Is Ticketmaster a Monopoly?

Ticketmaster has been a compelling force in the live events industry since its establishment in 1976.

Indeed, the company’s route to becoming the power it is today is one where consolidation and acquisition were the driving forces that led to its market dominance.

For example, as the sector flourished in the 1990s, Ticketmaster began aggressively buying out rivals to solidify its position in the space.

Furthermore, with each new investment came access to a larger customer base, allowing the enterprise to experience unprecedented growth. But with this rapid expansion also came increased competition from upstart ticketing companies looking to carve out their own piece of the pie.

Despite these obstacles, Ticketmaster continued its march towards total market control through mergers with Live Nation Entertainment and other strategic maneuvers.

Yet, this unchecked power was not without controversy or criticism, as advocates for regulation argued that it stifled competition and harmed consumers’ interests by creating barriers to entry for smaller players.

Nevertheless, Ticketmaster would no doubt dispute this somewhat negative appraisal, claiming that it’s a very successful venture operating in the same risky and dangerous waters as its rivals.

But to what degree is this true? And does the company’s business really amount to a full-blown monopoly?

Source: Unsplash

Who Owns Ticketmaster?

Since its merger in 2010, Ticketmaster has been owned by its one-time rival, Live Nation Entertainment. The deal, worth approximately $2.5 billion, saw the two most prominent players in the industry team up to create a super-company in the ticketing and venue management arena.

However, the marriage between Ticketmaster and Live Nation Entertainment has caused a stir among critics who contend it would establish a monopoly in the sphere and impede competition.

But despite these concerns, the Department of Justice eventually sanctioned the merger with specific limitations imposed to forestall anticompetitive conduct. Consequently, Ticketmaster has surfaced as one of the most influential and commanding players in the business, boasting an expansive network of partners, venues, and clients.

Does Ticketmaster Have Competitors?

According to a United States Department of Justice report, Ticketmaster commanded an 80% share of the primary ticketing market for major concerts between 1995 and 2010.

However, that’s not to say the company does not have any competition at all. There’s a smorgasbord of smaller rivals offering similar services, with such well known brands as StubHub, SeatGeek, and AXS.

What Qualifies As A Monopoly?

Critics frequently rush to dub an enterprise they dislike as being monopolistic.

However, when using this term in a disparaging context, it generally pertains to a company’s control over the supply of a specific commodity or service.

To illustrate, monopolies are distinguished by their exclusive power and preeminence within a given market, with little competition from other lone vendors or manufacturers. They can often sustain their positions due to high obstacles to entry, which creates an economic barrier that’s hard for rivals to penetrate.

Moreover, monopolies typically benefit from economies of scale and have no alternatives obtainable, further strengthening their position within the market.

As such, the negative implications associated with monopolies arise from the fact that they can exploit consumers and charge prices above what is considered fair in competitive markets where firms must continually innovate and improve products to survive.

Monopolistic tendencies suppress innovation while allowing companies considerable freedom over pricing decisions, ultimately leading toward restrictive behaviors that hurt customers without providing any benefits.

So, Is Ticketmaster An Actual Monopoly?

The existence of industry rivals – however small and less influential than Ticketmaster – would make it an arduous task to designate the company as an absolute monopoly. Nevertheless, Ticketmaster could still be deemed a monopoly if it possesses considerable market power and authority over pricing and distribution.

In this scenario, if Ticketmaster holds a dominant position – with its competitors unable to mount an offensive on its market share or pricing practices – it may be viewed as having monopoly-like control in the industry.

However, the word “monopoly” does not necessarily denote complete market dominance but refers to a single firm’s ability to exert appreciable market power and regulate output levels and pricing.

Therefore, while the existence of competitors may imply that Ticketmaster does not hold a complete monopoly, it does not necessarily indicate that it lacks substantial market power and influence.

Is Ticketmaster More Like an Oligopoly?

In addition to a simple monopoly, other market structures may better describe Ticketmaster’s business.

By way of example, imagine the scenario in which a small number of businesses exercise control over a market, and each enterprise possesses substantial power to set prices and output levels in the field.

If Ticketmaster’s rivals gain additional market portions and start to contest its pricing and distribution practices, Ticketmaster’s dominance would wane, and the territory would become more competitive.

This would trigger a transition from monopoly to oligopoly, whereby a larger quantity of contenders in the market would weaken the ability of each organization to control pricing and production, while rivalry would escalate.

Thus, the contrast between monopoly and oligopoly rests on the level of market concentration and competition that exists within the sector.

Why Are Tickets So Much More Expensive On Ticketmaster?

For years now, Ticketmaster’s detractors have been outspoken about the company’s prohibitive service fees – as well as the other dark arts that the business engages in.

Indeed, these charges can amount to “an astonishing 7,000%” markup on the final ticket price for those sold on the secondary market, causing fans to question how Ticketmaster can justify such exorbitant increases.

However, Ticketmaster defends its strategy as “dynamic pricing,” claiming that prices fluctuate based on supply and demand – much like airline tickets or hotel rooms.

But for many fans who feel locked into using Ticketmaster due to their exclusive relationships with venues and promoters, this explanation feels like little more than a thinly veiled excuse for price-gouging consumers.

Moreover, as artists continue to tour less frequently but demand ever higher prices from ticket buyers, it remains to be seen whether any meaningful reform will emerge – or if customers are simply stuck paying top dollar through whatever means necessary.

Conclusion: Is Ticketmaster a Monopoly?

Despite the presence of some lesser rivals, Ticketmaster’s market share and sway over pricing, distribution, and data are so impressive that it practically quashes all competition.

In fact, the company’s detractors contend that Ticketmaster’s dominance has fostered an unfavorable operating environment, leading to limited options and escalated prices for consumers.

However, while some pundits believe the industry is competitive enough, the evidence suggests that Ticketmaster profits from too much undue influence and cannot, therefore, qualify as an oligopoly.

Instead, given its monopoly status right now, it is crucial for regulators to closely scrutinize Ticketmaster’s conduct and actions to ensure it does not engage in anticompetitive practices that harm consumers and other businesses in the future.

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