Ticketmaster

Ticketmaster Entertainment, Inc.
Subsidiary
Industry Live Entertainment
Founded 1976 (1976)
Arizona, U.S.
Founders Albert Leffler
Peter Gadwa
Jerry Nelson
Headquarters Beverly Hills, California, United States
Area served
 Worldwide
Key people
 Michael Rapino (CEO)
Jared Smith (President of Ticketmaster North America)
Mark Yovich (President of Ticketmaster International)
Kip Levin (Executive VP of Product)
Products Ticketing technology
Ticket sales
Ticket resales
Marketing
Distribution of event tickets and information
Support of venue renovation
Revenue Sold 142 million+ tickets valued at $8 billion in 2007
Number of employees
 6,678
Parent Live Nation Entertainment
(2010–present)
Website www.ticketmaster.com

Ticketmaster Entertainment, Inc. is an American ticket sales and distribution company based in Beverly Hills, California, with operations in many countries around the world. In 2010 it merged with Live Nation to become Live Nation Entertainment. As a primary ticket outlet, most US ticket sales for US venues are fulfilled at Ticketmaster's two main fulfillment centers located in Charleston, West Virginia, and Pharr, Texas. Typically, Ticketmaster's clients (promoters) control their events, and Ticketmaster acts as an agent, selling the tickets that the clients make available to them.

On 10 January 2008, Ticketmaster completed the acquisition of Paciolan Inc., a developer of ticketing system applications and hosted ticketing systems, after litigation over the potential breach of antitrust laws.[1][2] In January 2008, Ticketmaster acquired UK-based secondary ticket marketplace, Getmein.com.[3] Getmein is a secondary ticket market where people can buy or sell tickets for live events.

On 10 February 2009, Ticketmaster and Live Nation, the largest concert promoter, officially announced their merger deal.[4] After almost a year of review, the two companies merged on 25 January 2010, under the name Live Nation Entertainment (NYSE: LYV).[5] To satisfy one of the United States Department of Justice's conditions of approval for the merger,[6] Ticketmaster sold Paciolan to Comcast Spectacor in March 2010.[7]

Service fees

Much of the price for a ticket advertised by Ticketmaster is earmarked for its own service fees.[8] Some consumers find these markups excessive, because there are many instances where no alternative purchase method is offered that would allow avoidance of the fees. This business practice, along with a dearth of competitors, has led many to view Ticketmaster as monopolistic.[9][10][11] Alternative ticketing companies have emerged, but, due to Ticketmaster's exclusive agreements with a large percentage of venues, the company does not need to lower service fees. In some instances customers may be able to buy tickets directly from the venue, which may add its own service charges.[8]

Typical fees added to a ticket's face value include:

  • Service Charge – This is Ticketmaster's charge for the general service they provide and maintain. The amount paid may depend upon the method of payment (by phone, online, or in person).
  • Building Facility Charge – This is determined by the venue, and not Ticketmaster.
  • Processing Charge – This is Ticketmaster's charge for processing an order and making the tickets available.
  • Shipping Charge, E-Ticket Convenience Charge, Will Call Charge – Ticketmaster charges a fee for ticket delivery, whether the tickets are mailed to the customer, printed out at home, or collected from the venue. The charge for printing out the ticket at home is often higher than the fee to have the ticket mailed. In other sectors, such as airline ticketing, companies usually do not charge (and in some cases even offer a discount), for electronic ticketing. Economist Emily Oster of the Chicago Booth School of Business suggests that this reflects the lack of competition in the industry, with customers willing to pay more for the convenience of obtaining the tickets immediately due to a lack of alternate options.[11]

In some instances service charges amount to up to 50% of a ticket's face value.[12]

Ticketmaster has been criticized by some who claim its fees are excessive, with forty British MPs signing an early day motion criticizing the company for overcharging and for the lack of transparency in its pricing structure.[13]

In 2003, a class action lawsuit was filed against Ticketmaster in Los Angeles District Court alleging that Ticketmaster misrepresented the exact nature of the shipping and processing fees included in certain ticket sales. That dispute then spilled over into a related lawsuit filed in 2010 against Ticketmaster’s liability insurance carrier Illinois Union Insurance Company, a subsidiary of ACE Limited (NYSE: ACE).[14]

