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Taylor Swift's pre-sale controversy is just the latest in a string of disputes surrounding Ticketmaster's monopoly power. As such, legislators have voiced their support for calls to break up the company.
Ticketmaster, which controls over 70% of concert tickets at major venues, enjoys no competition. That means they can charge exorbitant prices and provide subpar service while making millions from each concert.
Ticketmaster dominates more than 70% of ticketing for major concert venues, making them the only option for big artists who require venues while on tour. As such, superstars such as Taylor Swift must partner with the company in order to obtain tickets.
Due to Ticketmaster's dominance over live events, they can charge exorbitant prices for concerts and other performances while hindering smaller venues and artists from booking shows in their hometowns. These predatory pricing practices have been documented by academics for years; a recent Justice Department investigation found evidence that Ticketmaster was abusing its monopoly power to harm artists, fans and small venues alike.
The company's primary source of revenue comes from fees it adds onto tickets' face value, a practice known as "drip pricing." This practice has been condemned by consumer advocacy groups due to studies showing that when fees don't appear until checkout, more fans are inclined to purchase the ticket even with its higher cost.
Last month, when Swift's tour presale went down due to technical difficulties, Ticketmaster's technology couldn't keep up with demand and crashed their website. This chaos sparked complaints from fans who experienced hours-long waits and being stuck in a virtual queue without tickets.
In an effort to regain the trust of its fans, Ticketmaster is now providing education about ticket fees through a blog post about its Verified Fan program and various social media posts.
According to the article, Ticketmaster's Verified Fan program is intended to weed out bots and other speculators who try to purchase cheap tickets for popular acts. Unfortunately, during Swift's pre-sale, however, the website was overwhelmed with bots, causing it to crash and fans to lose their place in line.
Another way Ticketmaster is trying to regain public trust is by decreasing its fees. Currently, they charge between $2 and $5 per ticket - more than what many consumers have become used to paying.
Ticketmaster and Live Nation Entertainment (the company that owns it) have long had a reputation for charging excessive fees. But even with their monopoly over the concert industry, Ticketmaster was forced to face scrutiny after last November's Taylor Swift presale incident.
Fans were in for a real nightmare: Ticketmaster failed to adequately handle an unprecedented volume of website traffic. As a result, Ticketmaster had no choice but to cancel the general sale and lower prices in response.
Unfortunately, Ticketmaster's demise poses a major problem for the concert industry as a whole - not just with respect to Taylor Swift's tour. They are the sole provider of tickets for most major music venues in America, making their absence particularly detrimental.
In 2010, the Justice Department authorized Ticketmaster and Live Nation's merger, giving them de facto control of ticketing. This merger has been widely condemned by academics for years as an unfair deal that harms artists and venues alike.
Due to Ticketmaster's monopoly power, stars like Taylor Swift must collaborate with them in order to gain access to major venues for her tours. As such, Ticketmaster controls every aspect of the ticketing experience - from getting fans inside the venue to selling tickets.
Due to this, Ticketmaster has become the subject of both fan and political outrage. Senators Amy Klobuchar and Mike Lee have both joined calls for an investigation into the company.
Another issue with the Ticketmaster/Live Nation merger is that it eliminated legitimate competition in ticketing. In 2010, Ticketmaster merged with Live Nation, becoming America's biggest concert promoter and second-largest venue owner. This created a de facto Ticketmaster monopoly which adversely impacted smaller venues, artists, and fans.
Ticketmaster's post-Swift strategy aims to rebuild trust with the public by reasserting their commitment as a reliable ticketing company and addressing some of the criticism leveled at them. This includes informing consumers about ticket fees and taking on scalpers.
There can be no doubt that Ticketmaster's botched rollout of Taylor Swift tour tickets was a disaster. Their mishandling of the process caused widespread disappointment among fans, leading to calls for change and improved customer service in future. But they are taking steps to ensure this mistake doesn't repeat itself in the future.
Ticketmaster is currently investing in technology to reduce ticket fees. They're specifically trying to prevent concertgoers from reselling their tickets at higher prices and finding ways for ticket buyers to get fair prices when purchasing tickets.
One way they're considering accomplishing this is through facial recognition technology. They recently signed a partnership with Blink, who have developed an algorithm that uses machine learning to detect and track concertgoers' faces.
Though it may appear to be a convenient solution to prevent concertgoers from scalping or reselling their tickets, the system could come with serious drawbacks as well. First and foremost, building a database of people's faces would necessitate creating extra security measures if venues had to install surveillance equipment at every location.
Ticketmaster is exploring "all-in pricing," which would enable ticket fees to be displayed upfront instead of being added onto the price after it sells. This could give customers a more accurate representation of their tickets' true cost; however, this can only work if all ticketing marketplaces implement it.
Transparency is key for ticketing companies to demonstrate that they value their consumers, which in turn helps build trust. But it's something Ticketmaster cannot do alone; therefore, they must collaborate with venues and artists in order to have the proper tools in place so they don't end up reselling tickets at more than their original face value.
Ticketmaster and Live Nation face some competition in the form of secondary sellers who post tickets on sites like Vivid Seats. Although these sites provide some similar features to Ticketmaster, they aren't as dominant in the market or have as much control over the ticketing process as Ticketmaster has over it.
Tickets fees are a major source of frustration for concert goers. They often amount to over 30% of the overall cost, making even inexpensive one-time tickets cost hundreds or thousands more than their original value. But if companies can reduce these fees to as little as 2%, it could make tickets more accessible for consumers.
The Swift presale brought to light an issue that has been festering for years: Ticketmaster's dynamic pricing system, which adjusts prices in real time, has made it easy for fans to pay more than they bargained for. This has been blamed for making concerts costlier than they should be--especially those featuring Bruce Springsteen and Blink-182.
Live Nation has taken action to repair its relationship with fans, according to former Ticketmaster CEO Fred Rosen. That is because they understand that price isn't the only issue at stake.
But, more importantly, it's about fairness. The way the ticketing giant operates as a monopoly is something many want to see ended, which is why Congress and regulators have been closely watching them.
This week's Taylor Swift pre-sale debacle served as a prime example of what can happen when companies fail to take customer feedback seriously. It sparked public outcry, an image issue, and could potentially lead to antitrust investigations from the Justice Department.
Crisis communications experts and branding and marketing specialists agree that there are lessons to be learned from last week's disaster that Ticketmaster can use moving forward. These tips include crafting a concise message that accepts responsibility for the incident and outlines their plans to rectify things or ensure it never happens again.
Another thing Ticketmaster must do is listen to their audience and identify which fans are most dissatisfied. They can use a social audience insights platform to identify these users and understand what they need from the company most.
Utilizing this data to make changes is the first step to restoring trust in their brand and product. While it can be a challenging process, doing so will ultimately leave the business better off in the end.