seabrook puts one estimate in place that suggests Springsteen lost a potential $4 million in ticket sales on those two shows at the Izod center alone by selling tickets with fixed prices. That’s $4 million that goes straight to scalpers that the artist, venue, or promoter could lay a reasonable claim to deserving.

Ticketmaster is none of those, but has found insidious ways to horn in on that action. To get their cut, they add in ticket “convenience fees” that can run as high as 20% or more of the actual ticket price. To the average consumer, that’s pure parasitism. The ticket price and the overinflated t-shirt costs go to the artist. The over-inflated parking and beer costs go to the venue. The prices are nuts, but at least the money is going to the parties with a tangible interest in creating the event at hand. It’s the $10 per-ticket fee that goes to Ticketmaster who simply charge for the privilege of buying a ticket that has no sensible frame of reference for the consumer.

Lost in all the ticket industry monopoly discussion is an important distinction. Ticketmaster and LiveNation can get away with charging outlandish fees because their clients don’t have any real competition – and by clients, I mean the artists themselves. If Bruce Springsteen wants to play the Meadowlands, he has to sell tickets through Ticketmaster, because the Meadowlands has a deal to exclusively sell tickets through Ticketmaster. If the Boss wants to tour, it’s entirely his privilege to decide what tickets should sell for. He’s the artist, he’s putting on the show, and he’s the reason 80,000 fans will open their wallets for the chance to see him do his thing. If he decides its in his financial interests to run a dynamically priced auction, or if he wants to sell every ticket for $10, that’s his call. But just as consumers can’t choose which vendor to buy tickets from, the artist can’t choose who they want selling those tickets.

It’s that venue monopoly that prevents Ticketmaster from pricing their fees competitively. They have no incentive to lower their prices because they don’t have any competition. If there were three companies who could handle ticket sales for the Meadowlands, then Ticketmaster, LiveNation, and hypothetically-existent competitor #3 would have to adjust their pricing to win the job of selling tickets. Bruce might want to keep ticket prices low and the associated fees low. Pearl Jam can use some hippie-loving wristband system. Madonna might open up the market for dynamic pricing and tack on a $15/ticket fee. In either case, it’s the artist making the call, and not the middleman.

Ticketmaster is a vendor. They can try to glamour up their business all they want, but at the end of the day, they’re no different than a bored minimum wage worker sitting behind plexiglass at the movie theater. Consumers aren’t stupid, and neither should Ticketmaster be expected to work for free. We pay Moviefone a dollar surcharge for movie tickets, which is 10% of the ticket cost in most markets. Why should the same service at a larger venue cost 10 times that amount for the same service? Plus, at least half the concert-going audience can recall the days prior to these insultingly-labelled “convenience fees”. We know these ridiculous surcharges are drummed up by Ticketmaster to line their own pockets, but unlike the $13 beers at Dodger Stadium, consumers get nothing tangible for those fees. If it costs me $1.50 to use an ATM in a remote corner of Malaysia, and $1.50 to purchase a movie ticket online, there’s no defending a $10 fee for the same service to see the Boss.