Shoot First, Aim Later. The United States Senate Attacks Event Ticketing


Senators Amy Klobuchar and Mike Lee got their hearing yesterday. It was meant to be about live event tickets, but it was really not that. It was about calling Live Nation a monopoly on television. We know this because Senator Klobuchar made her feelings clear, as did others on the panel. That’s odd for someone known to be reasonable, but early in the hearing when introducing witness Clyde Lawrence, founder of the eponymous band Lawrence, Klobuchar took away his punchline wishing to “someday be big enough to crash a ticketing company” by quoting it to him before he began his testimony. This hearing was not a fact finding journey, it was a very modern iteration of our current politics in which people don’t seek facts, they seek confirmation of that which they already believe.

Senator Klobuchar began the hearing with a wistful remembrance of her high school days when it was affordable for students like her to buy tickets for concerts by Led Zeppelin and The Cars. She was concerned that young people today can’t afford $500 to go to a show, and whether there should be action taken to make concerts affordable. Klobuchar said she wanted tickets to be cheaper.

One thing though: the world has changed since the Senator’s school days. A lot of time has passed. So much so that Ric Ocasek, lead singer for The Cars passed away in 2019 at the age of 75. Led Zeppelin played their last show in London at the O2 Arena on December 10, 2007. The band held a lottery for access to tickets. The O2 holds 20,000 people. Twenty million people applied to get tickets.

High demand for certain events in nothing new. Taylor Swift’s tour is just this year’s model. What’s different is the fans. The Zeppelin fans who did not get tickets accepted their reality. Taylor Swift fans did not.

The facts are simple and inarguable. Taylor Swift is playing 52 shows in venues with approximately 2.5 million seats available. As these shows are already being held in football stadiums, the only way to provide more seats is for Swift to add more shows, something Garth Brooks does routinely. Garth will play two shows as day for as many days as it takes to absorb all the demand in a city before moving on to the next location. Each added stadium show opens another 50,000+ tickets for sale.

Math is both simple and brutal. For Swift’s North American tour there are only 2.5 million seats. That’s 125 times as many seats as that last Led Zeppelin show. Still, once they’ve sold, they’re sold. Complaining doesn’t bring more seats, organizing protest doesn’t bring more seats, writing emails and sending power point presentations to Congress doesn’t bring more seats. Only one thing brings more seats: adding shows. Only one person can decide to add more shows: Taylor Swift.

There’s something else significant which has changed since Senator Klobuchar’s school days. It used to be that concerts were advertising, intended to drum up interest in the band and more song plays on the radio in the days before the show. This was all meant to drive fans into stores to make purchases of recorded music. Musicians made their money from selling records, tapes and CDs. First Napster, then streaming services like Spotify killed that revenue stream. Now, people pay $4.99 or $9.99 monthly for access to almost any songs on their devices. Very little of that money goes back to the artist. The money from selling recorded music is gone forever.

The way musicians make money now is to sell tickets to live events. As a result, ticket prices increased. Curiously no one seems too upset that Taylor Swift is on pace to gross nearly $600 million from this current tour. Similarly, there was not a lot of complaining when Adele went on sale in Las Vegas with ticket prices over $750, or when World Series tickets cost $900 and 2023 Super Bowl tickets are currently over $5,000 each.

The problem being addressed is the distress Taylor Swift fans felt when they were denied tickets either because of problems during the ticketing process, or because literally the music stopped and they had no seat. The answers were odd from both sides of the table. The Senators seemed certain that Live Nation could have fixed the problem. That’s a half truth. Live Nation could have done a better job managing the sale process and avoided some of the delays and pain points of that particular sale. However Live Nation has no control over how many seats were for sale. Demand, it turns out far exceeded available seats. This is not a problem of monopolistic practice, it is one of undersupply.

There was zero conversation during the three hour hearing about how to react to excessive demand by securing additional supply. Instead, the primary focus appeared to be surrounding a misunderstanding about Bots. Bots are computer programs which are deployed, sometimes illegally, in an attempt to gather inventory for the purpose of reselling tickets.

However, it appears that nearly 95% of the Taylor Swift tickets went directly to fans who intend to attend the show. Bots may have impacted Ticketmaster’s sale by overwhelming their computing power. They did not reduce the number of tickets sold to fans.