Ticketmaster has been the subject of complaints of high ticket service charges.[15] Notably, in the 1990s, Pearl Jam's complaints about Ticketmaster led the U.S. Department of Justice to open an antitrust investigation into the company's practices. The investigation was ultimately dropped because, according to former U.S. Attorney General Janet Reno, other competitors were entering the ticket industry, and there was a lack of evidence to proceed.[16][17]

Ticket sales market

In 2008, an anonymous source alleged that TicketsNow, an acquired subsidiary of Ticketmaster, assisted with the sale of more than $1 million worth of Radiohead tickets on the TicketsNow website. Due to heavy marketing by the band, Ticketmaster quickly sold out of tickets, but then began referring customers to a "partner site", without disclosing it as a subsidiary, where many tickets were resold at much higher prices.[18]

Ticketmaster is the primary ticket seller for 27 of the 30 NHL teams and 28 of 30 NBA teams, but in 2005, Major League Baseball acquired Ticketmaster rival Tickets.com. MLB sells approximately 75,000,000 baseball tickets per year, and might be expected to transfer those sales to Tickets.com when Ticketmaster contracts ended.

Ticketmaster has historically had limited success in the secondary ticketing market. In September 2003, Ticketmaster announced plans to sell tickets in internet auctions, which would bring the price of tickets closer to market prices, but its market share compared to that of eBay or Stubhub remains small, and Internet auctions are still a relatively minor part of its business. Indeed, since around the time of the 2003 announcement, Ticketmaster has lost the lead in the secondary ticketing market to new entrants like Stubhub, who have developed a popular and effective person-to-person market for tickets.

In 2006, Ticketmaster President Sean Moriarty, interviewed on NPR, pleaded for legislation that would make the selling of tickets from person to person illegal except through Ticketmaster's own product for this purpose.[19] Ticketmaster established the Ticketmaster Ticketexchange to compete with Stubhub, their main tagline being that tickets are 100% guaranteed to be authentic, since they are sold through the season ticket holder's account. Some NFL teams, such as the New England Patriots, New York Giants and New York Jets, require people to be on the waiting list in order to use the service.

The resale site also charged up to $1,199 for a $44 face-value ticket to a recent Killers concert in Toronto — roughly a 2,500% markup.[20]

In an article by the CBC, Ticketmaster has been quoted as saying, "You and I both know there is a thriving ticket-broker industry ... so the law is really a fiction ... We very strongly feel the law needs to be modernized to reflect the reality of internet commerce. By keeping a price cap in place, you're really just driving the [resale] business into the shadows."[21]

In late summer 2009, Ticketmaster developed a new way to resell tickets hoping to circumvent brokers and scalpers.[22] This new system relies on a "paperless" ticketing platform, which makes customers prove their purchase by showing a credit card and ID.[22]

Controversies

Issues and hearings regarding anti-competitive practices

In 1994-1995 LA Times reporter Chuck Philips broke a series of stories [8] that helped trigger a federal anti-trust investigation.[23] In 1994 Ticketmaster's tickets often had surcharges as large as 25% of the base ticket price. Moreover, an unwanted and unnecessary “tying” of services (such as parking and “conveniences”) to the cost of the concert placed an unfair burden on customers and constituted an anti-competitive practice according to a legal analysis [24] of investigative pieces by Philips.[25][26][27][28][29][24][30]

The grunge band Pearl Jam petitioned the Antitrust Division of the United States Department of Justice, complaining that Ticketmaster adopted monopolistic practices and refused to lower service fees for the band's tickets [23] Pearl Jam wanted to keep ticket prices under $20.00, with service charges no greater than $1.80. Fred Rosen of Ticketmaster refused and because Ticketmaster had exclusive contracts with many of the large venues in the United States they threatened to take legal action if those contracts were broken. Pearl Jam was forced to create from scratch its own outdoor stadiums in rural areas to perform. Pearl Jam’s efforts to organize a tour without the ticket giant collapsed which Pearl Jam said was further evidence of Ticketmaster’s monopoly. An analysis of Philips' investigative series [26][27][28][29][30][31] in well known legal monograph [24] concluded that it was hard to imagine a legitimate reason for their exclusive contracts with venues and contracts which covered such a lengthy period of time. The authors said, “The pervasiveness of Ticketmaster's exclusive agreements, coupled with their excessive duration and the manner in which they are procured, supported a finding that Ticketmaster had engaged in anticompetitive conduct under section 2 of the Sherman Act.” Members of Pearl Jam testified on Capitol Hill on June 30 of 1994. Pearl Jam alleged that Ticketmaster used anti-competitive and monopolistic practices to gouge fans. Congressman Dingell (D-Mich.) after Pearl Jam’s testimony before congress wrote a bill requiring full disclosure to prevent Ticketmaster from burying escalating service fees. Pearl Jam’s manager said he was gratified that Congress saw the problem as a national issue.[32]

