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Explainer: The US government aims to end entertainment giant Live Nation’s alleged monopoly. Will S’pore be affected?

SINGAPORE – Hoping to break its alleged monopoly over the live concert industry in the United States, the country’s Department of Justice has filed a lawsuit against Ticketmaster and its parent company Live Nation.

The 128-page antitrust lawsuit was joined by 29 U.S. state and district attorneys general on Thursday (May 23), alleging that Live Nation and Ticketmaster used anticompetitive practices that have suffocated the concert and ticketing industry. .

The U.S. government alleges that anticompetitive practices have caused concertgoers to face high ticket prices and have prohibited innovation and competition.

Through the lawsuit, the United States hopes that Live Nation will be ordered to “at a minimum” divest from Ticketmaster and cease any anti-competitive behavior.

US lawmakers have long accused Live Nation of engaging in such practices. Early last year, a congressional hearing was held about the problems fans were facing when trying to buy tickets to pop singer Taylor Swift’s The Eras Tour. Fans in Singapore also encountered similar problems.

In response to the civil suit on Thursday, Dan Wall, Live Nation’s executive vice president of corporate and regulatory affairs, said the lawsuit does not address problems in the concert and ticketing industry, and wrongly targets Live Nation and Ticketmaster.

“It ignores everything that’s really responsible for rising ticket prices, from rising production costs to artist popularity to 24/7 online ticket sales , which reveals the public’s willingness to pay much more than primary ticket prices,” Wall wrote in a blog. on the company website.

He added that the lawsuit is “anti-business.”

Does Live Nation have a monopoly and how will this lawsuit affect Singapore’s concert and ticketing system?

WHAT THE LAWSUIT SEEKS TO ADDRESS

Live Nation is essentially a one-stop shop for live entertainment: it provides promotional services, has ticketing services through Ticketmaster, and owns several performance venues.

The US government has accused Live Nation of dominating the industry through what TI called a self-reinforcing “flywheel.”

If venues did not use Ticketmaster’s services, they risked losing access to Live Nation-managed performances and tours, which can be a costly mistake.

Live Nation has produced concerts by celebrities such as rapper Post Malone, while the entertainment giant has promoted its sold-out tours by pop stars Taylor Swift and Beyoncé.

It’s not just about the venues: the complaint alleged that artists also had to use Live Nation’s promotional services or they wouldn’t be able to perform at their venues.

This ecosystem supposedly made it increasingly expensive for industry competitors. And in the absence of competition, the United States stated that Ticketmaster had no incentive to invest in its systems.

The lack of competition also means Live Nation could charge consumers various fees, which the lawsuit called the “Ticketmaster tax,” such as service fees, setup fees, payment processing fees and more.

“These strategies are part of a series of deliberate and defensive actions and decisions designed to lock down venues, exclude competitors, and hold the industry hostage to innovation and evolution,” the United States said in its lawsuit.

IS LIVE NATION A MONOPOLY?

In 2010, the US Department of Justice approved a merger of Live Nation and Ticketmaster, but with several conditions to ensure that the conglomerate did not act in an anti-competitive manner.

The antitrust order was intended to ensure that Live Nation could not retaliate against a venue for using another ticketing service besides Ticketmaster, among other things.

After the merger, Live Nation grew to become, in its own words, the “largest live entertainment company in the world.”

He was charged with anticompetitive behavior in 2019 by the US Department of Justice, but reached an undisclosed settlement.

In the latest lawsuit, it was claimed that Live Nation manages more than 400 music artists and controls 265 concert venues in North America, including more than 60 of the top 100 amphitheaters in the United States.

Through Ticketmaster, it controls about 80 percent of concert tickets at major concert halls.

Live Nation reported on May 3 that revenue rose 21 per cent to US$3.8 billion (S$5.13 billion) for the first quarter ended March 31 this year. This figure was well above previous estimates of $3.26 billion.

Although facts and figures like these have prompted American lawmakers to describe the entertainment giant as a monopoly, they disagree.

Wall of Live Nation said Thursday that it doesn’t make its profits from “monopoly pricing,” saying the company’s service charges are no higher than those of other ticketing sites such as SeatGeek and AXS.

“In fact, when Ticketmaster loses a location to SeatGeek, service charges often increase substantially,” Wall added.

“And even taking into account sponsorship, an advertising business that helps keep ticket prices low, Live Nation’s overall net profit margin is at the low end of profitable S&P 500 companies.”

The S&P 500 is a list of the 500 largest companies in the country.

WILL SINGAPORE BE AFFECTED?

Depending on the outcome of the U.S. Department of Justice lawsuit, concertgoers here could be affected.

If the result were to result in greater competition in the industry, this could pressure Ticketmaster to charge less for its services, which could mean that performing artists are in a position to charge lower prices for tickets to concertgoers.

Dr Hannah Chang, associate professor of marketing at Singapore Management University, said if demand results in concerts needing to turn to multiple ticketing platforms, it could become more difficult for attendees to buy tickets.

This could also hurt artists.

“These problems are likely to be limited for megastars like Taylor Swift or Jay Chou, where their fans will find a way to do it.” (to buy their tickets),” he added.

“For others, and particularly emerging artists, it may be beneficial to be able to reach global audiences through a single platform, rather than through a combination of platforms.

“For example, if each concert uses a different platform, ticketing processes in different languages ​​and currencies are likely to be more difficult to standardize.”

However, the lawsuit’s impact could be limited here: Live Nation’s control over Singapore’s concert industry is arguably less than in the United States.

For one thing, it does not have any stores in Singapore, unlike in the United States.

While it is unclear whether Ticketmaster has exclusive rights to provide its services anywhere, it does not have exclusivity for the National Stadium and the Singapore Indoor Stadium, which have capacities of 55,000 and 12,000 respectively.

A 2019 press release indicated that it is one of three ticket agents allowed to operate at the venues. The other two ticketing agents are Sistic and Ticketek from Australia.

Ultimately, the impact will depend on the outcome of the lawsuit, which could take years.

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