Ticketmaster disrupted
Ticketmaster, the world's largest ticket seller, is feeling the pressure of Industry disruption, all fueled by the Internet. Ticketmaster, which has arrangements with over 10,000 concert locations, theaters, sporting events and other clients, saw a 24% decrease in gross income from quarter to quarter.
Ticketmaster is a division of IAC/Interactive, one of the three companies spun off from online conglomerate IAC. According to a story in BusinessWeek ("Ticketmaster faces a full court press", 9/10/08) its near-monopoly domination in selling tickets to big events, is being challenged not by antitrust regulators, but by a gradual realization by many clients that it bypass Ticketmaster's markup and sell direct through the Net.
One big example that the article reports - negotiation haves broken down between Ticketmaster and LiveNation, the #1 rock concert organizer, a client that supplies some 16% of Ticketmaster's revenue. And it is thought that LiveNation will sell its own tickets direct. A number of pro sports teams are also taking over their own ticket sales, and every successful breakaway can only tempt others to try it.
Another big loss for Ticketmaster is in scalping (or as it is now called the "secondary ticket market", and activity hat over the past few years has become perfectly legal in many states. It "has blossomed into a multimillion-dollar business with new players such as StubHub, Tickets.com, and dozens more."
As the BusinessWeek article points out, Ticketmaster is fighting back, partly by setting up its own secondary sales service. It is also going to court, for example, by suing the NBA Cleveland Cavaliers for breach of contract. The Cavaliers are suing back.
The article sees two factors at work: here: as a near-monopoly, Ticketmaster raised fees over the years to a level many found unacceptable. Second, Internet-savvy buyers know how to find what they want with no help from Ticketmaster. (After all, who buys an airplane ticket from a travel agent anymore.). I''d add one more reason: the sports franchises and others who sell tickets want to have a direct relationship with their customers, so they can offer them loyalty bonuses, merchandise, and breaking deals. That's too valuable a resource to surrender to a third party.
9:34:52 PM 
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