Mar
10
Beware of Mergers: TicketMaster and Live Nation
Congress wake up! Competition is supposed to be good while monopoly ruins everything. Right? The music industry is being crushed by the consolidation of everything. The entire recording industry is run by four massive record labels: EMI, Sony, Universal and Warner (all the products of merger after merger). Terrestrial radio (i.e. AM/FM) is dominated by Clear Channel Communications which owns over 1200 stations across the United States; chances are if you’re getting your tunes through the radio, you are listening to Clear Channel. Then, sadly, came the day of the satellite radio merger between XM and Sirius. They argued to Congress and the FCC that this would bring more options to consumers, they argued that it wouldn’t be a monopoly because satellite’s competition is terrestrial radio, they lied! There may be more channels, but certain niche market stations were eliminated (ex. Beyond Jazz).
The reason I bring this up is that TicketMaster and Live Nation are trying to merge. This would be the combination of the largest ticketing company with the largest concert promoter (and owns over 100 large venues across the US). Meanwhile, Live Nation has been trying to compete with TicketMaster in selling tickets for its venues and the shows that it promotes. Congress and the Justice Department are hard at working listening to corporate executives explain why monopoly is great and that deregulation is the key to markets (if we haven’t already learned enough from the current financial crisis).
Since I brought-up Clear Channel earlier, it should also be pointed out that Live Nation was formerly called Clear Channel Entertainment until 2005 when the SEC broke it up. So this is not the first time that Live Nation has been involved with antitrust legislation. Allowing this merger to happen would just bring about the same conditions for Live Nation as existed in 2005.
To me it is clear that when mergers happen someone makes a lot of money at the expense of workers and consumers. In this case, tickets will become more expensive and fewer acts (musicians are the workers) will be booked at shows. There is another sector that is at risk, smaller secondary ticketing companies. This is also the problem with TicketMaster’s TicketsNow website where TicketMaster has been buying its own tickets immediately and selling them for more on their secondary site. TicketMaster has done this on numerous occasions with Phish, Bruce Springsteen, and Leonard Cohen, to name a few. If TicketMaster and Live Nation are permitted to merge, expect for these incidents of price fixing and price gouging to exponentially increase .
However, maybe in the long run this could help. If the merger forces music fans to pay too much for limited options, they may find themselves visiting smaller venues to catch local/regional independent artists. There’s only one way to see what happens and I’d rather not test the waters with this merger.