Long overdue: the potential breakup of Live Nation
In 2010, the US government approved the purchase of ticketing company Ticketmaster by the venue and promotions company Live Nation. Since that time, artists worldwide have been concerned about the potential for anti-competitive conduct that’s emerged from allowing a promotions company to also control the ticketing for the same venues it owns, or has exclusive agreements with. At long last, the US Department of Justice is taking steps to address this alleged anticompetitive behavior.
How (alleged) monopolists in events hurt artists
In my opinion, even if you’re an arena-level artist in the top .01% of your field, you don’t have any real choices when it comes to dealing with Live Nation’s often exorbitant promotional fees. The DOJ agrees.
Their legal complaint alleges that since Live Nation owns most of the venues an artist might perform at, and also has exclusive arrangements with many promoters an artist might work with, if you want to set up a large arena tour your choice is often, practically speaking: use Live Nation and accept their terms, or don’t do your tour at all.
How (alleged) monopolists in events hurt music fans
If you’ve bought tickets to large concert events anytime in the last twenty years as a music consumer, you’re probably also familiar with the results of Live Nation’s alleged anti-competitive behavior, in the form of their (alleged) grossly inflated ticketing fees. These ticketing fees sometimes take place after checkout, and in total all of the various processing and administrative fees can sometimes be equal or greater than the face value of the ticket being sold!
The DOJ steps in
It’s great to see the US Department of Justice taking steps to attempt to roll back this merger.
More competition, and a more diverse set of players in the live events space has the potential to start getting some money flowing to the right places in the music industry: into the hands of artists, rather than into the hands of middle-men.
You can read the details of Live Nation’s alleged anti-competitive behavior inside sections C-D of the official complaint from the Southern District of New York, which includes allegations of anti-competitive exclusivity arrangements with venues, restricting access to venues unless Live Nation is also paid as a promoter, and strategic acquisitions to eliminate potential rivals.
The complaint also puts together a very helpful graphic showing all of the various middlemen that are placed in-between artists and fans when purchasing a ticket for a major live concert event. Any middleman that is owned or has exclusive partnerships with Live Nation is noted in red:
Notice, that big red wall that comes between the artists, and the fans that want to support them.
As always, our advice here on this channel is to pay artists as directly as you can, as often as you can, if you want them to continue making music for you.
While this can sometimes be difficult for something like a big arena show, at the smaller independent level it can be as simple as making sure to buy your merch directly from the artist by using their own payment system, or by paying in cash.
Live Nation’s response
At time of writing, the conduct outlined in this complaint are unproven allegations that Live Nation has denied.
In a statement to Ars Technica, Live Nation noted that "The defining feature of a monopolist is monopoly profits derived from monopoly pricing," while claiming that the company’s low profit margins should prevent it from being labeled a monopoly.
However, this statement differs significantly from the Federal Trade Commission’s definition of a monopolist, which reads (in part):
…“a "monopolist" is a firm with significant and durable market power.”
and
“Obtaining a monopoly by superior products, innovation, or business acumen is legal; however, the same result achieved by exclusionary or predatory acts may raise antitrust concerns.
Exclusionary or predatory acts may include such things as exclusive supply or purchase agreements; tying; predatory pricing; or refusal to deal.”
While this case will need to be decided by the courts, the FTC’s documentation implies that the simple existence of monopolistic behavior is the more appropriate criteria by which to define a monopolist, not the amount of profits that may or may not be being generated from monopolistic behavior, as Live Nation has claimed.
In short, even if you generate no profits at all from a business, that business can still be labeled a monopoly if it engages in monopolistic practices.