Later in the year the Justice Department opened an investigation into anti-competitive practices in the ticket industry. It continued for close to a year until July 6 of 1995 when the Justice Department abruptly closed its antitrust probe in a two-sentence press release.[10] Chuck Philips was told by sources close to the case that the investigation was closed due to a combination of shortage of resources and the case being difficult and having uncertain prospects.[10] A spokesman for Pearl Jam told the LA Times Chuck Philips, “Unfortunately, those who will be most hurt by the Justice Department’s cave-in are the consumers of live entertainment…The consumers are the ones who ultimately pay for the lack of choice in the marketplace.”

2018 Department of Justice Investigation into Antitrust Violations

In 2018, the United States Department of Justice launched an investigation following complaints that Live Nation had engaged in anti-competitive practices following their merger with Ticketmaster. AEG has alleged that Live Nation had pressured them into using Ticketmaster as a vender. If AEG had refused, they would have lost out on business. The allegations of antitrust violations have resulted in a re-examination of the merger between Ticketmaster and Live Nation. Much of the initial criticisms of the merger has been re-affirmed. [33] [34]

Prominent lawsuits

On April 28, 1997, Ticketmaster sued Microsoft over its Sidewalk service for allegedly deep linking into Ticketmaster's site. The suit was settled after a two-year legal battle in which Ticketmaster claimed that linking to specific pages on an Internet site without permission was an unfair practice.

In 2003, the jam band The String Cheese Incident and its associated booking group, SCI Ticketing, sued Ticketmaster arguing that Ticketmaster's exclusive use contracts at most US venues was a breach of the Sherman Anti-Trust Act. This lawsuit was settled in 2004 with no publicity of the settlement terms.[35]

In 2009, Ticketmaster faced several lawsuits across North America, claiming they conspired to divert tickets to popular events to its ticket brokering website TicketsNow, in which the same tickets were sold at premium prices.[36] This also raised the ire of musician Bruce Springsteen, who said he was 'furious' at Ticketmaster,[37] and "...the one thing that would make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system, thereby returning us to a near monopoly situation in music ticketing".[38][39]

In 2003, a class action lawsuit was filed in Schlesinger v. Ticketmaster. The claim was that Ticketmaster did not fully disclose the UPS and Order Processing Fees. Ticketmaster settled the case in 2013, with the court granting final approval of the settlement in February 2015. Settlement consisted of a $2.25 voucher on the future purchase of tickets, for each transaction from 1999-2013, up to a maximum of 17 vouchers.[40][41][42][43]

Ticketmaster Data Breach

On June 27, 2018 it was reported that up to 40,000 British customers may have had their credit card data stolen in a security breach of Ticketmaster systems.[44][45][46][47][48][49][50]

Ticketmaster eventually confirmed hacking of their systems affected UK transactions between February 2018 and 23 June 2018, and 'International Customers' who purchased/attempted to purchase tickets between September 2017 and 23 June 2018.[51]

