Why Ticketmaster is Not a Monopoly
Ticketmaster, a ticket sales and distribution service, has been accused of being a monopoly in the ticketing industry. But is it really a monopoly? In this blog post, we will explore why Ticketmaster is not a monopoly, despite its large market share and influence in the industry.
What is a Monopoly?
A monopoly is a situation in which a single company or entity dominates and controls an entire market or industry, giving it the power to set prices, limit competition, and control supply and demand. In a monopoly, consumers have limited options and are forced to pay higher prices for goods and services.
Ticketmaster’s Market Share
The argument for Ticketmaster being a monopoly in the ticketing industry is based on their large market share. According to Statista, Ticketmaster held a 73% market share in North America in 2018, with the next closest competitor, StubHub, at only 14%.
While their market share is significant, a high market share alone does not make a monopoly. It is important to consider the level of competition in the industry as well as the barriers to entry for new companies.
Competition in the Ticketing Industry
Despite their dominance in the market, Ticketmaster faces competition from several other companies, including StubHub, Live Nation, and Eventbrite. While these companies may not have the same level of market share as Ticketmaster, they still operate in the industry and offer consumers alternative options for purchasing tickets.
Ticketmaster also faces competition from venues and artists who sell tickets directly to consumers. In recent years, popular artists such as Taylor Swift and Ed Sheeran have chosen to bypass Ticketmaster and sell tickets directly to fans through their own websites and apps.
Barriers to Entry
Another important factor to consider when determining if Ticketmaster is a monopoly is the barriers to entry for new companies. In the ticketing industry, there are several significant barriers to entry, including:
- The cost of building and maintaining a ticketing platform
- The need to establish relationships with venues, promoters, and artists
- The cost of marketing and advertising to attract customers
These barriers to entry make it difficult for new companies to enter the market and compete with established players like Ticketmaster. However, they do not necessarily make Ticketmaster a monopoly.
Regulation and Oversight
The ticketing industry is regulated by various state and federal laws, which help prevent monopolistic behavior. For example, the Sherman Antitrust Act of 1890 prohibits monopolies and other anti-competitive business practices. The act is enforced by the Federal Trade Commission, which investigates and takes legal action against companies that engage in anti-competitive behavior.
Ticketmaster also operates in a highly visible industry, meaning any attempts to engage in anti-competitive behavior would likely draw scrutiny from customers, competitors, and regulators. This oversight helps ensure that Ticketmaster, and other companies in the industry, operate in a fair and competitive manner.
While Ticketmaster may have a significant market share in the ticketing industry, it is not a monopoly. The company faces competition from several other companies and even directly from venues and artists. There are also significant barriers to entry for new companies wishing to enter the market.
Furthermore, the industry is regulated by state and federal laws, and there is oversight from regulators to prevent monopolistic behavior. As such, while Ticketmaster may enjoy a dominant position in the industry, it is not a monopoly.