--:-- Sean Rameswaram: Are you ready for it? Taylor Swift's fans were, but Ticketmaster wasn't. Ticketmaster announcing that it is now canceling the general public ticket sale for Taylor Swift's first tour in five years after a chaotic and glitch-filled presale event.
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--:-- Sean Rameswaram: Uh, it was canceled. That's so interesting. That means it's never going to happen again. That's what canceled means. The great war has begun between Taylor Swift fans and Ticketmaster.
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--:-- Sean Rameswaram: Why is Ticketmaster still in business? Why? It's like the situation was already bad and it just keeps getting worse. You have one job, it's to sell tickets. Why are you so bad at it? If I were this bad at my job, I would have been fired.
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--:-- Sean Rameswaram: Swifties still haven't forgiven Jake Gyllenhaal. What will they do to live music's biggest monopoly? That's coming up on Today Explained. You don't even need a ticket. Support for Today Explained comes from BetterHelp.
--:-- [Sound effects: Music starts playing again]
--:-- Sean Rameswaram: Let me tell you a true story. Last weekend, I got an email from a listener who wanted to discuss their problems with me. And I said, look, I don't think that this is about me personally. At least I hope it's not. Why don't you try BetterHelp.com slash Explained? Absolute truth.
--:-- [Sound effects: Music continues to play]
--:-- Sean Rameswaram: As the largest online therapy provider in the world, BetterHelp can provide access to mental health professionals with a diverse variety of expertise. Find the one with BetterHelp. The one is not me, guys. Our listeners get 10% off their first month at BetterHelp.com slash explain. That's BetterHelp.com slash explained.
--:-- [Sound effects: Music fades out]
--:-- Sean Rameswaram: We all have moments where we could have done better, like cutting your own hair. Oh, yikes. Or forgetting sunscreen, so now you look like a tomato. Ouch. Could have done better. Same goes for where you invest. Level up and invest smarter with Schwab. Get market insights, education, and human help when you need it. Learn more at schwab.com.
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--:-- Sean Rameswaram: What would happen if you just called Taylor up and just say, what just, you know, what happened? How did this go so south? Today Explained featuring Jason Kebler, who's here to tell us how Swifties might finally take down Ticketmaster.
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--:-- Sean Rameswaram: Jason's the editor-in-chief of the motherboard section at Vice, but long before that, he used to be a scalper.
--:-- Jason Kebler: I kind of fell into it accidentally. I had tickets to see Linkin Park in high school. And at the time, I was sort of obsessed with eBay, so I just put them on eBay, and they got bid up to, you know, $100 over what I paid. And I was like, wow, like I can use this to go see some movies or something, hang out with my friends.
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--:-- Jason Kebler: And so after that, I was like, oh, I wonder if I could do this on purpose. I started sort of diving into the world of ticket scalping. Like there are all these secret forums that you pay for access to. And on these forums, people share tips and tricks for how to get tickets, how to access pre-sale passwords. There's like all this software that you can use to detect things like ticket drops, which are when a show looks like it's sold out, but then later Ticketmaster releases extra tickets.
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--:-- Jason Kebler: You'll get like an alert saying, hey, go buy these right now. I made a decent amount of money for a little while and then I got really disorganized and I started buying tickets to shows I shouldn't have and ended up in a lot of credit card debt. That took me five years to pay off.
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--:-- Jason Kebler: But that doesn't mean that people who are good at it don't make a lot. So does your familiarity with the Ticketmaster ecosystem mean that you were less surprised last week to see Swifties around the country and the world throw a fit over their inability to get tickets to see their favorite artist?
--:-- Sean Rameswaram: I knew this would happen. Like I was positive that this would happen. It's like Taylor Swift is, in my opinion, the biggest, like the hottest ticket that I can imagine at this point. And historically, that's been the case, too. It's always been really hard to get Taylor Swift tickets for every tour she's ever done.
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--:-- Sean Rameswaram: Take a look at the crowd at the Staples Center in Los Angeles, where Taylor Swift sold out four shows within minutes. Well, good evening, Los Angeles. It's almost like a ritual at this point. It's like big band or big artist announces a major tour. Tickets go on sale. Ticketmaster either crashes or everything sells out instantly and everyone is freely mad.
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--:-- Sean Rameswaram: And then I come in and explain what happens because I've now seen this for a decade. And it's the same story every time. For all the non-Swifties out there, could you help us understand what happened last week with this particular tour?
--:-- Jason Kebler: Taylor Swift announces the Ares tour. It's the news that Swifties have been waiting for Taylor Swift announcing this morning that she's going on tour. It is on the back of her newest album, which everyone really likes, seemingly. And basically, they announce a series of pre-sales and then a public on sale.