Key staff

  • Jared Smith: President[52]
  • Terry Barnes: Chairman

See also

References

  1. ↑ Yahoo! Business Form 10-Q for Ticketmaster Archived December 19, 2014, at the Wayback Machine.
  2. ↑ Ticketnews Ticketmaster Acquisition of Paciolan to Face Federal Review. 03 July 2007.
  3. ↑ White, Dominic (29 January 2008). "Ticketmaster moves into UK concert resales". Telegraph.co.uk.
  4. ↑ Live Nation and Ticketmaster Agree to Merge New York Times. 10 February 2009.
  5. ↑ Pelofsky, Jeremy; Adegoke, Yinka (25 January 2010). "Live Nation, Ticketmaster merge; agree to U.S. terms". Reuters.
  6. ↑ "Justice Department Requires Ticketmaster Entertainment Inc. to Make Significant Changes to Its Merger with Live Nation Inc" (Press release). United States Department of Justice. January 25, 2010. Retrieved April 2, 2017.
  7. ↑ Branch, Alfred (March 10, 2010). "Comcast-Spectacor acquires Ticketmaster's Paciolan ticketing division". TicketNews. Retrieved April 2, 2017.
  8. 1 2 3 Budnick; Baron, Dean; Josh (June 1, 2011). Ticket Masters: The Rise of the Concert Industry and How the Public Got Scalped. Toronto; Ontario; Canada: ECW Press. p. 116.123.126.143,353,354,355,356. ISBN 978-1-55022-949-3.
  9. 1 2 3 Philips, Chuck (July 6, 1995). "Pearl Jam "U.S. Drops Ticketmaster Antitrust Probe : Entertainment: Abrupt closure of investigation lifts cloud of uncertainty over firm, catches others in industry off guard". Retrieved September 27, 2012.
  10. 1 2 Conaway, Laura (2009-09-02). "The Economics Of Ticketmaster : Planet Money". NPR. Retrieved 2013-10-10.
  11. ↑ Raghavan, Sudarsan; Miller&, Greg (21 August 2012). "In the News". The Washington Post.
  12. ↑ "The Stage / News / MPs unite to challenge Ticketmaster's additional fees and charges". Thestage.co.uk. Retrieved 2013-10-10.
  13. ↑ "Ticketmaster LLC Locks Horns with ACE Group Company Over Errors and Omissions Coverage". Ace Insurance Litigation Watch. 13 January 2011.
  14. ↑ CNN Money Archived December 11, 2008, at the Wayback Machine.
  15. ↑ Published: August 23, 1995 (1995-08-23). "Oddities Continue With Ticketmaster And Pearl Jam". Nytimes.com. Retrieved 2013-10-10.
  16. ↑ "Lack of Evidence Cited in Ticketmaster Case". Articles.latimes.com. 1995-07-07. Retrieved 2013-10-10.
  17. ↑ "Ticketmaster scalps Radiohead tickets". Ateaseweb.com. Retrieved 2013-10-10.
  18. ↑ NPR National Public Radio
  19. ↑ CBC News CBC News. 02 January 2009.
  20. ↑ CBC News Archived March 7, 2009, at the Wayback Machine.
  21. 1 2 "Ticketmaster tries to cut out scalpers again – Business – Retail – NBCNews.com". MSNBC. 2009-09-17. Retrieved 2013-10-10.
  22. 1 2 Philips, Chuck (June 8, 1994). "Pearl Jam vs. Ticketmaster: Choosing Sides : Legal file: The pop music world is divided over the Seattle band's allegations, which led to a Justice Department investigation into possible anti-competitive practices in the ticket distribution industry". LA Times. Retrieved 22 July 2012.
  23. ↑ Philips, Chuck (May 17, 1991). "Ticket Flap: What Price Convenience?: Entertainment: A host of service fees, surcharges and taxes is riling concert-goers--and lawmakers". LA Times. Retrieved 22 July 2012.
  24. 1 2 Philips, chuck (February 7, 1995). "Congress May Get Tickets Measure : Pop music: Spurred by Pearl Jam's crusade, the bill would require ticket vendors to disclose fees". LA Times. Retrieved 22 July 2012.
  25. 1 2 Philips, Chuck (June 30, 1994). "Pearl Jam, Ticketmaster and Now Congress: America's biggest band sent shock waves through the music business when it filed a complaint with the Justice Department about Ticketmaster. Now, Congress is holding a hearing. How'd it all get so far?". LA Times. Retrieved 22 July 2012.
