Speaker 1:
Frequency Podcast Network, stories that matter, podcasts that resonate.
Jordan:
If you are a big brand, there aren’t many entities worse to have mad at you than fans of Taylor Swift. However, the United States Department of Justice might beat out even the Swifties.
Clip 1:
Now it looks like the things are coming down hard for Ticketmaster’s Parent Company, Live Nation. They are going to court, it seems, with the US Department of Justice, along with nearly 30 states filing an antitrust lawsuit against Live Nation claiming it has an illegal monopoly.
Jordan:
This isn’t the first time that a lawsuit has alleged Live Nation is manipulating the live music industry. Two years ago, it was those Swifties I mentioned, but there’s a whole other class action lawsuit still making its way through the courts. However, the US Department of Justice is a little bit different than aggrieved fans, even millions of aggrieved fans. So is this finally a foe worthy of the gigantic music conglomerate? Exactly. What does the DOJ allege that Live Nation is specifically doing wrong here, and are Live Nation and Ticketmaster the real villains, or are they just the most visible face of an industry that’s undergone a seismic shift?
I am Jordan Heath-Rawlings. This is The Big Story. Joel Khalili is a business reporter for WIRED. Hi Joel.
Joel Khalili:
Hi. Yeah.
Jordan:
Thank you for finding a little time for us.
Joel Khalili:
No, no problem at all. Thanks for having me.
Jordan:
Why don’t you begin by maybe explaining how Ticketmaster slash Live Nation holds so much power over the industry. We all understand that they do, but how does it actually work in practice?
Joel Khalili:
Sure. So perhaps best if I explain what Live Nation does and what Ticketmaster does first. So Live Nation is a music promotion business. Predominantly. It has relationships with a number of high profile artists from Metallica to the Red Hot Chili Peppers and a number of others. And separately, it runs its own music venues. On the other hand, you have a Ticketmaster, which is a ticketing service company. Venues pay to use Ticketmaster software to run ticket sales for shows that they’re putting on. It’s pretty likely that all music fans listening to this have ended up using Ticketmaster software before. So back in 2010, these two companies merged to create something of a music industry powerhouse. The joint organization is the largest ticketing provider out there. Now, the debate though, has to do with whether those companies interact with one another. They use their relationship, their complimentary relationship, in such a way that amounts to an unfair monopoly that’s at the heart of the debate.
Jordan:
Allegedly, let’s just say if they’re actually doing that, what does it look like?
Joel Khalili:
Sure. So there have been allegations made by a number of parties, most recently the DOJ, but it has been alleged previously that Live Nation and Ticketmaster used the complimentary relationship between the promotion business and the ticketing business essentially in order to push venues to force venues into signing exclusive ticketing arrangements. So allegedly what happens is you have Live Nation, which has relationships with all manner of high profile musicians and Live Nation subsidiary Ticketmaster wants to be the only ticketing provider for the various large venues that these high profile artists are likely to play at. So the allegation goes that Live Nation uses the strength of its position in the music promotion business to lean on venues, to enter it into exclusive ticketing agreements. With Ticketmaster, its subsidiary or otherwise risk lose the access to some of the most high profile artists in the us.
Jordan:
And in one of your recent pieces for WIRED, you call this an alleged monopoly. Now, lots of people have thrown around that word about Ticketmaster Live Nation and about other large companies, but in this case, it’s a very specific allegation. What’s the definition that we’re talking about here?
Joel Khalili:
Sure. So the definition of Monopoly is actually fairly straightforward. You might say it’s something like to control over an industry or a type of service. The problem arises because diagnosing a monopoly is far more complicated, right? In competition law in general, there’s plenty of gray area. It is sometimes difficult to make a clear determination as to whether a certain business practice is anti-competitive or it’s just strong business. And that gray area can be the source of a lot of arguments. So although defining a monopoly is fairly simple, diagnosing one, not so much.
Jordan:
Before we talk about the most recent attempt to counteract some of the power of the Ticketmaster and Live Nation have, let’s talk about what’s happened previously. Have there been other attempts to take on this behemoth, and how are those attempts going? Or if they’re done, how did they go?
