The Live Nation Monopoly: Controlling the Music Industry and Changing the Concert Scene

Revealing the Power Play in#nbsp;the Live Entertainment Industry

The live event sector is#nbsp;a#nbsp;multibillion-dollar market that keeps expanding every year. Live performances are a#nbsp;substantial source of#nbsp;income for this sector, particularly for performers who tour for the great bulk of#nbsp;their earnings. By#nbsp;2022, touring would account for almost 95% of#nbsp;an#nbsp;artist’s revenue, up#nbsp;from 82% in#nbsp;2010.

The biggest entertainment organization in#nbsp;the world, Live Nation Entertainment, controls nearly every aspect of#nbsp;live events, particularly live music. This covers venue operations, artist management, ticketing (through Ticketmaster#nbsp;— the largest ticket sales service), and event promotion. With the ability to#nbsp;use one business line to#nbsp;maintain dominance and impede competitors in#nbsp;another, Live Nation’s comprehensive market strength offers it#nbsp;a#nbsp;substantial competitive edge in#nbsp;the sector. According to a report by#nbsp;Live Nation Entertainment, operating profit in#nbsp;2023 increased by#nbsp;35% to $#nbsp;1.1 billion since the beginning of#nbsp;the year.

Monopoly with the permission of#nbsp;the state.

How did it#nbsp;happen that a#nbsp;real monopoly appeared in#nbsp;the American market? It’s a#nbsp;pretty interesting story. Up#nbsp;to a#nbsp;certain point, Ticketmaster and Live Nation have successfully developed separately from each other. But in#nbsp;2008, Ticketmaster acquired Front Line Management, a#nbsp;leading artist management and representation firm, gaining exclusive rights to#nbsp;sell concert tickets to#nbsp;Front Line talent. This led to#nbsp;fierce competition between Ticketmaster and Live Nation, the largest event organizer in#nbsp;the United States in#nbsp;the 2000s, which also planned to#nbsp;launch its own ticket sales system.

However, the competition did not last long. In#nbsp;2009, the companies… announced a#nbsp;merger. In#nbsp;2010, the U.S. Department of#nbsp;Justice (DOJ) approved vertical integration between companies under certain conditions. Despite the restrictions that prohibited Live Nation from using methods aimed at#nbsp;suppressing competition, this was a#nbsp;very strange decision on#nbsp;the part of#nbsp;the government because Ticketmaster already occupied an#nbsp;incredible 80% of#nbsp;the ticket sales market at#nbsp;that time. The merger of#nbsp;Ticketmaster and Live Nation (renamed Live Nation Entertainment) essentially allowed them to#nbsp;capture the market.

This was confirmed in#nbsp;2020 when a#nbsp;DOJ investigation revealed that Live Nation Entertainment had repeatedly violated the 2010 agreement. In#nbsp;particular, evidence was provided that Live Nation obliged venues where concerts were held to#nbsp;sell tickets exclusively through Ticketmaster and even threatened establishments that used competing ticket sales sites. But even after that, all the Ministry of#nbsp;Justice did was update the agreement and extend the validity of#nbsp;the decree on#nbsp;the merger until 2025.

Swifties vs#nbsp;Ticketmaster

When a#nbsp;company is#nbsp;so#nbsp;big and powerful, it#nbsp;doesn’t have to#nbsp;try to#nbsp;be#nbsp;good to#nbsp;customers. Only in#nbsp;the end, it#nbsp;will play against her.

It#nbsp;has only been 2 years since the merger agreement was updated when Live Nation Entertainment, or#nbsp;rather Ticketmaster, reappeared in#nbsp;the not-so-flattering headlines in#nbsp;the press throughout the United States and beyond.

Taylor Swift fans, distraught from being quarantined due to#nbsp;the pandemic, rushed to#nbsp;buy tickets for her tour in#nbsp;November 2022. However, the Ticketmaster platform was unprepared for such an#nbsp;influx of#nbsp;fans. More than 14 million users searched for a#nbsp;ticket for the long-awaited tour (No#nbsp;wonder Taylor Swift became Time’s Person of#nbsp;the Year in#nbsp;2023). But something went wrong. The site couldn’t stand the load, and thousands couldn’t buy tickets. It#nbsp;is#nbsp;clear that the problem here is#nbsp;not that the site is#nbsp;broken. This would happen to#nbsp;any website. The problem is#nbsp;that Ticketmaster was the only ticket source. If#nbsp;fans could buy tickets elsewhere, perhaps an#nbsp;avalanche of#nbsp;anger would not have descended on#nbsp;Ticketmaster and Live Nation. In#nbsp;December 2022, a#nbsp;group of#nbsp;Taylor Swift fans filed a#nbsp;lawsuit accusing Ticketmaster and Live Nation of#nbsp;fraud, violating antitrust laws and collusion.

Live Nation’s monopoly power became the subject of#nbsp;an#nbsp;antitrust probe launched by#nbsp;the DOJ. Again. Additionally, in#nbsp;order to#nbsp;ascertain whether the major companies in#nbsp;the market were engaging in#nbsp;unfair competition practices, the Senate Judiciary Committee convened a#nbsp;hearing with industry participants in#nbsp;January 2023, which included the president of#nbsp;Live Nation. Even though the hearing sparked a#nbsp;crucial discussion, it#nbsp;was by#nbsp;design unable to#nbsp;delve into specifics on#nbsp;a#nbsp;market takeover. Senators inquired for some of#nbsp;these data in#nbsp;their inquiries for the record, but Live Nation only provided oblique responses.

There are 2 obvious conclusions from this whole story.

First of#nbsp;all, the live performance market is#nbsp;a#nbsp;gold mine. Ticket prices for live events have increased by#nbsp;more than 400% over the past 20 years, outpacing inflation by#nbsp;334%. At#nbsp;the same time, Live Nation controls about 70% of#nbsp;the ticket sales market for the most visited live performances worldwide. In a report for investors for the 3rd quarter of#nbsp;2023, Live Nation Entertainment reports: "Today we#nbsp;delivered our strongest quarter ever and are on#nbsp;pace for a#nbsp;record 2023, driven in#nbsp;good part by#nbsp;the acceleration of#nbsp;structural growth in#nbsp;the live entertainment industry. While we#nbsp;have benefitted from tailwinds for many years, it#nbsp;has accelerated due to#nbsp;the globalization of#nbsp;our business along with a#nbsp;fundamental shift in#nbsp;consumer spending habits toward experiences. With the majority of#nbsp;opportunity still untapped from Milan to#nbsp;Bogotá to#nbsp;Tokyo and beyond, we#nbsp;expect the industry will continue growing in#nbsp;2024 and for years to#nbsp;come." -Michael Rapino, President and CEO, Live Nation Entertainment

Secondly, the market is#nbsp;on#nbsp;the verge of#nbsp;changes. No#nbsp;matter how convenient it#nbsp;would be#nbsp;for Live Nation to#nbsp;merge with Ticketmaster, the merger agreement will end in#nbsp;2025, and who knows what will happen to#nbsp;the market next. The performance market can be#nbsp;a#nbsp;great way to#nbsp;invest. We#nbsp;have created Jam. Art, a#nbsp;platform that will help investors diversify their capital by#nbsp;investing in#nbsp;musicians' performances. Support musicians by#nbsp;purchasing certificates for performances of#nbsp;your favorite artists. Sell them as#nbsp;soon as#nbsp;they rise in#nbsp;value. And our cutting-edge#nbsp;AI will help you keep track of#nbsp;the price. The future of#nbsp;the concert performance market comes with Jam. Art