TicketMaster has exclusive contracts with the vast majority of venues and just about every large one. These contracts include kickbacks where TicketMaster will add $X of fees to each ticket it sells and pass back Y$ (Y It's essentially the venues and artists outsourcing the job of "being the asshole" to TicketMaster as a large chunk of the money eventually flow back. They get to publicly blame TicketMaster, claim the…
The artists can do better too, if they have the power to make TM share the upside (most don't) because TM controls much of the resale market and is also moving towards surge pricing. This is why they're pushing into virtual ticketing so hard (Ticket-less Master?) TM also has huge vertical integration. If you want to perform a live show at almost any mid/large venue your tour is likely to be managed by Live Nation, an…
Ask HN: Why is it so hard to disrupt Ticketmaster?
61–70 of 126 posts
Re: Ask HN: Why is it so hard to disrupt Ticketmaster?
#62Let's see. LYV is the parent company (including venues, etc). They are worth $16 billion (or about 1/4th an Elontwitter). They had revenue of $6 billion and made a EBITDA of $573m. So disruption of the Ticketmaster monopoly is going to result in $500 million? Perhaps? They don't seem to be printing money as much as everything thinks they are. Someone could buy LYV and show people how you really milk a market to death…
That's a good data point, the market is surprisingly small which could account for lack of competition. But the last annual report has the ticketing org alone at 37% EBITDA margin [1] (they call it AOI). No expert on benchmarking this # but wouldn't say they're not milking it. [1] https://d1io3yog0oux5.cloudfront.net/_6fc34851c72a6087b32b93... p47
37% EBITDA is in line with APPL (31%) and relatively low when you consider that APPL produces a ton of actual physical goods.
It seems that companies that go much above 35% start "investing" in stupid shit (FB hit 50% EBITDA margin in 2018 and then went nuts with Meta, dragging themselves back down to the 30s).
I'd say that these are rookie numbers and they could get that stuff to 50% or more (though some of it they wash into the venue and book on another part of the ledger).
Re: Ask HN: Why is it so hard to disrupt Ticketmaster?
#63Earlier quoted context omitted.
Ticketmaster was just as bad and just as monopolistic in the 80s and 90s.
How did they do algorithmic pricing then? Send updated price lists every morning to all ticket vendors via fax? Ticketmaster today is significantly worse than even the entity I remember in the 2000s. The worst they'd do is charge 20% out of thin air for a "processing fee", and in any case, there were alternatives available, like buying paper tickets from record stores or directly at the venue.
They just charged a shitton and tacked on bullshit fees.
The fact that they're now algorithmically predatory does not mean they are any less predatory than before. They have always used every tool available to them to extract as much money as they could from people.
Those paper tickets from record stores and those directly at the venue were purchased through Ticketmaster. For anything of note. It's why Pearl Jam tried to fight them in 1994.
https://www.rollingstone.com/music/music-news/pearl-jam-taki...
Their next concert is at Innings Festival in Tempe, AZ. You can buy your tickets at Ticketmaster. So that's how well that went.
Re: Ask HN: Why is it so hard to disrupt Ticketmaster?
#64The reason resellers exist is because people are prepared to pay many multiples of the face value for tickets. If people stopped buying tickets on the secondary market, the resellers would be left with worthless paper they paid thousands of dollars for and the secondary market would disappear.
TM is actively dismantling the secondary ticket market by (a) being a secondary market themselves, (b) pushing paperless tickets so they are very hard to transfer, (c) surge pricing to capture the margin the secondary market needs.
There's both pros and cons to this outcome, but I don't believe havig TM as the single owner of the entire live event industry is on the whole, a good one.
Re: Ask HN: Why is it so hard to disrupt Ticketmaster?
#65I spent a fair bit of time researching this space as it seemed like an obviously good startup idea. It turns out that almost everyone who you think would benefit from a better system have already been coopted by the current players. It's definitely an uphill battle.
To put it into perspective I work for two years at Amazon to try to create a competitor to Ticketmaster. Our ticket sales infrastructure wasn’t quite as polished as Ticketmaster is but it was passable. What killed the product though is that we couldn’t get any reasonably sized contracts in the United States. So even a company with the motivation to burn capital the size of Amazon couldn’t swing competing with Ticketm…
You have to look at it this way: Ticketmaster's job isn't so much "selling tickets", as being the "designated bad guys" so artists and venues don't have to be. Everyone gets their cut.
Re: Ask HN: Why is it so hard to disrupt Ticketmaster?
#66Read the book Ticket Masters. Explains how they've basically formed a monopoly via their merger with LiveNation - Ticket Master controls all major venues and thus all ticketing systems. https://www.amazon.com/Ticket-Masters-Concert-Industry-Scalp...
>they've basically formed a monopoly via their merger with LiveNation
Having a DoJ that absolutely adores mergers - that might not be working out for us.
Re: Ask HN: Why is it so hard to disrupt Ticketmaster?
#67TicketMaster has exclusive contracts with the vast majority of venues and just about every large one. These contracts include kickbacks where TicketMaster will add $X of fees to each ticket it sells and pass back Y$ (Y It's essentially the venues and artists outsourcing the job of "being the asshole" to TicketMaster as a large chunk of the money eventually flow back. They get to publicly blame TicketMaster, claim the…
You still get hit with fees at the door in my experience. Considering most venues bigger than a bar are owned by livenation which is the same company as Ticketmaster…
Re: Ask HN: Why is it so hard to disrupt Ticketmaster?
#68I think it’s not so straightforward what your competitive advantage is. Charging customers lower fees isn’t so simple because Ticketmaster splits the fees with the venue. So I guess you need to take an even smaller cut than 50%. But can you afford to run a profitable business off of smaller margins than that? In a sense this situation came about because people want ticket prices to be ‘fair’. They don’t want to pay $…
thats the reality, Taylor Swift tickets would probably be priced at $1k a ticket and would still sell out
Re: Ask HN: Why is it so hard to disrupt Ticketmaster?
#69I think big artists need to start doing what some large sporting events do and sell a significant proportion of tickets on a ballot system. Instead of being first come first served, anyone who registered to buy a ticket (possibly paying a deposit to disincentivize duplicate entries) would go in the draw for the opportunity to buy a ticket, preventing things turning into an auction benefiting those who have the fastes…
Thats what these presales were. They were limited to Taylor Swift fans that essentially were entered in a lottery
Re: Ask HN: Why is it so hard to disrupt Ticketmaster?
#70I think its so naive for anyone to think that this problem won't exist within the same rules that are currently set for any company.
As long as there is an arbitrage opportunity and its incredibly profitable this will always exist. Tickets are priced too low, and there are very sophisticated companies who's only purpose is to buy and resell. This was SeatGeek's original premise to optimize when to sell and buy.
I'm not really even sure what the complaints are... yes theres limited quantity and incredible demand. The only real solution is you limit who can buy by price or exclusivity.