The Justice Department’s antitrust lawsuit against Live Nation/Ticketmaster isn’t really about high ticket prices, or ticket scalpers, or any individual offense. It is about a systematic vertical integration of the entire live music business, which has led to the company’s dominance over tickets, yes, but also over live music venues, artists’ tour booking, and concert promotion. This dominance has led to the downstream effects everyone hates, like higher ticket prices, difficult-to-obtain tickets, a symbiosis with ticket brokers, etc.
The key thing you need to know about this 124-page lawsuit, and about Live Nation as an entity, is what this vertical integration means for anyone touching the live music industry and anyone who wants to see a concert anywhere in the U.S. The Justice Department’s lawsuit, filed last week, paints a vivid picture of this vertically-integrated monopoly and explains all of the harms it has led to.
In simple terms, Live Nation, which owns Ticketmaster, is not just selling fans tickets on Ticketmaster.com. It owns, operates, or has exclusive contracts with the vast majority of midsized and large concert venues, and a supermajority of all outdoor pavilions and amphitheaters. And it has a concert promotion and artist agent arm, meaning major bands and artists are signed to Live Nation promoters. For all but the smallest bands playing tiny indie venues, it is nearly impossible to book and perform a tour in the United States without touching Live Nation or Ticketmaster at some point. And this omnipresence over the whole industry means that Live Nation has a huge amount of control and power over how much bands are paid, how much tickets cost, and which venues they play at.
Bands, companies, and venues that want to go around Live Nation are often locked out of the things they need: Independent bands often can’t get booked at Live Nation venues; Independent venues often can’t book Live Nation artists; venues that don’t want to use Ticketmaster have various obstacles put in their way until they invariably use Ticketmaster. This means that there is a strong incentive for everyone involved to simply acquiesce and use Live Nation promoters, Live Nation venues, and Ticketmaster for tickets. It also means there is not really that much competition, and so artists and venues have a limited ability to negotiate for better pay and rates, the lawsuit alleges.
“One monopolist serves as the gatekeeper for the delivery of nearly all live music in America today: Live Nation, including its wholly owned subsidiary Ticketmaster,” the first line of the lawsuit states. “Live Nation has its tentacles in virtually every aspect of the live entertainment industry. As a result, Live Nation’s conduct has harmed artists, venues, and fans through the loss of competition in several relevant antitrust markets related to ticketing and promotions.”
I have been covering the ticketing and live music industry for 15 years, and very little has changed in that time. In 2011, I wrote an investigation into what happens when Live Nation opens a new venue in an area. At the time, I was living in Washington, D.C., whose dominant music venue is the 9:30 Club, which is owned by an independent music promoter called IMP Productions. There are also two outdoor pavilions in the area: The Merriweather Post Pavilion in Columbia, Md., which is owned by IMP, and Jiffy Lube Live, which is in Northern Virginia and is owned and operated by Live Nation. At the time, Live Nation was opening a new, 9:30 Club-sized venue just outside D.C. called The Fillmore. Artists who were signed to Live Nation tour promoters would invariably play at Jiffy Lube Live, not Merriweather Post Pavilion. Artists who were signed to Live Nation would play at the Fillmore, not the 9:30 Club.
For years, Merriweather and 9:30 Club seemed to want nothing to do with Ticketmaster or Live Nation. The venues used two very small alternative ticketing platforms, Tickets.com and TicketFly, to sell tickets. Live Nation artists skipped Merriweather. During this period, IMP was in the middle of a years-long lawsuit with Live Nation that accused it of anticompetitive behavior. The lawsuit was ultimately thrown out in 2016 by the Fourth Circuit.
“Before Live Nation required artists to appear only at Live Nation venues on tours and used its monopoly power in numerous regional markets for providing venues and venue services to coerce artists to appear at other venues it owns, operates, or at which it has exclusive booking rights, Merriweather successfully competed against [Jiffy Lube Live],” IMP’s lawsuit alleged. “Major artists having a long standing relationship with IMP and previously appearing at Merriweather, including Maroon 5, Nine Inch Nails, Counting Crows, Peal Jam, and Depeche Mode, ceased appearing at Merriweather and discontinued their relationship with IMP after signing a tour deal with Live Nation because Live Nation forced them to utilize its promotional service and appear exclusively at [Jiffy Lube Live].”
Both Merriweather and 9:30 Club use Ticketmaster now.
DC was actually a very interesting place to study this, because it was one of the few cities where there actually was any competition. Most cities have just a few viable major concert nightclubs and one major outdoor pavilion, which are very often owned, operated by, or signed to Live Nation and Ticketmaster. Getting regularly booked in these cities meant bands had to sign to a promoter who played well with Live Nation, which often meant that they had a strong incentive to play at venues controlled by Live Nation. And the venues that weren’t owned by Live Nation had strong incentives to sign ticketing deals with Ticketmaster in order to gain access to those artists.
Explaining this corporate structure and business “flywheel,” and its harms, makes up the bulk of the DOJ’s lawsuit against Live Nation.
“Live Nation directly manages more than 400 musical artists and, in total, controls around 60% of concert promotions at major concert venues across the country. Live Nation also owns or controls more than 265 concert venues in North America, including more than 60 of the top 100 amphitheaters in the United States. For comparison, its closest rival owns no more than a handful of top amphitheaters,” the lawsuit states. “And, of course, through Ticketmaster, Live Nation controls roughly 80% or more of major concert venues’ primary ticketing for concerts and a growing share of ticket resales in the secondary market,” the lawsuit states. “Because of the interrelated nature of contracts in the industry, money often flows in multiple directions to and from various intermediaries, sometimes in both directions for a single show.”
“Live Nation wields its power in concert promotions to fuel and drive its primary ticketing business. This presents a Hobson’s choice for major concert venues that Live Nation does not already own or otherwise control: either choose Ticketmaster as their exclusive provider of primary ticketing services and benefit from access to Live Nation concerts, or choose a rival ticketing company and risk losing access to Live Nation concerts. Losing access to even a portion of Live Nation’s tours can seriously harm venues that rely on highly profitable concerts,” it continues.
“Live Nation does not have to threaten individual venues explicitly (although it does) to discourage them from signing ticketing contracts with competitors. The risks are well- known in the industry, and Live Nation’s topmost executives remain outspoken that Live Nation likely will steer concerts away from independent venues that do not select Ticketmaster as their ticketer … Live Nation puts a ‘choice’ to venues: use Ticketmaster and potentially receive a significant payment for long-term exclusivity or use another ticketer and risk losing access to the vast array of Live Nation assets, including lucrative concerts.”
The DOJ lawsuit describes a series of situations where Live Nation was allegedly able to intimidate, threaten, or otherwise convince music venues to switch back to Ticketmaster after they had tried to use alternatives. It explains a relationship with a “competitor” called Oak View Group, which was nominally a competitor but was made up of former Ticketmaster executives, which ultimately allegedly worked in concert with Live Nation to push artists and venues to use Live Nation promoters and Ticketmaster for tickets.
At one point in the lawsuit, the DOJ boils the harms from all of this power as the following: “Fans have paid more in fees that are not transparent, not negotiable, and cannot be comparison-shopped because there are no other options; Fans have been denied access to the benefits a competitive process would deliver, such as more choices in concerts and innovative fan-friendly ticketing options; Artists have had fewer opportunities to play concerts, and fewer real choices for promoting their concerts, selling tickets to their own shows, and performing at certain venues; and Venues have fewer real choices for obtaining concerts and ticketing services, and many are reluctant to disrupt the status quo due to the financial risk.”