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--:-- Jason Kebler: If you're going to try to get tickets during Taylor Swift pre-sale but have no idea what you're doing, this video is for you. So if your internet works a little faster on your phone, maybe use your phone. If it works a lot better on your laptop, do that. Once you do that, you'll get a message like this in your inbox just telling you that you have successfully registered for pre-sale.
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--:-- Jason Kebler: So this means that you've bought Taylor Swift tickets in the past. It means that you're part of her fan club. It means that you pre-registered and won a lottery. So you get a special password that allows you to buy tickets early.
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--:-- Jason Kebler: If you got selected, you'll get a message like this. And basically it will have your access code as well as a link to the presale. If you don't get tickets, it's okay. Take a breath. You'll still have a chance on Friday when they go on sale to the general public. Have fun. I'm so excited.
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--:-- Sean Rameswaram: They do the pre and even by limiting these pre to you know Capital One credit card holders Ticketmaster site crashes The great war has begun between Taylor Swift fans and Ticketmaster. Unprecedented demand for the musician's first tour in five years was off the charts and Ticketmaster's servers weren't ready for it. Millions of people hit Ticketmaster's site at the same time.
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--:-- Sean Rameswaram: There are 2,000 plus people in front of me in line. And a friend of mine who is also waiting in line also has 2,000 plus people in front of her. So we didn't get good places in the queue. Hi, friends in Swifties. Yet another update. I am so comfortable with my 2,000 plus place in line that I'm walking around my house now. I had a snack. It's going great. Just kidding.
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--:-- Sean Rameswaram: They sell, I heard, 2 million tickets across the country. So tons and tons of people do get tickets. I got them. I got the Taylor Swift tickets. I'm paid $126 to be in the section 500. But the truth is, is that I would have paid anything to not be in that queue anymore. Places that are easier to get into than Taylor Swift's Aeros tour. Harvard. The Illuminati. Area 51.
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--:-- Sean Rameswaram: And there was supposed to be this public on sale where basically the plebs can go by. The people who don't have, you know, a presale password or this special access can go buy tickets. And so lots of Taylor Swift fans are waiting for this public on sale. And last week, the day before the public on sale, which was supposed to be Friday, Ticketmaster announces there's not going to be a public on sale.
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--:-- Sean Rameswaram: Ticketmaster canceled the public sale on Thursday, citing extraordinary high demand on ticketing systems and insufficient remaining ticket inventory. People go apoplectic, like they are so mad because essentially they feel like they didn't ever have a shot at buying these tickets.
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--:-- Sean Rameswaram: The thing is, is if you have no tickets, how are you the ticket master? So there's no way that you don't have any tickets left, in my opinion. Why were tickets so hard to get for this particular tour?
--:-- Jason Kebler: The fundamental reason that tickets are so hard to get for something like Taylor Swift is that there are way more people who want to buy tickets than tickets that actually exist. It's like a fundamental supply and demand issue.
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--:-- Jason Kebler: You have this limited resource, which is seats in a specific venue for a specific time and day to see a human being play a concert. There are millions and millions of Taylor Swift fans. And there are just, you know, 50,000 or 80,000 seats in a football stadium.
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--:-- Jason Kebler: Don't blame me. Love made me crazy. If it doesn't, you ain't doing it right. I wouldn't blame Taylor Swift for this debacle. I think Taylor has done as much as is humanly possible and continues to do what she can to make sure that the most number of people can see her shows.
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--:-- Jason Kebler: I think one thing that I should point out is she's playing exclusively in football stadiums, which are the biggest venues that exist in North America, more or less. By and large, football stadiums are the largest venues. Many of them hold 80,000, 90,000 people.
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--:-- Jason Kebler: And she's playing multiple dates in each city. And she's added shows, which is basically all she can do. She can do her part to sort of increase supply of tickets. And the way that she does that is she can just keep adding shows until demand comes down.
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--:-- Jason Kebler: The question is, what is the ceiling on demand for Taylor Swift? We certainly haven't found it yet. And there's also seemingly not much of a ceiling on prices. These tickets were going out from Ticketmaster at prices that were shocking people across the internet, right?
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--:-- Jason Kebler: Why was that? Yeah, Ticketmaster has rolled out this system called dynamic pricing over the last few years, which uses an algorithm to predict the demand for any given ticket. It takes historical data for specific artists and specific venues and similar artists and so on and so forth.
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--:-- Jason Kebler: And essentially attempts to predict the highest price that people are going to be willing to pay that will still sell out the show. And that really upsets people, although it is successful in sort of stopping ticket scalpers because the higher our prices at the outset, the less margin that a ticket scalper is going to be able to make on the sale of that ticket and the more risk that they're taking on by paying more upfront.
