Ask HN: Why hasn't Ticketmaster been killed yet?
7 comments
Concert ticketing is a huge mess. I looked at creating a startup in that space before my current startup.
Ticketmaster/LiveNation control 70% of the market (in the US and UK; to a lesser extent elsewhere), this is though a mixture of owning or having exclusive contracts with big venues and having exclusive contracts with artists.
Venues make almost nothing from the tickets, for a big artists the artist will take a huge cut of the ticket price (often in the 70-85% region). Venues make all of their money from selling in venue products (food, drink) and a cut from product sales (tshirts, etc.) So it's in the venues interest to get as many people in as possible, venues would love to do dynamic pricing like airlines do.
But they can't, they're restricted by the contracts with the artists. Those contracts are very tightly written so venues cant do auctions to make more money or sell excess tickets at discount. It's also a reason places like ticketmaster have weird pricing, they can't just change the price of the ticket to be inclusive of all their fees.
Ticketmaster/Livenation for some time have wanted to run a discounted ticket site but it means renegotiating tens (if not hundreds) of thousands of artist and venue contracts, it's a non-trivial task. The whole thing is a huge mess.
Most startups in this area have tended to concentrate on the secondary market where you have less of these problems, but even there you need a lot of money to break into the market. It's very advertising driven (ticket sites are one of the biggest users of affiliate sales) and there's a huge amount of credit card fraud in the space so you often need to post a huge bond to even get a merchant account.
Ticketmaster/LiveNation control 70% of the market (in the US and UK; to a lesser extent elsewhere), this is though a mixture of owning or having exclusive contracts with big venues and having exclusive contracts with artists.
Venues make almost nothing from the tickets, for a big artists the artist will take a huge cut of the ticket price (often in the 70-85% region). Venues make all of their money from selling in venue products (food, drink) and a cut from product sales (tshirts, etc.) So it's in the venues interest to get as many people in as possible, venues would love to do dynamic pricing like airlines do.
But they can't, they're restricted by the contracts with the artists. Those contracts are very tightly written so venues cant do auctions to make more money or sell excess tickets at discount. It's also a reason places like ticketmaster have weird pricing, they can't just change the price of the ticket to be inclusive of all their fees.
Ticketmaster/Livenation for some time have wanted to run a discounted ticket site but it means renegotiating tens (if not hundreds) of thousands of artist and venue contracts, it's a non-trivial task. The whole thing is a huge mess.
Most startups in this area have tended to concentrate on the secondary market where you have less of these problems, but even there you need a lot of money to break into the market. It's very advertising driven (ticket sites are one of the biggest users of affiliate sales) and there's a huge amount of credit card fraud in the space so you often need to post a huge bond to even get a merchant account.
There's a pretty good article here[1] that explains a lot about how Ticketmaster got where they are, and how hard it is to compete against them.
[1]: http://www.wired.com/magazine/2010/11/mf_ticketmaster/
[1]: http://www.wired.com/magazine/2010/11/mf_ticketmaster/
“A large-scale concert on sale is, in essence, a denial-of-service attack.” And unfortunately, on July 24, service was denied.
Fascinating. It seems like quite a few of the would-be-competitors, even given the chance to compete, end up failing on the technical side of things (can't deal with thousands of concurrent requests).
Fascinating. It seems like quite a few of the would-be-competitors, even given the chance to compete, end up failing on the technical side of things (can't deal with thousands of concurrent requests).
Sounds like Google App Engine would be the way to go, now that they've got their high-availability option. I've read several stories about startups on GAE handling sudden huge traffic spikes without drama.
A portion of that convenience fee you pay gets handed back to the decision maker who chose to go with Ticketmaster. New players who don't screw their customers can't compete because they don't have that extra money to offer as a bribe.
I have a startup idea that I think that has a viable chance to compete. I've been mulling it over for a couple years now and it's startup idea #3 on my list of future projects.
It's a monopoly, and they have exclusivity deals with venues.
I'm curious why that's never caused legal trouble for them. They have a dominant position in the ticket-sale business, and companies with market dominance like that usually aren't allowed to try to extend or defend it with exclusivity agreements. Microsoft and Intel both got in trouble for exclusivity agreements with OEMs, for example.
There have been congressional hearings regarding Ticketmaster's monopoly. Not sure why nothing came out of them.
EventBrite is the most credible attempt at eating them from the bottom up. They're doing very well and they're much less evil.
you got lucky to still be able to get it via ticket master.
Here in l.a., few weeks before the show you can only buy via third parties sites that charge way more for the "convenience"
Here in l.a., few weeks before the show you can only buy via third parties sites that charge way more for the "convenience"
So the minimum I'm gonna pay for a "$20" ticket is $34.
Do they still have an overall monopoly, or is it just market fragmentation?