After spending nearly a year in deliberation, the Department of Justice (DOJ) has finally approved the merger between Live Nation and Ticketmaster. Live Nation, the largest concert promoter in the U.S. and the second largest ticket seller (behind Ticketmaster), books tours and owns venues across the country; Ticketmaster controls 70-80% of all ticket sales and also has an artist management division, Front Line Management, that counts Kings of Leon, the Eagles, Journey, and Miley Cyrus as clients. The two companies will now operate under the name Live Nation Entertainment.
Though Live Nation Entertainment now has a hand in almost every aspect of the music industry, the DOJ has imposed several conditions that would “preserve competition” in the marketplace. A few of these stipulations include:
- Live Nation Entertainment will not be allowed to sell their ticketing and concert-promotion services as a bundle – these two divisions are required remain separate
- Divisions within the new company will not be allowed to share certain types of data, thereby reducing their competitive edge
- Live Nation Entertainment cannot retaliate against venues that use competing ticketing services by preventing its artists from playing at these venues
In the past, Ticketmaster has been accused of anti-competive practices, including ‘paperless’ ticketing, which was first implemented during Miley Cyrus’ Fall 2009 tour. This system requires ticket purchasers to redeem their tickets at the concert with the credit card used to make the purchase. This prevents secondary ticketing outlets, such as Stub Hub and Razor Gator, from selling tickets to these shows.
Christine Varney, head of the DOJ antitrust division, anticipates lower ticket prices as a result of the merger. Heads from both companies have also expressed that their combined power will allow them to set ticket prices that more accurately reflect their market value, meaning the desirability of the seats or popularity of the musical act. Given that ticket prices (predominantly controlled by Live Nation and Ticketmaster) increased by 82% between 1996 and 2003, it is difficult to believe that the deal will benefit concertgoers.
At the very least, the DOJ’s involvement means more regulation on ticket prices moving forward. Seth Hurwitz, chairman of I.M.P., which owns the 9:30 Club, operates Merriweather Post Pavilion, and produces the Virgin Mobile Festival, says, “[the merger] puts Live Nation Entertainment under a microscope, a place we wished Ticketmaster and Live Nation were under a long time ago.”
David Balto, former policy director of the Federal Trade Commission (FTC), hopes that the DOJ and FTC will keep consumers in mind when imposing rules and regulations on the newly formed company. “It will be incumbent upon enforcement authorities to listen to the voices of millions of consumers who attend live events to ensure that they, not the merged company, are the ultimately beneficiaries of this agreement.” Still, it would be impractical to assume that Live Nation Entertainment will protect the interests of the consumer over those of the company.
With the continued decline of music sales, live music remains one of the most lucrative aspects of the business. For consumers, the obvious bottom line is the cost of attending concerts. In order for this deal to have a positive outcome for concertgoers, Live Nation Entertainment will have to decrease their ticket prices and/or service fees, which have risen to an astronomical $10 per ticket. Changes (if any) will not be immediate; only time will tell how this merger will affect the music industry as a whole.