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--:-- Sean Rameswaram: It seems like dynamic pricing was not used for this Taylor Swift tour. I mean, don't get me wrong, the tickets are really expensive. It's like floor seats are $300, but it seems like they are set at that price versus like one person will pay $300 for a floor seat and another person will pay $900 for a floor seat.
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--:-- Sean Rameswaram: Taylor Swift is apologizing to her fans for the disaster. She posted her frustrations on Instagram today saying, I'm not going to make excuses for anyone because we asked them multiple times if they could handle this kind of demand. And we were assured they could.
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--:-- Sean Rameswaram: What does Ticketmaster have to say for how this all went down? Ticketmaster's line, and this has been their line for a long time, is that there are more people who want to buy tickets than tickets that exist. Sorry. It's just like unprecedented demand limited resource sorry that's that's pretty much all they've ever had to say.
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--:-- Sean Rameswaram: Taylor Swift might be the one artist with enough cachet and power and fans to actually change this could she I think that Taylor Swift if she wants to can bring a huge magnifying glass to the issue that Ticketmaster is a monopoly.
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--:-- Morgan Harper: I work for an organization that's an anti-monopoly organization, and we had done some research that identified Live Nation Ticketmaster as one of the key monopolies that were a problem in the economy and that the government didn't do enough to stop when they merged in 2010.
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--:-- Morgan Harper: And this problem here, it predates Taylor Swift, but it isn't as old as Ticketmaster because this wasn't always as big a problem as it is right now. When does this start to get really problematic?
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--:-- Morgan Harper: Well, there were people as early as the 90s saying that something was up with Ticketmaster. And, you know, in the mid 90s, Pearl Jam, if people remember Pearl Jam. Pearl Jam versus Ticketmaster. Classic battle of art versus commerce right there.
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--:-- Morgan Harper: Bruce Springsteen has spoken out about this issue before. What really started to accelerate a lot of the harms was when Ticketmaster and Live Nation came together in 2010. So before that merger, Ticketmaster controlled about 70% of the ticketing market.
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--:-- Morgan Harper: But when you combine them with Live Nation that also is managing artists and running tours, running the promotional companies that organize tours, Well, then you start to have a vertical integration that is a tremendous amount of power. And it's very difficult for anyone to compete with that.
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--:-- Morgan Harper: Company execs say the deal will revive the music industry by making everything more efficient. Does anyone speak up in the moment? A ton of people were speaking up. I mean, that's that's almost what makes this kind of crazy.
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--:-- Morgan Harper: I mean, you know, it's great to see the momentum right now. But there have been so many people, independent venue owners, artists, consumer advocates that were ringing the alarm about the dangers of this merger leading up to 2010.
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--:-- Morgan Harper: Their companies are both Goliaths. So their unification will create a business with extraordinary market power and clout unlike any that I've ever seen in my lifetime. And they were ignored. The Department of Justice was asleep at the wheel, you know, we would argue, and said, you know, hey, Ticketmaster Live Nation, you make a little changes here, divest a little bit here, and we're just going to let this proceed.
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--:-- Morgan Harper: And wink, wink, we think, you know, it'll not be anti-competitive if you say so. So they negotiated this consent decree and Live Nation Ticketmaster has pretty much been blowing through it since then.
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--:-- Morgan Harper: I think a lot of people just want to get tickets without paying a ton of fees and, you know, getting like placed in some 12 hour queue online at 10 a.m. How does Ticketmaster and Live Nation make that experience worse for people?
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--:-- Morgan Harper: Essentially, you know, when an artist says that they're going to go on tour, well, there's a company that is managing that tour for them. And then the company decides which ticketing service they're going to use for that tour. And certain venues, some of which Live Nation owns, they actually now also own venues.
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--:-- Morgan Harper: They say, if you want to come to our venue, well, then you have to use Ticketmaster. And then once you in the throes of the monopolist right well then you stuck And they are gonna start being able to charge fees and going to include these service fees that you know in some cases up to 78 of the ticket.
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--:-- Morgan Harper: And what is that money going towards? Who knows? Because they don't have to tell you because they know that that artist and the fan doesn't have anywhere else to go if they want to attend that concert.
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--:-- Morgan Harper: So that's kind of, you know, how this works is it's contracts, it's somewhat in the background. But then what it trickles down to is fans and consumers having a really bad experience and not totally understanding why. But it's the monopoly behavior behind that that is, they're engaging in anti-competitive tactics.
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--:-- Morgan Harper: How does Live Nation and Ticketmaster respond to the claim that they control way too many levels of this market? You know, the key response is one that you will often hear from monopolists. They will most directly point to some other company that is in the market that people have heard of.
