The TicketMonster is coming to eat you!!!

April 29, 2008 5:28 PM

With the internet making it much easier to sell things remotely, how is Ticketmaster still able to virtually monopolize event ticket sales?

It seems like breaking into the ticket vending business ought to be made easier by the internet, but still ticketmaster controls most ticket sales in the United States. I know that they often have exclusivity agreements with venues or teams, which is still a huge part of it. But are the bonuses they offer still really worth it? Why is the possibility of other vendors coming in and offering better deals than TM not enticing enough to events and venues? And why don't more venues choose to save money by selling their own tickets online? I guess I can see why. I would require additional staff to handle that operation. So maybe a better question is, are places that do this just throwing money away, or are they onto something that others just aren't following? Getting back to exclusivity. I would think that it'd be hard for a new company to just come into the business and start selling tickets to big arena and stadium events. But what prevents them from starting with smaller venues by just offering better prices than TM? What else is preventing other companies from breaking into the ticket vending biz?

And please, PLEASE, let's not turn this into a Ticketmaster pile-on. Just the facts, ma'am.

posted by gauchodaspampas to media & arts (15 comments total)

Doug Stanhope wrote recently about a ticket service called BrownPaperTickets.com. The run-down is :

- $0.99 per ticket to the customer, 2.5% to the promoter/event-holder
- No add-ons for printed tickets.
- Same ticket price online as it is by phone.

Not sure why I've never heard of them before that, or why there's not more people using them - but they seem like a good little operation. It's just a matter of them making enough money to advertise to the right people.

However, I'm pretty sure Ticketmaster has all kinds of exclusivity agreements in place that would equals millions in lawsuits to owners of venues who chose to cross them, should they ever decide to. Though, that's just a guess.

Any lawyers out there?
posted by revmitcz at 5:33 PM on April 29

But what prevents them from starting with smaller venues by just offering better prices than TM?

Likely nothing. I believe things rest largely in the hands of the venue and whether or not they want to make a deal with the devil.

When I lived in Boulder, CO, there was an independent promoter called Nobody in Particular Presents that handled shows and tickets at several of Denver's smaller venues. I went to a ton of their shows and the prices were always reasonable. I wept blood on the rare occasions I wanted to see something big at one of the TM controlled venues.
posted by Nelsormensch at 5:39 PM on April 29

But what prevents them from starting with smaller venues by just offering better prices than TM?

Nothing. This is how TicketWeb started out. Low fees and good venues before being bought out by....Ticketmaster.
posted by rhizome at 5:45 PM on April 29

To be fair, the problem ticketmaster is solving is quite big. Tickets for a big show goes on sale. Everyone and their brother wants some. At the same time. And you can't sell the same seat twice. And you can't lose someone's purchase. And you're handling actual money. Etc. This is a very hard technical problem that does require expertise, lots of maintainence and likely ongoing changes to make it work better (and deal with bugs and people trying to break the system). Plus a huge infrastructure in the way of hardware (likely redundant at different physical locations) and pretty stiff network reliability. I don't find it surprising not too many companies are breaking into it. That said, it still galls to pay 10-20% of a ticket in various ticketmaster fees. But I know why they are there.

Note: none of these are "facts". All conjecture from my knowledge of how I might go about building such a system (some of the underlying technical requirements are similar to stuff I've worked in).
posted by R343L at 6:10 PM on April 29 [2 favorites]

However, I'm pretty sure Ticketmaster has all kinds of exclusivity agreements in place that would equals millions in lawsuits to owners of venues who chose to cross them, should they ever decide to. Though, that's just a guess.

Sure, but how long do these agreements last? Certainly they tend to expire after a while, right? And even if they don't, new venues that open up don't have to make an exclusivity arrangement with Ticketmaster. The internet has been around for quite a while now - plenty of time for agreements to expire and new venues to open up.
posted by Dec One at 6:15 PM on April 29

To be fair, the problem ticketmaster is solving is quite big. Tickets for a big show goes on sale. Everyone and their brother wants some. At the same time. And you can't sell the same seat twice. And you can't lose someone's purchase.

Ticketmaster's a little more understandable at very-large venues where that is in fact the case. But only twice in my life have I ever gone to a show with assigned seating, or that sold out superfast - in every other case, it's just a general admission, standing-room-only, X hundred tix available and then it's over. Which is a lot easier to deal with, and definitely doesn't require any kind of insane economy of scale.
posted by Tomorrowful at 6:35 PM on April 29

Dec One raises a lot of legitimate issues. A good ticketing store is not a simple web shop front.