  26. 1 2 Philips, Chuck (June 8, 1994). "Pearl Jam vs. Ticketmaster: Choosing Sides : Legal file: The pop music world is divided over the Seattle band's allegations, which led to a Justice Department investigation into possible anti-competitive practices in the ticket distribution industry". LA Times. Retrieved 22 July 2012.
  27. 1 2 Philips, Chuck (June 17, 1995). "COLUMN ONE : The Ticket King's Path to Power : As Pearl Jam just learned, Ticketmaster's Fred Rosen gets what he wants. His tactics have earned him some foes, but even critics admit he has transformed the industry. Now he's eyeing new realms". LA Times. Retrieved 22 July 2012.
  28. 1 2 Philips, Chuck (9 June 1992). "A Tangle Over Tickets : Ticketmaster, Target of Lawsuits, Says It Offers Broad Service". Los Angeles Times. Retrieved 2 November 2014.
  29. ↑ Philips, Chuck (May 17, 1991). "Ticket Flap: What Price Convenience? : Entertainment: A host of service fees, surcharges and taxes is riling concert-goers--and lawmakers". LA Times. Retrieved 22 July 2012.
  30. ↑ Philips, Chuck (August 12, 1994). "Company Town: Bill Would Require Ticket Fee Disclosures : Legislation: Rep. Dingell takes aim at concerns over prices customers pay to get into concerts and sporting events". Los Angeles Times. Retrieved September 27, 2012.
  31. ↑ Live Nation Rules Music Ticketing, Some Say With Threats
  32. ↑ https://news.avclub.com/doj-is-investigating-live-nation-for-possible-antitrust-1824255557
  33. ↑ "News". Rolling Stone. Retrieved 2013-10-10.
  34. ↑ "SUTTS, STROSBERG LLP BARRISTERS & SOLICITORS | Class Action Lawsuit Commenced in Alberta Against Ticketmaster Entertainment, Inc., Ticketmaster Canada Ltd., TNOW Entertainment". Newswire.ca. Retrieved 2013-10-10.
  35. ↑ Knapton, Sarah (2009-02-05). "Bruce Springsteen 'furious' at Ticketmaster". The Daily Telegraph. London. Retrieved 2010-03-28.
  36. ↑ "Bruce Springsteen "Furious" At Ticketmaster, Rails Against Live Nation Merger". Rolling Stone. February 4, 2009. Retrieved 2009-10-19.
  37. ↑ "Live Nation to Pay $22.3 Million to Settle Class Action Suit Against Ticketmaster". Billboard. 27 January 2011.
  38. ↑ "Curt Schlesinger et al. v. Ticketmaster". www.ticketfeelitigation.com. Retrieved 23 June 2017.
  39. ↑ "Fans steaming over Ticketmaster 'free voucher' settlement". Retrieved 23 June 2017.
  40. ↑ http://www.buffalonews.com/columns/discount-diva/ticketmaster-voucher-settlement-was-a-debacle-x2013-and-it-will-get-worse-20160626
  41. ↑ "Ticketmaster Class Action Settlement Results In Free Concert Ticket Vouchers". 19 June 2016. Retrieved 23 June 2017.
  42. ↑ "Ticketmaster data breach: Thousands of customers may be affected". Which?. 27 June 2018. Retrieved 24 July 2018.
  43. ↑ "Ticketmaster admits personal data stolen in hack attack". BBC News. 27 June 2018. Retrieved 24 July 2018.
  44. ↑ "Ticketmaster admits user data was stolen in breach". Sky News. 28 June 2018. Retrieved 24 July 2018.
  45. ↑ "The Ticketmaster breach – what happened and what to do". naked security by SOPHOS. 28 June 2018. Retrieved 24 July 2018.
  46. ↑ "The Ticketmaster hack is a perfect storm of bad IT and bad comms". Wired. 28 June 2018. Retrieved 24 July 2018.
  47. ↑ "Ticketmaster warns Australian customers of possible data breach". Computerworld. 28 June 2018. Retrieved 24 July 2018.
  48. ↑ "Chat bot opens door to Ticketmaster payment card hack". CSO Online. 28 June 2018. Retrieved 24 July 2018.
  49. ↑ "Who has been affected by the recent data security incident and what may have been compromised?". Ticketmaster. June 2018. Retrieved 24 July 2018.
  50. ↑ Michael Morain (2011-09-06). "Walmart is new Ticketmaster vendor | Des Moines Register Staff Blogs". Blogs.desmoinesregister.com. Retrieved 2013-10-10.
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