What Ticketmaster Doesn't Want You To Know: Concerts Were Cheap For Decades

when you're a a true mom and pop Indie small venue you're like one person and you're doing like six jobs you guys here with the water department you guys need drink tickets you want me to do it here's a list for a backup I could be up on the roof later working on the air conditioning for alls we know let's do our little security meeting then how you doing you all right are you sweating how the heck did that happen if you haven't grabbed the plunger then you're not an indie venue owner this is Tom he owns a small rock Club in Tampa Florida that fits about 400 people venue owners like Tom are the secret artist responsible for orchestrating all of your favorite concert moments very soon about 400 people will make their way in here for this concert we're almost there and Tom is getting squeezed we used to operate about 25 30% margins in 2019 and now it's literally like 3% margins and the same people that are squeezing Tom are the ones gouging you for concert tickets priced at thousands of dollars so if you can't afford to see your favorite artists and the people putting on the shows aren't making any profits who is making money a giant corporate Monopoly of course the two-headed Beast of Live Nation and Ticket Master we're going to dig into just how they not only ruin the concert goinging experience but set the template for making everything in the American economy from food to airline travel and Health Care shittier and more expensive for all of us I can go through a day day where a hundred people say to me we love you we got to figure out how to keep you here and how can you not be making money every time I turn around you're having a soldout concert I'm like listen here's the thing the big dogs are literally just going to swallow me there's a hierarchy in live music both in the sizes of the venues and the popularity of the artists at the base are the small independent venues like Tom's that's where traditionally most artists cut their teeth then in the middle tier you have venues like the pabs theater and Milwaukee Wisconsin owned by Gary wit and at the very top you have the big dogs Tom mentioned the Arenas mostly owned by giant corporations like Live Nation and the artists that can fill them your Drakes Taylor Swifts and Beyonce today only that top tier that charges you thousands of dollars for tickets is able to sustain itself but it didn't used to be this way at one point this top tier didn't even exist the venues used to be a lot smaller even for the biggest artists in the world and the tickets were cheaper too it's 1956 teenagers in Miami are lining up outside the Olympus theater all day to see Elvis Presley the king of rock and roll it's the hottest ticket in town and it costs $150 and before you say well that's just inflation we did the math and in today's economy that would be like seeing the biggest pop star in the world for under $20 that's because back in the 50s and 60s musicians kind of expected to lose money on live shows because the tour was just marketing for their album that's where the real money was shows were short usually less than 30 minutes and they were small often too small tens of thousands of people came out that weekend in Miami to see the king of rock and roll but the theater only fit about 2,000 so he ended up playing Seven shows over the course of 3 days The Beatles figured out a way around that in 1965 the boys from Liverpool changed live music forever with a record-breaking show at New York's sha Stadium 55,000 fans at a single Show screaming so loud The Beatles couldn't hear themselves play the show gross 300,000 or about $3 million today and the band pocketed most of that Stadium Rock was officially born and in the years to come it would only become more successful all thanks to basketball in the 60s the NBA and NHL were massively expanding their league sizes which led to a new crop of huge indoor stadiums most notably Madison Square Garden in New York and the Forum in La they could fit up to 20 ,000 people rain or shine had better Acoustics than the bigger outdoor stadiums and were in need of more events to fill the nights when there were no games up to that point a big artist might make up to 100K after playing a week's worth of shows at a midsize theater but with these stadium and Arena shows they could make that much in just one night without raising the ticket price case in point the most expensive ticket for that iconic Beetle show was 575 or $56 today and it stayed like this for decades we looked up more ticket stuff subbs from the biggest acts of the' 70s and 80s and when we adjusted the prices for inflation we were surprised to find that every single show we looked up between 1970 and 1989 cost almost exactly the same around $45 a price that would have also gotten you into the Beatles iconic sha Stadium show back in ' 65 but in the 1990s everything in live music changed because of three groups Ticket Master Live Nation and Pearl Jam first there's Ticket Master today concert ticketing is mostly digital but before the 90s tickets used to be sold through call centers at stores or at box offices me and my loser friends you know we got to go get Aerosmith tickets top priority of the summer there were a number of different ticketing agencies and they made their money by charging venues of fee for handling all the technology and Logistics of selling tickets but Ticket Master inverted that instead of charging venues they started making money by charging fans the infamous service fee this incentivized venues to sign exclusive contracts with Ticket Master over other companies Ticket Master also gobbled up the competition acquiring seven other ticketing agencies between 1985 and 1991 including their main rival Ticketron tickets are