Cities in Czech Republic benefiting from the monopoly, Ticketmaster
Four main cities benefit from the event ticketing monopoly
An upcoming US tour of Taylor Swift shakes Ticketmaster off with insane admission costs of up to $22,000. Twenty-six Swift fans and three months later, Ticketmaster finds itself in the hot seat of the US Senate. Let's dive deeper into the drama surrounding the ticket business provider and see which cities in Czech Republic stand to benefit from this monopoly.
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The one, the only
Ticketmaster is one of the major players in the ticketing industry. By 2019, for instance, the company had sold 500 million tickets worldwide, including in the Czech Republic. Their business model charges fees on tickets sold on their digital platform. These fees range from "service fees" to "delivery fees" and everything under the sun. While the price range of these fees is minimal, they do sometimes add up as much as 20% to the total price.
As reported by Vox, a Guns N' Roses concert ticket costs $250, but when including fees, the total price calculates to $300.75. An itemized breakdown of fees shows a delivery fee of $19.50, a $4 facility charge, a $4.25 order processing fee, and a $23 service fee.
The story of Ticketmaster, a company that became a leader in selling and distributing tickets for live entertainment, started in 1976 in Phoenix, Arizona. Since then, everything has changed, from the newly appointed CEO to the merger with Live Nation Entertainment LYV 0.00%↑ in 2010. Its headquarters are now located in Beverly Hills, the heart of live entertainment in all of its aspects.
Taylor Swift shook Ticketmaster's ticket prices
November 2022 was the kickoff point for Ticketmaster to go through a sequence of unpleasant events. It started with minor issues, as reported by BBC News: "Some fans are reporting that access codes meant to deter bots didn't work properly and that tickets were being resold at higher prices online while the sale was still going on. The company's website also crashed repeatedly amid extremely high demand."
While gradually increasing prices with an increase in demand is a classic supply-demand game, you must master it to a certain level. In the case of Ticketmaster, what started as being stewards of the artist eventually took a nasty turn to price gouging. BBC News noted that ticket prices skyrocketed after the sale started: "...tickets were being sold on a resale website for prices up to $22,000."
It takes courage to file a lawsuit against such a large corporation as Ticketmaster, and their parent, Live Nation. But, as it turned out, 26 devoted fans, known as Swifties, were courageous and reckless enough to do so. The lawsuit alleges the company is guilty of fraud, price-fixing, and anti-trust violations, said BBC News in its recent report.
On top of that, the case proclaims that Ticketmaster is a "monopoly that is only interested in taking every dollar it can from the captive public." Taylor Swift, among other artists, could not resist but agree with the statement, adding that she has "no choice" but to work with the corporation due to a simple yet prevailing monopolization reason. "No other venue can hold half as many people as stadiums and venues that work with Ticketmaster," the Guardian reported, citing the juicy lawsuit details.
Even though Ticketmaster apologized for the situation in November, the US Senate took it further for an investigation. So what do we know so far?
US Senate and Ticketmaster: The Battle of the Titans
Amy Klobuchar, who chairs the US Senate committee on consumer rights, has had Ticketmaster on her radar for a while. Interestingly, she was one of the first people to bring the issue of the ticket provider to that table: "Ticketmaster is responsible for 70% of ticket sales in the US. In truth, there is no other choice. It is a monopoly."
While this issue was ignored or neglected for an unknown reason, the law case brought it back to life, and it caught Kloubuchar's attention once again. "The high fees, site disruptions, and cancellations that customers experienced show how Ticketmaster's dominant market position means the company does not face any pressure to continually innovate and improve," as stated in BBC News by Mark Savage and Jason Armesto.
During the hearing, Live Nation, on behalf of Ticketmaster, tried to explain the origins of unrealistic pricing on tickets, yet it was all nonsense. The corporation explained the algorithm behind its system and the software bots' attack techniques that led to illegally obtaining tickets. It seems that bots pushed the price, not the corporation: "The attacks came despite the use of Ticketmaster's "verified fan" scheme, which requires customers to pre-register their interest, allowing the company to check whether they are genuine fans intending to see the show." But the question of whether we can believe such an explanation remains unanswered.
In the end, Ticketmaster apologized to Taylor Swift and her fans; however, this was not enough. While the lawsuit can begin examining the competition in the ticketing industry in the United States, it is still being determined if all of this would go any further unless there is sufficient evidence of anti-competitive practices induced by Ticketmaster.
Live Nation and Ticketmaster’s influence in Czech Republic
Ticketmaster is one of many options for consumers when buying tickets for live entertainment in the Czech Republic. There are additional players on the market, such as Ticketportal, Vigogo, Prague Ticket s.r.o., and other representatives of the ticketing industry. Yet, Ticketmaster is slowly becoming the dominant player as it gathers all the events under its roof, like a marketplace, but in the entertainment industry.
As listed on the Live Nation site in Czech Republic, four main cities benefit from the event ticketing monopolization. These cities are Prague, Brno, Pardubice, and Slavkov u Brna.
While there is an oligopoly framework in the live entertainment industry, we should remember the case study of the US, where 70% of tickets are primarily sold via Ticketmaster and not another corporation. This means that Prague, Brno, Pardubice, and Slavkov u Brna may be where live entertainment will thrive in the future.
Watch the US Senate hearing:
Live Nation LYV 0.00%↑ business by the numbers: