Why the Live Nation-Ticketmaster Merger Might Be a Good Thing

tickets by wonderferret via flickr

Secondary ticketing companies, or “ticket brokers”, are currently upside down because talks of a Live Nation-Ticketmaster merger could easily drive their businesses to the ground. Some of these companies include LiveStub, StubHub, and Razor Gator. For those of you unfamiliar with the process of buying event tickets, ticket buyers are usually directed to Ticketmaster in order to purchase a “limited number” of tickets. For major tours, tickets sell out in a few minutes. If the ticket buyers go to secondary ticketing companies moments later, they’re surprised to see a well-stocked inventory of tickets priced at hundreds of dollars more than the original face value.

No Doubt tickets priced at around $90 from Ticketmaster are currently priced at $1,853 on StubHub’s website. Face value Brittany Spears tickets in Miami are $750 each but they go for around $5,000 through secondary ticketing companies. Why exactly should we feel sorry for online ticket brokers if Ticketmaster and Live Nation make them obsolete?

The argument posed by secondary ticketing brokers is that a merger will violate the anti-trust act and prevent competition between other primary ticket sale companies. Ticket brokers are concerned because they’ll have less control of the secondary ticketing market. Scalping has had a new face in the form of online ticket brokers for several years now. Having Ticketmaster and Live Nation merge could fix the problem.

The downside for fans is that Live Nation and Ticketmaster might be ready to spike ticket prices too. Ticketmaster has it’s own ticket auction website called TicketsNow. In February, Bruce Springsteen fans buying through Ticketmaster’s website were redirected to TicketsNow at 10:01 a.m., only about a minute after the tickets went up for sale. Democrat Senator Charles Schumer of New York: “How did they become available at TicketsNow so fast?” Instead of finding the Ticketmaster prices, they found tickets that had been marked above face value. Bruce Springsteen was pretty upset about the issue, and so was Democrat Senator Charles Schumer of New York, who said he wants to find out, “How did they become available at TicketsNow so fast?”

There are some artists that genuinely care about the ticket issues, and the problems fans face when they want to go to a show but can’t afford the cost. Trent Reznor has done a pretty good job of giving his biggest fans first dibs on tickets. His pre-sale is a will-call only affair where fans are required to show identification that matches the credit card used for the purchase. He recommends the same technique be used for all other ticket sales in the future.

The bottom line is Ticketmaster and LiveNation are tired of ticket brokers making money at their expense. Who could blame them for selling a product at a pre-arranged price, then having that product show up on broker websites for up to 10 times the cost? Go ahead, try to buy tickets to a big show at 10 a.m. on the first day of sales from a Ticketmaster booth. Most likely, tickets will already be sold out, but they’ll appear on StubHub, TicketZoom, TicketTango, and every other ticket broker website for hundreds of dollars more than the Ticketmaster price.

Ticketmaster shouldn’t have tried to copy a ticket broker’s business model, but can you blame them for trying? Ticketmaster isn’t making extra money off of ticket brokers, artists aren’t making extra money, Record Labels aren’t making extra money, and fans are paying too much. What’s the real problem?