[Random-bits] KEI opposition to Ticketmaster/Live Nation merger

[James Love]

http://www.keionline.org/blogs/2009/02/25/kei-on-ticketmaster-live-nation-merger/

KEI opposition to Ticketmaster/Live Nation merger

The following is the KEI letter to the US Department of Justice on the
proposed merger between Ticketmaster and Live Nation.

February 25, 2009

US Department of Justice
Antitrust Division
950 Pennsylvania Avenue, NW
Washington, DC 20530
E-mail: antitrust.atr@usdoj.gov

Re: Opposition to Ticketmaster/Live Nation Merger

To whom it may concern:

We are writing to express our opposition to the proposed merger of
Ticketmaster and Live Nation.

Knowledge Ecology International (KEI) is a non-profit public interest
organization, supporting work carried out earlier by the Consumer
Project on Technology (CPTech), an organization that has in the past
participated in a number of merger reviews, including those involving
legal publishing, retail distribution, and media concentration and
telecommunications regulation.

Information about KEI is available on the Internet in this website:
http://www.keionline.org.
KEI is opposed to the merger between Ticketmaster and Live Nation.

Ticketmaster is currently the dominant firm that consumers use to book
and purchase tickets to many concerts, theatrical productions, art
exhibits, sports and other live events, having acquired several actual
and potential competitors. It has been estimated that Ticketmaster
controls 70% to 80% of all online concert ticket sales in the United
States.

Live Nation is the largest concert promoter in the United States. Both
Ticketmaster and Live Nation have investments in a number of related
businesses that create some conflicts of interests, and also position
both companies as competitors or potential competitors against each
other in their core businesses.

KEI’s primary concern is the impact of the proposed merger on the public
that attends such live performances, and the artists that provide
performances. We believe greater concentration of ownership in the
ticketing and promotion area will harm both the public and the
performers.

As noted by Senator Charles Schumer statement at a February 24, 2009
hearing of the Senate Antitrust Subcommittee, “Live Nation has a lock on
its side of the market. Think of what this merger would mean if they put
both these companies under the same roof. It would combine the largest
ticket seller in the world with the largest event producer.”

The Department of Justice should take notice of the countless complaints
against Ticketmaster by both the public and performers, including but
not limited to high mark-up fees and the recent cases where Ticketmaster
has used its position to charge higher prices for tickets in both the
primary and the secondary market than artists have supported./1/

The business models used by Live Nation are complex and changing, and
involve efforts by Live Nation to participate as equity partners in the
performances, recordings and merchandise sales of performing artists. If
there is a merger of Ticketmaster and Live Nation, the pressures on
artists to alienate ownership of the creative works will be increased,
and they will be more vulnerable in their business dealings.

Artists often seek to develop a longer term relationships with their
public, and many are willing to take steps to protect the public from
excessive fees for live events. This merger will undermine and
discourage such pro-consumer actions.

One specific risk to the public is that a Live Nation/Ticketmaster
merger would change the primary ticketing system and so that consumers
would be required to bid against each other for tickets. The increased
monopoly power would make it difficult for performers to reject such
proposals.

KEI also has serious concerns over personal privacy. Ticketmaster’s
standard contract of adhesion regarding the uses of information obtain
when selling tickets is already considered abusive. The combination of
Ticketmaster and Live Nation would make matters worse.

KEI is also concerned that the merger will harm many smaller businesses
that are important to both artists and the public. For example, Seth
Hurwitz, co-owner of I.M.P. Productions and the 9:30 Club in Washington,
D.C., stated at the Senate hearing that “If this merger is allowed to
happen, my biggest competitor will have access to all my records … and
they can control which shows are promoted and much more.”

The public values the existence of diverse and independent venues. By
allowing the creation of a giant ticketing and concert promoting
monopoly, the Administration will be making the United States less open
to creativity and will lower the quality of life for people living in
the United States.

For all of these reasons, KEI asks the DOJ Antitrust Division to block
the proposed merger.

Respectfully submitted,

Manon Ress
Director, Information Society Projects
Knowledge Ecology International

cc: John Read, USDOJ, Aaron Hoag, USDOJ.

/1/ Such as the recent scandal involving the rock star Bruce
Springsteen, and his fans who went to Ticketmaster’s website to purchase
tickets to his concerts in New Jersey but were redirected to
TicketsNow.com (owned by Ticketmaster) and were offered tickets at
enormous markups. While Ticketmaster entered into a settlement of the
dispute on Monday, and agreed to pay the state of New Jersey $350,000,
and promised to compensate about 2,200 consumers, this illustrates the
risks of concentration, conflicts of interest, and the questionable
ethical values of the management of Ticketmaster. 
-- 
James Love, Director, Knowledge Ecology International
http://www.keionline.org | mailto:james.love at keionline.org
Wk: +1.202.332.2671 | US Mobile +1.202.361.3040 | Geneva Mobile +41.76.413.6584