Joel Khalili:
Sure. So yes, there have been multiple cases brought in the private courts against Ticketmaster, which have made similar allegations relating to ads competitive behaviour. Probably the most high profile of those cases was one filed by a group of Taylor Swift fans back in 2022 that arose after a botched ticket presale for Taylor Swift’s Eras tour. And that was handled by Ticketmaster. Essentially, fans claims have been left waiting for hours for tickets allocated to them under this presale program, but eventually ended up empty handed, and then all the while tickets were already making their way onto the secondary marketplace where they’re being sold at a premium. So that’s the origin of the case, but as to what specifically they’re accusing, Ticketmaster of the lawsuit essentially claims that Ticketmaster abuses its market position to drive up the prices, whether in pre-sale or general sale or on the secondary market, and uses the strength of its market position, essentially to force customers into using its service when perhaps they might prefer an alternative ticketing provider. Now that case is currently on hold pending the outcome of an appeal in a separate case that makes similar allegations, it’s perhaps simpler not to go into the weeds on that front, but suffice to say both cases are still ongoing.
Jordan:
And we’re talking to you now because last week the United States Department of Justice got involved here. What exactly is the DOJ doing?
Joel Khalili:
Sure. So the DOJ last week brought a lawsuit against Live Nation and Ticketmaster, and it accuses the pair of essentially establishing a monopoly in the ticketing business and then using that monopoly to prevent competitors from gaining market share, from gaining a foothold. In essence, the DOJ is claiming that Ticketmaster, by entering into exclusive deals with large venues throughout the US, has put itself in a position where it is the predominant ticketing service in town.
Jordan:
What is the difference if there is any, between the suit from Taylor Swift fans or the class action lawsuit that’s similar to that one and this suit from the DOJ?
Joel Khalili:
All three are a civil lawsuits. The main difference is that, let’s take the Taylor Swift fans lawsuit. That suit is seeking financial damages on behalf of the fans who’ve put their names against the suit on the basis of the allegations that I mentioned previously. The DOJ complained it is also a civil lawsuit, but it’s brought by the government and it’s brought with the goal of affecting change with respect to how the specific business operates and how potentially the broader ticketing market operates,
Jordan:
What would that look like? So if the DOJ wins this suit, what happens? Are they actually trying to break up this conglomerate?
Joel Khalili:
So the DOJ is specifically asking for Live Nation to be broken up. That’s not quite as simple as separating Ticketmaster and Live Nation out again, returning to a pre 2010 merger state. It’s not quite as simple as that could be slightly more granular. It could be a case of separating out specific functions within the business. But yes, the DOJ is asking for a breakup. It may also seek other forms of what’s known as Injunctive Relief. That means preventing the company from behaving in a certain way. But the DOJ is yet to specify what it might ask for on that front.
Jordan:
Beyond claiming generally that they’ve created a monopoly and are controlling the business, what specifically does the suit allege? Is there anything that people should be aware of?
Joel Khalili:
Sure. So yes, there are a number of allegations the DOJ makes in its suits, and they kind of boil down to something that I alluded to earlier. But essentially the claim is that Live Nation and Ticketmaster abuse the synergy in their respective lines of business, Live Nation in the music promotion business and Ticketmaster and ticketing to create what the DJ describes as a flywheel, a kind of self-reinforcing business model that leaves everyone else to fight over the scraps. So the DOJ claims that Live Nation uses its role as exclusive promoter to high profile acts to push venues into the agreements with its subsidiary, Ticketmaster and so, the cycle continues leaving no room for competitors to break in. That’s the allegation.
Jordan:
What does Live Nation say about that?
Joel Khalili:
Sure. So Live Nation responded on the day the DOJ made public its lawsuit with a lengthy blog post. And that post outlined essentially why Live Nation thinks the DOJ is barking up the wrong tree, I suppose would be one way to post it. It says that although it might be a PR win for the DOJ to call Ticketmaster a monopoly, the lawsuit won’t do anything to remedy the actual problems, the underlying problems that are leading to high prices for consumers. That’s the number one points of complaint. Specifically Live Nation says that it takes a very small cut in comparison to other types of digital distribution business. It says that it’s the artists who control ticketing prices and the venues that control the service fees, and it’s not a Ticketmaster that has any control over those aspects. So that’s the company’s position.