selling fast byy yours at Navy Pier Carson Perry Scott and Ticketron so to sum up that era of stable concert ticket prices we talked about ended at the same time The Ticket Master became the only ticketing service in town because with the rivals out of the way there was nothing to stop Ticket Master from Raising service fees which they did but an unlikely hero put them in the targets of government Regulators people have been screaming about The Ticket Master Monopoly since the early '90s when Pearl Jam was testifying before Congress at the same time The Ticket Master was consolidating his corporate power in the 9s there was a parallel story of anti-corporate rock bands like Nirvana and Pearl Jam emerging from Roots in local Underground Music scenes playing tiny 400 person Rock clubs like Tom's and then blowing up to massive Fame as part of the alternative rock boom what exactly is your real name is it Beck were you christened Beck all right and once these artists got huge they started questioning Ticket Masters exploitation of their loyal fan bases what do you think of artists who charge anywhere between $50 to $75 for tickets there who charges that much money who does that how much we charge yeah but that's like a burlesque show Pearl Jam was one of the most outspoken acts of the genre and were even called upon at one point by the White House and just as Elvis used his time with the president to talk about the most pressing issue on his mind kicking the Beatles out of America Pearl Jam used their time with Clinton to raise Ticket Masters exploitation of their fans in 1994 they filed a complaint with the justice department against Ticket Master after Ticket Master refused to cap their service fee on Pearl Jam's upcoming tour the complaint alleged Ticket Masters Monopoly a legal battle ensued and the whole incident resulted in guitarist Stone Gossard and basis Jeff AMT testifying in front of Congress all the members of Pearl Jam remember what it's like to be young and not have a lot of money many Pearl Jam fans are teenagers who do not have the money to pay $30 or more that it's often charged for tickets today they were treated like a joke do you think Ticket Masters entitled to a profit I think uh our main concern is are we entitled to use a different company other than Ticket Master these old congressmen and Senators their daughters wanted to get their autographs and it was a rude obnoxious moment but it goes deeper than the usual political inaction you might expect the American Prospect reports The Ticket Master was leveraging its ties to key government officials to swing the case in their favor quote there is evidence Ticket Master tapped its one-time attorney Mickey caner a close Clinton Confidant then working as us trade representative to keep tabs on the case it's confirmed that caner had made calls on ticket Master's behalf in 1992 while he was General Counsel of Clinton's presidential campaign Pearl Jam tried to do the toour without Ticket Master but they were just too powerful the Department of Justice closed the investigation and the band had to go back to using Ticket Master a few years later lead singer Eddie veter later told Spin Magazine it was really amazing to be right up close and get absolutely stomped on by a huge corporate entity and what did The Ticket Master CEO at the time have to say about all this when you bring that up it's irrelevant to me no one thought the ticketing was a business I thought it was a business I'm not ashamed of that so that's how Ticket Master turned ticketing into a business by inventing the service fee and ushered in the era of rapidly Rising concert prices but where does Live Nation come into all of this just one year after this whole debacle a radio Mogul named Robert X Silman founded a concert promotion company named sfx and entertainment what is the concert promoter you ask promoters do all of the work of arranging the logistics of the show they book the artists the venues the venders they handle all of the payments and they literally promote the show to the public from sfx gut milk presents Bry Spears live promoters make their money by splitting the face value price of the ticket sale so not the service fees with the Artist At a pre-agreed rate sillman did to the promotion industry what Ticket Master did to ticketing aggressive consolidation of the competition after gobbling up a bunch of smaller concert promoters and creating what the New York Times called the concert world's first truly National Force he sold it to the broadcast Monopoly Clear Channel for $4.4 billion and used the money to buy a controlling share of graceand the estate of Elvis Presley you know the guy whose tickets used to be $150 it's good to be the king maybe we W up them cuz maybe we own the king I think it stinks Clear Channel spun it off and Live Nation was born the ticketing and concert promotion aren't the only businesses involved in putting on a live music tour and Live Nation started slowly making their way into other business lines it is also an artist management company a venue operations company and it runs sponsorship and advertisements for major concert tours across the country so by the early 2000s you basically just have two companies that have dominated all of the various businesses in live music but that wasn't enough for them Live Nation wanted the whole industry to themselves Live Nation was starting its own ticket selling business to compete with Ticket Master yeah that's right it was a battle of Titans like Batman v Superman or Godzilla X Kong but just like in those movies The Showdown was a bit anticlimactic and turned into more of a buddy movie did we just become best friends yep they abandoned those plans and in early 2009 announced that they were going to merge these two very very large