Why are Concert Tickets so Jacked??
And why is Live Nation / Ticket Master a bad investment?
Why are concert tickets so expensive? Competition between concert promoters was once a stabilizing force on ticket sales. When only one company owns all the large venues, they can dictate prices to everyone except the big acts which they gladly pay for their fielty. This keeps emerging concert promoters from being able to get into the market because new concert promoters can’t afford to pay what Live Nation shells out. Live Nation does not pay act because the act is good per se. They pay in order to secure them as a commodity to keep them out of the hands of other concert promoters. Live Nation’s business model has no long term prospects for gain because the costs for squashing competition steal any revenue for growth or investors. It costs Live Nation profit, the fan sees fewer concerts, and this hurts the artists that are not yet famous because they get less exposure.
How do we get competition back into the live events industry? The Department of Justice needs to file an antitrust lawsuit against them and force the divestiture of 75% of their venues. Does this seem like too much? It’s not. When the monopoly of Bell telephone was broken up they ended up split into 7 companies. By that metric Live nation should be forced to divest of 85.71% of their monopoly power. Live Nation will argue that they are not a complete monopoly because there are still some promoters out there. This is true, but they are a “Functional Monopoly”, meaning they have enough ownership of the market to dictate the terms to everybody else.