That said, beyond that Ticketmaster also does provide a central location where people can look for tickets. Of course today, google is where people start so there is less need for that.

Presumably Ticketmaster actually give reasonable deals to big stadiums and whatnot for the volume. Also they can, definitely handle the volume.

However, the technical difficulty of providing these services has gone down considerably. People know have done this kind of stuff so many times it has become much easier. Just as internet startups that required hundreds of staff in the 90s are now shops of 10 people these things can be more easily done.

Ticketmaster's days may well be numbered, or at least the outrageous mark ups it charges might go. Here in Australia I've spoken to performers who are shifting to other services. These include: moshtix, oztix and purple something or other.

The market for tickets isn't like ebay - where there is a monopoly where network effects make it very difficult to duplicate and so ebay can ream it's customers as it is now doing.
posted by sien at 6:35 PM on April 29

Having worked in Ticketmaster (Aus), quite a while ago, I'd say the main thing is the existing agreements with venues. If you want an event at the 'G, (for example), you WILL go through Ticketmaster. End of story.
posted by pompomtom at 6:40 PM on April 29

And please, PLEASE, let's not turn this into a Ticketmaster pile-on. Just the facts, ma'am.

*Ahem* Rokusan, I'm looking at you. Of course we all hate their convenience charges. But I am genuinely curious as to how they can still get away with their racket. I just don't want this to turn into Ticketmaster sux, amirite? Plenty of people post "questions" that are really just excuses for everyone to bitch about X. I really do want to know what's going on in the ticket vending business, why ticketmaster is painfully (to the consumer) successful, and why there aren't a whole lot of competitors yet. I know there are reasons out there. And most of the answers are good so far. So what are we still missing, folks?
posted by gauchodaspampas at 6:50 PM on April 29

A lot of it is network effect. At this point Ticketmaster is the big name in the field. That's where customers go first to buy, which means that's where event organizers go first to sell, which means Ticketmaster has all the tickets, which means that's where the customers go first to buy.

Network effect doesn't apply in every situation, but when it does it can be a very powerful form of entrenchment, making it extremely difficult for challengers to dislodge the current market leader -- even if the challengers offer a better deal.

Network effect is the main reason why no one is going to be dislodging eBay and Google and Amazon in their respective market niches any time soon. (Not to mention Microsoft.)
posted by Class Goat at 7:01 PM on April 29

I can also imagine that if there are hiccups in the service, the venue is apt to think "Oh well, Ticketmaster is the biggest out there... this is what we have to deal with"

But, if the venue signed up for a smaller more indie service, the moment there is one problem the venue gets angry at the ticket agency and moves to Ticketmaster.
posted by lockle at 7:04 PM on April 29

One obvious aspect of a near-monopoly like this is that, from the venue's point of view:

1. you have to deal with at least n ticket vendors, where n is greater than zero
2. if n is greater than one, however, you increase your paperwork, legal fees, accounting costs, staff training etc.
3. if n is greater than one you'll still have to deal with TicketMaster anyway

So clearly the optimum value for n is 1, and clause 3 means TM gets the contract.

Maybe if you think of them as a provider of services to venues, they're a wonderful company.

It's your mistaken impression that they exist to provide services to you that's got you upset.
posted by AmbroseChapel at 7:57 PM on April 29 [2 favorites]

Corporations like to work with other corporations. While Ticketmaster has gobbled up smaller ticket-sales businesses, Live Nation and it's brethern have gobbled up more and more venues, including smaller ones that previously would have been completely independently booked and managed.
posted by desuetude at 8:28 PM on April 29

Sure, but how long do these agreements last? Certainly they tend to expire after a while, right? And even if they don't, new venues that open up don't have to make an exclusivity arrangement with Ticketmaster.

The venues get cash upfront for exclusivity contracts. We're talking crazy amounts of money for large venues. This gets paid back against fees, so why would the venue want smaller fees?
posted by smackfu at 8:55 PM on April 29

I'll second the motion for them being on top due to contracts. They're the big guns in the industry and thus can pay the most to venues. Seats will get sold all the same and the venue's bottom line will be higher with Ticketmaster versus a smaller player. Period. End of story.

Now, if a bunch of smaller venues banded together to go against TM in the interest of their customers, then that might help but I doubt that would ever happen, especially with the continually shrinking entertainment budgets people have in this crappy economy.
posted by Elminster24 at 7:41 AM on April 30