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Comment by jandrese | Hacker News Reader

I find it amazing that nobody can seem to outcompete Ticketmaster. It can't really take $15 per ticket to serve up 5 webpages. Are the costs of entry really that high? It doesn't seem like selling tickets should be that hard. How can a simple middleman maintain such a massive profit margin for so long?

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They are actually Live Nation which before the merger was a spin off from Clear Channel. So they have all kinds of legacy venue usage rights and exclusive contracts. It's so incredibly blatantly anti-competitive and yet the merger was allowed: Google, Microsoft, Intel, piles of companies were against the merger.

So it's not amazing at all. And then it's perfect for many entertainers because they can use Ticketmaster as a scapegoat for such high ticket prices and exclusivity.

To give people what the 'exclusive venue' right look like. If a venue uses ticketmaster, and breaks the contract, they can't sign with another ticket vendor for one year. That pretty much locks everybody else out of the market. Or the venue is going to have one very quiet year.

What if you sold those venues software that let them be their own vendor?

It wouldn't be anywhere as convenient as something like the online ticket vendors.

That's exactly the kind of thing that anti monopoly legislation prevents. So, my guess is those terms are not enforceable unless they have a specific end date. Also, TM is probably fairly lean and kicks back a lot of there margin to any of the major players.

If a venue uses ticketmaster, and breaks the contract, they can't sign with another ticket vendor for one year.

Can't sign with another vendor per the contract they just broke?

Breaking in this sense being "does not renew" contract with Ticketmaster, the venue is not allowed to sign a contract with a new supplier for another year. They are not paying TicketMaster any longer, but they are open to a lawsuit if they sign with another vendor. It's like a one year non-compete.

> * How can a simple middleman maintain such a massive profit margin for so long?*

They merged with a large owner of venues (LiveNation), so they own the venues as well

You aren't the customer. The venues/teams/promoters are.

Yep. If you want to outcompete Ticketmaster you have to increase your revenue by jacking up the ticket prices even more (so your real customers get more money).

What if a startup worked with upcoming artists to book venues that aren't your typical music venues? The venue gets traffic it wouldn't have otherwise gotten, the artist keeps ticket prices lower (which promotes more exposure with their fans, and increases the profitability of touring).

Not a lot of venues that "aren't your typical music venues" have the kind of infrastructure (including but not limited to security procedures and PA) necessary for the kinds of bands LiveNation is signing.

^ This

A lot of the fees actually go directly to the venue, and not to Ticketmaster.

Ticketmaster interfaces with a large number of absorbed Ticketing services and inventory that they've acquired over the years. Sure selling tickets shouldn't be hard, but try doing it with the number of legacy systems ticketmaster has to work with... especially considering they have so many. Sure they could rewrite a single system, but they have plenty of teams and applications that interface with specific services that they'd not only have to rebuild the system, but make it compatible with the hundreds of stakeholder's applications (ranging from Sports, Theatre, concerts..).

Exclusive contracts? Owning the venues?

Yes. TM has exclusives with all of the venues you've heard of, so you'll at least have to break into those negotiations, which are for contracts lasting around 5 years.

The thing is, the venues get part of that fee. So they're not going to be interested in working with anybody who would get rid of that fee.

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