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Ticketmaster / Live Nation - Government Barriers of Entry?

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freewheeler Posted: Mon, Apr 13 2009 2:49 PM

I am reposting this since I did not get a response. I am hoping it was because I used a less read forum. If not, my apologies...

I have been having an ongoing debate with a coworker regarding the tendency for monopolistic scenarios to be grounded in regulation and/or lobbying, and other government interventions. He believes monopolies are naturally occurring and the consolidation of economic power must be mitigated through force. He cited Ticketmaster and Live Nation with their control through seemingly legitimate contracts between the record companies, promoters, venues and ticket agencies. While I understand large market control by a single player is not in conflict with libertarianism should they earn it through voluntary exchange, I am suspicious that this is the case given the terrible product they provide along with their high prices. I also know they are owned by massive corporations, which in this mixed economy, usually requires participating in the lobbying process. Does anyone have any information on this? Any thoughts? 

Many thanks.  

Keep you doped with religion and sex and TV. And you think you're so clever and class less and free. But you're still f***ing peasants as far as I can see.

There's room at the top they are telling you still. But first you must learn how to smile as you kill, if you want to be like the folks on the hill.

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Thonik replied on Tue, Apr 14 2009 9:11 AM

I don't tend to go to concerts or sports events so my only knowledge of this is your post and wikipedia, but since no one else wants to bite...

First off, these companies make contracts with suppliers of events to promote and distribute access to an event. That event is "private" event. They can exclude or advertise however they see fit. 

That said. Normally, tickets sold straight from the source are so cheap that there are heavy shortages. So while they may be charging ridiculous fees compared to the original, are they actually not selling a sufficient amount of tickets to fill up the event? As far as their relationship with record companies goes, it's probably an issue with the way intellectual property - which is a blatant government sanctioned monopoly - works in the music industry. If bands actually had to perform to make money and record labels weren't important - or even existant - then you would probably find many alternatives. 

 

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Ok here's the problem. The artists don't want to charge what the tickets are worth for emotional reasons of their own. This creates a natural opportunity for arbitrage. Unfortunately the profits are so monumental this also allows them great market influence.

If I sell 100 muffins a day for 25c that are worth $1 I AM going to have people camping on my doorstep to buy them and then resell them for $1.

The answer of course would be for me to sell them for a $1 but the artists don't want to charge what their tickets are worth. If they did ticketmaster would evaporate.

What they can try to do is cut out the middle man by finesse (ticketless entry) but regardless it will just be a race for the few available tickets. And this would be a classic example of price controls causing a shortage. In this (rare) case it's a self imposed price control. Even with ticketless entry someone will sell a service to snipe ticket sales. There's no reason I can't either manually or automatedly take a list of customers who want tickets and try to get them tickets the instant they go on sale and sell this service. That will happen and then everyone will have to use that service to have a reasonable chance to get a ticket. Whatever they do arbitrage will happen if it's at all possible, and if it isn't it's still not going to be fun for consumers.

What they should do is price their tickets accordingly, and then invest the proceeds, which should then in turn be used to lend to new enterprise which would use the resources the more efficiently.

At least until that business got a bailout;p

Barring that even buying useless toys like yacths and jets would employ people.

Honestly? If it were me I'd sell tickets in an online auction. In a 10,000 person venue the top 10,000 bidders would get tickets.

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