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--:-- Morgan Harper: So in this case, I would say, you know, Live Nation Ticketmaster often will say, we can't possibly be a monopoly. There's another company that does things like we do, AEG. And so how could it possibly be that we're a monopoly when there's another company, right?
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--:-- Morgan Harper: And that is such a ridiculous argument because, you know, we don't have all of the exact data, but let's say AEG, you know, maybe controls 20% of the market. It's absolutely the case that there can be other companies that are operating, but none of them are even coming close to the amount of market share that Live Nation Ticketmaster controls.
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--:-- Morgan Harper: And more importantly, they are not controlling all these different business streams that we described. And so that's what really makes this monopoly-like power so, so dangerous to anyone else who is trying to make money in the live events industry, is that they're vertically integrated, they're multiple lines of business, and they have all this data that's overlaying everything that they can then use for anti-competitive purposes against anyone who becomes a threat.
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--:-- Morgan Harper: And we found out late last week that the Justice Department has, in fact, opened up an antitrust investigation into Ticketmaster and Live Nation, which is, of course, ironic because over 10 years ago, they had no serious qualms with this merger.
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--:-- Morgan Harper: What do you expect to come of this investigation? And what does the solution look like? Is it breaking up Live Nation and Ticketmaster? Is it reducing their share of this market? What is it?
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--:-- Morgan Harper: So, you know, it's a little early to say exactly what that what that would look like. But here's here's the distinction. You know, with the 2010 merger that was approved, a lot of what came about in the consent decree, which is essentially like negotiated settlement of like, OK, we're going to let this go through. But here are the terms that you have to agree to. Right. And a lot of those were what are called behavioral remedies, which really just says like, okay, you know, you need to promise to us that you're not going to retaliate against your independent venue competitors or something like that, for example, right.
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--:-- Morgan Harper: And so what we have now is the ability to actually sue and say, hey, one, you're not complying with the terms of the consent decree, potentially. Or at a very minimum, you know, this investigation is going to look into the potential for what are called structural remedies, actually looking at potentially divestitures that, you know, they need to get rid of certain lines of business.
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--:-- Morgan Harper: And it's not just the Department of Justice that's looking into this. There's legislative action in the works, too, right? I believe Amy Klobuchar really hates Ticketmaster.
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--:-- Morgan Harper: That's where I want to put the Taylor Swift fans. Yeah. Right on that. Exactly. Right on antitrust. Because that story of Ticketmaster, separate from the tech companies, that is a story of a monopoly gone wild.
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--:-- Morgan Harper: Yeah, there are a lot of people on the Hill. So actually, yeah, Senator Klobuchar, Senator Blumenthal, they sent a letter that was calling out some of the issues with Live Nation Ticketmaster.
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--:-- Morgan Harper: And they've both reiterated their concerns about the merger and the monopoly power that the company has. A lot of questions. It is not just about Taylor Swift. This has been going on. It's about prices, hidden fees that are way too high. It's about site disruptions and the kind of thing.
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--:-- Morgan Harper: And of course, you could anticipate it. But where else are you going to go to sell your tickets when there's only one game in town? And then there are a lot of state attorneys general. So that's this whole other layer of activity that's been happening over the past few days as there's been so much attention, you know, with the Taylor Swift tour that we're seeing AGs in Tennessee and North Carolina saying that they're going to be looking into this issue and they're hearing from a lot of their constituents.
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--:-- Morgan Harper: And the Swifties on the Today Explained team inform me that she's the kind of artist who really cares about her reputation. And ultimately, if she ends up helping solve this issue, it might just give her the most relevant legacy of any artist ever. I mean, hey, I'm a convert. Let's do it.
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--:-- Sean Rameswaram: Morgan Harper is the director of policy and advocacy at an anti-monopoly organization called the American Economic Liberties Project. It's part of the Breakup Ticketmaster Coalition.
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--:-- Sean Rameswaram: This Today Explained episode was produced by Amanda Llewellyn. Edited by Matt Collette. Fact-checked by Laura Bullard. Engineered by Paul Robert Mounsey. And hosted by me, Sean Rameswaram.
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--:-- Sean Rameswaram: For a more of a Beyonce guy myself But let me tell y'all something about scoring tickets to live events All you ever really have to do is show up the night of the show With a sign that says, looking for one ticket And I promise you, no matter what the show No matter what tickets are going for On StubHub the week before or the day of You will find yourself a seat Happy hunting
--:-- [Sound effects: Music continues to play]
--:-- Sean Rameswaram: In the middle of the night, in my dreams I know I'm gonna be with you, so I take my time Are you ready for it? But I was a robber, first time that he saw me Stealing hearts and running off and never saying sorry But if I'm a piece then he can join the heist and We'll move to an island And he can be my jailer Virgin to this tailor
