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Ticketmaster grilled by senators over Swift onsale

Live Nation’s Joe Berchtold has defended Ticketmaster’s practices in a US Senate antitrust panel spurred by the fallout from the presale for Taylor Swift’s stadium tour.

Swift shifted more than two million tickets – a new record for an artist in a single day – for her AEG-promoted 52-date The Eras Tour, but the sale was marred by reports of “significant service failures” and lengthy delays on Ticketmaster’s website, leading to today’s (24 January) near three-hour bipartisan panel investigating a “lack of competition in ticketing markets”.

In his opening statement, Berchtold, Live Nation’s president and CFO, said the firm had invested more than $1 billion to improve the Ticketmaster system since the companies’ 2010 merger.

“Much of this was on technologies to eliminate fraud and to get tickets to fans instead of ticket scalpers using bots, a prime example of which is our Verified Fan service,” he said.

“We hear people say that ticketing markets are less competitive today than they were at the time of the Live Nation-Ticketmaster merger [but] that’s simply not true… The Ticketmaster of 2010 did not face the level of competition that we face today… Ticketmaster has lost, not gained, market share since the merger.”

“There are problems in the ticketing industry. The recent onsale experience with Taylor Swift… has highlighted the need to address these issues urgently”

Berchtold moved on to address the Swift ticketing controversy from last November. The Eras Tour attracted “historically unprecedented demand” as 3.5m people pre-registered for Swift’s Verified Fan presale, 1.5m of whom were later invited to participate in the onsale. However, the Ticketmaster site struggled to cope with the traffic after being swamped by bot attacks. Seatgeek (which took on $238m in private equity investment in August) experienced similar technical issues ticketing five of the Swift dates.

“There are problems in the ticketing industry, problems we believe can and should be addressed through legislation,” he said. “Many are the direct result of industrial scale ticket scalping that goes on today – a $5bn industry and concerts alone in the United States, fuelled by practices that run counter to the interests of artists and their fans.”

He continued: “The recent onsale experience with Taylor Swift… has highlighted the need to address these issues urgently. We knew bots would attack that onsale and planned accordingly. We were then hit with three times the amount of bot traffic that we’d ever experienced. And for the first time in 400 Verified Fan onsales, they came after our Verified Fan password servers as well.

“While the bots failed to penetrate our systems or acquire any tickets, the attack requires to slow down and even pause our sales. This is what led to a terrible consumer experience, which we deeply regret. We apologise to the fans. We apologise to Miss Swift. We need to do better, and we will do better. Ticketmaster learned valuable lessons from this onsale.

“In hindsight, there are several things we could have done better. And let me be clear that Ticketmaster accepts its responsibility as being the first line of defence against bots in our industry. It’s an ever-escalating arms race. But in this forum where we’re here to discuss public policy, we also need to recognise how industrial scalpers using bots and cyber attacks to unfairly gain tickets has contributed to this awful experience.”

“We should mandate all-in pricing so that fans see the full cost of their tickets from the start”

Berchtold called for “categorical prohibitions” on “fraudulent ticket practices, including deceptive URLs”, along with spec-selling. “We should mandate all-in pricing so that fans see the full cost of their tickets from the start,” he added. “We share your goal of making live entertainment industry better for artist teams and fans alike.”

The panel also heard from witnesses including SeatGeek co-founder Jack Groetzinger, JAM Productions president Jerry Mickelson, singer/songwriter Clyde Lawrence, Sal Nuzzo, SVP of the The James Madison Institute, and Kathleen Bradish, the American Antitrust Institute’s VP for legal advocacy.

Asked directly whether they considered Ticketmaster to be a monopoly, Groetzinger, Mickelson and Nuzzo answered “yes”, and Bradish said the company was “certainly acting like a monopoly”, while Lawrence said, “I’m not sure.”

In response, Berchtold argued the ticketing business “has never been more competitive”. “We believe that fact is demonstrated by every venue renewal [having] multiple credible offers in a bidding process,” he noted.

The session was announced by Senators Amy Klobuchar and Mike Lee of the senate judiciary subcommittee on competition policy, antitrust and consumer rights. Days earlier, Klobuchar had written an open letter to Live Nation chief Michael Rapino, expressing “serious concerns about the state of competition in the ticketing industry”.

“The solutions are there for the taking. Some of them are small things that can be done right away”

The letter came just weeks after a coalition of American consumer, artist and lobbying groups launched a Break Up Ticketmaster campaign, claiming that artists and venues are being exploited by the company. However, several industry commentators were quick to point out that unprecedented demand for Taylor Swift tickets had little to do with Ticketmaster’s relationship with Live Nation.

In her closing comments, Klobuchar suggested the strong turnout reflected people’s desire to see live concerts.

“We are very interested in actually doing something and not just throwing popcorn,” she added. “The solutions are there for the taking. Some of them are small things that can be done right away. Some of them are things that the Justice Department might order as either part of their oversight with the consent decree, or new investigations, or new outcomes – some of which have been discussed here. Some of them are things that we can do right here.

“Of course, we’re always going have some some disagreements… But there is general agreement on some of these ideas when it comes to pricing and transparency and the like.”

 


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