Economists overwhelmingly agree that the lack of competition in the market for ticket-selling intermediaries leads to attendees paying more, according to a recent survey from the Initiative on Global Markets.
Concerns about the market power of ticket-selling intermediaries were amplified in recent months after hopeful concert attendees faced significant obstacles to purchase tickets for Taylor Swift’s latest tour.
Swift’s fans experienced long waits online and website crashes when trying to buy from Ticketmaster, leaving many without tickets and resale prices reaching exorbitant levels. Politicians have since criticized Ticketmaster’s hold on the entertainment event industry, and state attorneys general have begun investigations into what happened.
This is not the first time Ticketmaster has faced scrutiny for monopoly behavior. In the 1990s, the band Pearl Jam fought with Ticketmaster over high prices and service fees. Live Nation Entertainment merged with Ticketmaster in 2010, becoming its parent company and prompting more criticism of market power abuse. Prior to the Swift concert ticket debacle, the Justice Department began an antitrust investigation into Live Nation Entertainment.
“What is most clear is that the intermediaries capture a large chunk of surplus; at a cost to at least one side of the market but it is harder to say whether this comes primarily at the cost of consumers or producers,” said Larry Samuelson of Yale.
Kenneth Judd of Stanford was uncertain about the market power of ticket-selling intermediaries themselves, saying “What is keeping out entry? Merely selling tickets is something many websites do. The market power may lie with Live Nation Entertainment, its parent company, which provides many services related to concert promotion.”