The typical user of Bots has two intended results: to purchase tickets faster than human buyers if possible, and to tie up tickets repeatedly effectively removing them from inventory. That’s likely the cause of much of the delays and errors during the sale. But in the end, the Verified Fan system acted as intended, as a barrier to Bot traffic getting tickets. There were many references during the hearing about how financial institutions don’t have similar problems, yet just last week the Bank of America
had a day long computer issue which affected Zelle transactions. It caused people’s accounts to become overdrawn and triggered fees to be assessed. It took the bank nearly a full day to get the mess sorted out.

There was no discussion about the fact the SeatGeek had its own issues with the five Taylor Swift shows they ticketed. Yet, their technology was as impacted as the Ticketmaster sales. The overwhelming demand swamped their systems too. The real lesson of the Swift tour is that everyone has to increase the ability of their ticketing system to absorb massive demand.

Zach Bryan is currently taking pre-registrations for his “all my homies hate Ticketmaster” tour. Ticketing is being handled by AXS, owned by entertainment giant AEG which owns the 02 (where Led Zeppelin played their last show) and Golden Voice which produces the massive Coachella music festival. Even so, on January 19th as the Zach Bryan registration window opened on AXS, registrations bogged down and posts hit social media complaining about the process.

There were some other curious omissions in the hearing process. First, there appeared to be no recognition about Live Nation being a publicly traded company with a duty by law to its shareholders. Their legal obligation is to their many shareholders. Second, there was confusion about market share. Ticketmaster has 100% market share of the venues it tickets. But, that’s a false statistic. There are theaters, arenas and stadiums in nearly every city. Ticketmaster’s reach is significant, but it is not the only ticketing option across the entire ecosystem. They may indeed have half of the present ticketing market, but there is more competition coming.

The INTIX (International Ticketing Association) conference is taking place this week in Seattle. Here is a partial list of the ticketing companies in attendance, all of whom have enough capital and market share to send a team: Vivenu, Paciolan, Tixly, Secutix, True Tickets, AXS, FEVO
, Uptix, See Tickets, Red 61, eTix,, TicTacTix, B.A.M. Ticketing, KIS Technologies, Patron Technologies, Saffire, Spektrix,, Ticket Socket, TickX, Tix, Tix Track, Total Ticketing, VBO Tickets, and UpStage Technologies. These are only some of the companies who are in attendance. Ticketing is an expanding marketplace with a lot of new investment being made to access the space.

During the hearing there also seemed to be concern about the fact that Live Nation’s revenue grew over the past decade. Part of that revenue growth is attributable to the work the company did to get bigger. Another part of that growth was incidental, as prices of everything increased. Real Estate agents got a similar boost in their commissions as home prices went up, and tipped employees saw similar gains. During periods of inflation, as prices go up, revenues go up.

New entrants into a market space have to compete with the established players. That’s how it works. They’ve done the pioneering work to build the business. Before Ticketmaster started gaining traction, to buy a ticket you had to line up outside the box office or find a record store with a ticketing machine. Now that tickets are sold online, there are more competitors to get seats, but the size of the venues remain the same.

Competition is fierce. It’s how the game plays. Computers are now built by companies from all over the globe, but IBM
is still significant. Tesla kicked open the doors to electric cars, but GM and Ford outsell them. Kleenex and Coca Cola are iconic brands grocery store brands, but now you can also get them delivered by Amazon
. Success in America takes time, energy and the willingness to innovate.

Taylor Swift is one of the most popular performers on the planet. She should be congratulated for building such a strong community of fans, and creating an enormous catalogue of songs. For the moment, she can likely sell out any theater in the world. Her tremendous success is not the measure for how any of the companies which support the live entertainment industry should run.

Instead, let’s celebrate Swift’s music, however we are able. And, in a perfect world, perhaps Swift will invite Clyde Lawrence onto her stage somewhere to help sing a song. It’s rare to see someone come across the television as a modern day Mr. Smith in Washington. If yesterday’s hearing had any meaningful result, perhaps it was to introduce the band Lawrence to a broader audience.

Forbes Business
Read More