powerful companies in the entertainment industry and the Obama Administration basically let them get away with it and that's really led to a very dominant Monopoly power for Live Nation ever since they control at least 60% of the top venues in the country 80% of the primary ticket selling Market we made a video with Cory Doo and 2022 that talked about this merger and the history of weakened antitrust policy that led to it you can watch that here but today we're going to dig more into live nation's business model how does this giant company actually make money they might own all of these various business lines but they're not all equal at the core of this business model is its concert promotion business it is a capital intensive hard to- run business with ostensibly very low margins and Live Nation will talk a lot about how they're only earning about a 1.3 1.7% margin on their concert promotion business which is pretty small the way that they are able to do that is because their concert promotion business really drives the rest of the other business line so it drives their ticket selling operation where Live Nation actually gets something like a 37% margin it runs their sponsorship and advertising business line which elicits a 67% commission Live Nation makes almost no money on concert promotion and they make most of their money charging concert goers like you massive service fees and getting sponsorship deals both of which require very little upfront investment they just use the concert promotion business to direct traffic into the parts that do make money it's the ability to get market share which allows you to be able to generate massive sponsorships so the Toyota or Nestle's crunch whatever it might be will give you money market share is the key part there they dominated all these businesses in the industry so that nobody had any choice but to work with them and get ripped off artists for example often don't have a choice but to use Ticket Master for ticketing and Live Nation for promotion let's imagine we just played a soldout show at a venue Live Nation owns an operates when an artist plays these venues they're required to use Live Nation as the promoter we have practically no leverage in negotiating them if they want to take 10% of the revenues and call it a facility fee they can and have if they want to charge $30,000 for the house nut they can and have and if they want to charge us $250 for a stack of 10 clean towels they can and have and live nation's market dominance also means you don't have any choice but pay their fees ticketing fees service fees convenience fees Platinum fees price Master fees per order fees handling fees and payment processing fees among others yeah that's definitely that's definitely too many fees it's also why the same tour is cheaper in other countries where Live Nation doesn't have dominance and it means venue owners don't have freedom to choose either if you don't choose Ticket Master there are consequences to that Live Nation might ref use to run shows at your Venue so you are deprived of the hot concerts that people want to go to that hasn't stopped some venue owners from trying though Tom and Gary don't work with Live Nation but live nation's reach still infiltrates their choices even when they're made with the best intentions for The Fan Experience here's what happened when the radio heads side project the smile played at the pabs theater that show they were very specific about their pricing and what they wanted their pricing to be um we we followed those guidelines but the day that our tickets were announced they were immediately available on The Ticket Master website because Ticket Master controls the secondary Market also so scalpers were able to buy up tickets at the original price and immediately resell them on Ticket Master where Ticket Master takes a fee of course for exorbitant prices so the people that went out and spent $350 for the tickets that were supposed to cost $55 they take that out on the artist or they take it out on us and blame us but in the me time we're all just a part of Live Nation at Ticket Master turning the wheel of meat so they can keep increasing those margins on service fees and on secondary tickets that feed the rest of their business because again they use our business as a loss leader and because concerts are a loss leader fueling their other businesses Live Nation doesn't even care if sold out shows are mostly empty because half the tickets were lost to scalpers this whole business model is notably different from the model that independent venues follow we produce 800 shows a year in order for us to survive for our 300 plus employees to survive annually every single show we do we have to find ways to be able to generate Revenue it's quite the opposite with Live Nation to recap Live Nation the premier live music business doesn't really care about the actual business of putting on live music as much as it cares about the business of scalping tickets and selling Dunkin Donut sponsorships and they've taken away the freedom to choose for everyone in the industry Live Nation is really controlling the entire ecosystem of of most of the concerts that people are going to in this country everything from the point of sale system to the Staffing at the bar to what is being sold at the bar and for how much they're dictating what tours get to come to your Venue how tickets are sold and at what price they're sold and what fees are attached listen to this artist put it a little more bluntly and then it hit me oh my gosh they own all the venues it's a monopoly so then now they just want my body in this room so they can sell food and alcohol so then they're going to make tons of money and then they got me like SCH slepping around the United States talking about I want to be famous okay