Jordan:
What do they say is driving these high prices? They’re just blaming it all on bands and acts setting their own prices too high?
Joel Khalili:
Yes, it’s not quite as straightforward as that. I think Ticketmaster would say that it’s about an imbalance between supply and demand. Let’s take the Taylor Swift example. Taylor Swift had organized to do X number of tours in the US that year. Those tours account for X thousand seats. But the reality was that the number of people desperate to go and see Taylor Swift Live exceeded the number of seats available on that tour. By such an extent that one Taylor Swift is able to charge a certain amount for those tickets, and two tickets will sell on the resale market for extremely high prices. That is what I imagine Ticketmaster would say. To be clear.
Jordan:
While most artists, especially the large ones do end up using Live Nation and Ticketmaster, not all of them, do we know what challenges that brings, what that looks like for an artist that wants to use alternative means.
Joel Khalili:
Yeah, I’m not totally clear on that point to be totally frank. I think the reality is that it would be up to the artist’s promoter rather than the artist themselves. And it’s possible or likely even that the artist has an exclusive promotion deal, whether it be with Live Nation or another provider. So I don’t know the extent to which individual artists have a great deal of say in the matter. To be totally honest, Taylor Swift may be an outlier to the extent that she has great sway and clouts in a way that other artists may not. But I think generally speaking, the artists are probably silent parties in all of this.
Jordan:
I know you probably don’t have the answer to this, so I realize I’m asking you to speculate a little bit here, but I guess I’m just wondering what would actually change things in the music industry? Would breaking up Live Nation actually impact availability of events, access to things like Taylor Swift or are things trending in this direction anyway?
Joel Khalili:
Yeah, you’re right. It’s really tough to say. There’s an extent to which we have a situation here where the various participants in this industry pointing the finger at one another, almost like that Spider-Man meme, if you’ve ever seen it.
As for whether breaking up Live Nation would make a difference, the DOJ seems to think. So the thinking is that it could lead to a scenario where ticketing providers compete solely on the merits of their respective products for contracts with these venues. A scenario where consumers have genuine choice of multiple providers when they go to purchase a ticket or where providers are forced to provide a better service to win those exclusive contracts. Now all of that sounds great, but then there are other potential issues that could arise here as well and will. A multi ticketing provider system open new doors for scalpers, for example, work in the gaps between, will it lead to the same ticket being accidentally sold multiple times by multiple providers? There are other teething pains to consider. So, although on the face of it, one might think that a breakup is a simple solution here, not necessarily the case.
Jordan:
Last question, what’s the timeline here for this suit? I know the Taylor Swift one was filed a couple of years ago, and as you mentioned, still, waiting on results of appeal stuck in the courts. What do we know about this one? And regardless of the timeline, what will you be watching for as this case moves forward?
Joel Khalili:
So I suppose the first thing to watch for would be any motion to dismiss and the grounds on which Ticketmaster and Live Nation bring that motion to dismiss. For those unfamiliar is essentially a legal document that outlines the reason that the defendant in this case, Live Nation or Ticketmaster, believes that the lawsuit has absolutely no merit and shouldn’t be allowed to continue through to trial. The contents of that motion to dismiss, I think will be interesting to see. I’ll be watching closely. As for a timeline, it’s a bit of a how long is a piece of string question to the extent that so much can go on between the filing of a complaint and ultimately something ending up in trial, whether motions to dismiss or other kind of legal wranglings that go on behind the scenes. So yeah, as for when we might see this in court, we’re likely looking at the order of years here, I would imagine.
Jordan:
Joel, thank you so much for this. I guess we’ll see if this one is different.
Joel Khalili:
That we will. Thanks for having me.
Jordan:
Joel Khalili reporting for WIRED. That was The Big Story. For more from us, you can head to TheBigStorypodcast.ca. You can also send us some feedback. That address is hello@TheBigStorypodcast.ca. Or leave us a voicemail by calling 416-935-5935. You can find this podcast in your very favorite podcast player. You can also find it in your least favorite podcast player and go leave us a review there. Thanks for listening. I’m Jordan Heath-Rawlings. We’ll talk tomorrow.
Back to top of page
