Larry Miller is Professor and Director of Music Business at NYU Steinhardt. He is the Music Business Association’s Educator of the Year and producer and host of the Musonomics podcast. Variety welcomes responsible comments – if interested please contact music@variety.com.
When the Obama administration approved the merger of Live Nation and Ticketmaster in 2010, regulators expected a more consolidated yet efficient market resulting from the combination of the most successful concert promoter and the largest ticketing platform.
That vision has largely become reality. There is now more competition in primary ticketing than before the merger – Ticketmaster has actually lost market share – and that’s before considering the creation of a huge secondary ticket market that will reshape the competitive landscape.
That’s why the Justice Department’s announcement in May that it served Live Nation under the Sherman Act is so surprising. The lawsuit alleges anticompetitive conduct that harms artists and fans, and proposes to undo the previously approved merger.
But breaking up Live Nation Entertainment will do absolutely nothing to lower ticket prices for fans. I say this as a music teacher, analyst and passionate consumer of live music. I do not recommend Live Nation, and I receive nothing of value for expressing my opinions in forums such as this guest column.
Fans love to hate Ticketmaster, but their anger is misplaced. Artists and their teams set ticket prices and venues set fees – not Ticketmaster. To its credit, the company quietly absorbed fans’ ire for decades while implementing artist and venue pricing strategies at scale and speed. It receives an estimated 5 – 7% of the ticket price for its services.
If U.S. lawmakers and regulators are truly interested in making ticket prices more affordable, they should regulate the secondary market. Recently estimated at $22 billion worldwide, the secondary market drives primary market pricing. Artists often underprice tickets because they want to play in front of real fans, but the huge resale market has disrupted basic supply and demand. Fans racing to get tickets to a favorite artist’s tour now have to compete with millions of secondary market bots that suck up ticket inventory for the hottest shows and resell them at multiples of face value. Tickets for Taylor Swift’s ‘Eras’ tour have reportedly sold for as much as 70 times face value. And unlike Live Nation and competitors like AEG (which produces and promotes Swift’s tours), ticket sellers pay nothing to the artist, venue or promoter.
Australia recently limited ticket resale to 10% above face value, and the British government is considering a similar plan. But here in the US, a dozen states – including New York – recently passed laws banning similar caps.
The DOJ claims that the breakup of Live Nation will open the market for artists wanting to tour. How exactly would that work? More than half of all artist income comes from touring. There were more than 10,000 touring artists in North America in 2022, up 25% from 2016, and not just iconic acts like the Rolling Stones or Bruce Springsteen. The number of young artists on Live Nation-promoted tours who scored their first hit and sold more than a quarter of a million tickets in the past decade has doubled between 2013 and 2023.
The challenge for emerging artists is not access to the market. Their challenge is to gain, retain and monetize fan attention. It is in the artist’s best interest to play larger and larger venues and provide the best fan experiences as soon as the demand for their live shows from a paying audience can justify it. I explored how the democratization of music production and distribution held the promise of reaching large numbers of enthusiastic fans at the touch of an upload button. Yet the near-infinite music selection available on most streaming platforms has made it harder than ever for new artists to break through, especially on the world stage. Economists call this ‘the tyranny of choice’.
The post-pandemic wave of fans eager to enjoy live entertainment has exposed serious cracks in the live music industry. I have seen Live Nation be both an aggressive competitor and a major investor in improving the artist and fan experience. Independent promoters have long complained about the company’s “flywheel” business model, through which it collects revenue and fees from fans and sponsors and uses its scale and access to capital to tie venues to long-term, exclusive deals. Live Nation has executed its model well – too well, some say. But the symptoms causing fan frustration have little to do with any one company. By focusing on antitrust litigation, Washington could miss an opportunity to ensure a healthy live entertainment ecosystem.
Getting this right is critical – for the artists who rely on touring to make a living, for the fans who increasingly value in-person entertainment, and for the millions of Americans whose jobs and communities depend on the economic boost of vibrant live entertainment. ecosystem. But it won’t be solved by a single lawsuit or by focusing on one player in the industry.
To fix the live concert business, we need to be honest about the realities of supply and demand, help artists secure a greater percentage of their touring income, and regulate the secondary market. Policymakers should focus on correctly diagnosing the problem rather than deciding on a cure before understanding the symptoms.