so now let's revisit that pyramid of live music again 10 years after the Live Nation Ticket Master merger the covid pandemic shook the foundations of this hierarchy to its core no matter where you were in the country rooms like this were the first to close and the last to reopen large corporations were able to position themselves much better coming out of the pandemic than we were as the establishments we have never gotten back to where we were in 2019 the bottom has fallen out of live music so independent venue owners and artists at the small and midsize levels are struggling while Live Nation and the upper echelon of artists that Live Nation works with continue to make massive profits but there is hope Regulators are finally doing something serious about this that video we made back in 2022 was part of a larger campaign from the breakup Ticket Master Coalition in October of of 2022 uh American economic Liberties project where I work and a bunch of allies uh started the breakup Ticket Master Coalition which has sent over a 100,000 letters to the justice department with narratives from artists and fans and venues and independent promoters talking about the Live Nation Monopoly and encouraging the justice department to do something about it and it turns out unlike in 1994 when it was just Pearl Jam testifying the Department of Justice decided they couldn't ignore the m M outcry of anger at these corporations anymore and they filed a lawsuit the lawsuit calls for a breakup of Live Nation and Ticket Master at a minimum uh and it talks about how all of these different business lines reinforce each other and structurally something needs to happen here to allow competition to occur this lawsuit is historic and it has broad implications not just for live music today the entire American economy resembles The Ticket Master model whether we're talking about the airline industry where three or four Airlines control the entire industry whether you're talking about grocery stores where really two companies control so much in all of your communities that by the way are now trying to merge that's Kroger and Albertson's the more concentrated the economy gets the more it stifles creative expression the ability for artists to make art and to get it to the public the ability for the public to be able to consume it concerts have always been a third place outside of work and home for people to gather and share in a special experience that only exists at that that time between the people in that room there's this beautiful creation that that that came out of this empty room you can capture images of that moment but the true Sensation that feeling you get in the room it's like lightning in a bottle and when corporate greed destroys that magic it drives all of us further apart from each other there's a tremendous interest in the technology economy to be able to get you to spend as much time as possible scrolling on your screen getting more and more angry with other people and that's the battle that we fight in our business our goal is to get people away from that it's more important than ever I think to have these spaces where people actually interact on an extremely vulnerable human level Tom's lease is up in 2 years and he isn't planning on renewing is not just Live Nation that is pushing him out of the business it's corporations that have driven up prices in general and giant landlords that are destroying his community I've been doing this work in these rooms since I was 20 years old I'm 50 right now four to five nights a week I've always been very Hands-On four to five nights a week I've been in these rooms creating that magic and at some point you just have to look at it and go you know I've done this a long time it's more important important to me at this point to give this establishment the proper send off that it rightfully deserves it's more important for me to protect um these entities as a whole than to try to hold on to my own brick and mortar any longer than I need to Meanwhile while Tom and Gary are fighting for the future the CEO of Live Nation Michael rapino is fighting against the government's lawsuit and he has a vested interest in keeping things status quo in 2022 to rapino is paid a whopping $139 million he's the perfect example of who benefits in a country filled with rampant monopolization listen to what he said last year when talking about artists and fan complaints about the price of tickets this is a great great product that people will buy as they're going to buy the Gucci bag they're going to buy moments in life where they will step up and spoil themselves the big screen TV and whatever it may be this is what Corporate America has done to our lives what used to be one of the most populous forms of entertainment is now a luxury good and that's why this Department of Justice lawsuit is so important it's been a a corporate America since the regag administration since the 1980s and people have suffered because of that it's a point in time now where hopefully with the current Administration taking seriously Anti-Trust in America that this isn't just about Ticket Master as a monopoly it's about so much more than that hey before you go if you like this video please like And subscribe to our channel the research for this piece included the book Ticket Masters by Dean Budnick and Josh Baron as well as reporting by Mo tassk Christa Brown and Lee Hepner over at the American economic Liberties project as well as some help from the national independent venue Association thank you for watching the classroom we're always looking to tell more stories like this one unpacking economic systems that impact all of our daily lives what other stories do you want to see us cover sound off in the comments and once again again don't forget to like And subscribe